Agencies need to work smarter, Kimberly-Clark marketing chief warns
We are moving into an era of “lean marketing” where the advertising process will need to be reinvented in order to be “faster, better, cheaper”, the global marketing head of FMCG giant Kimberly-Clark has warned.
Australian-born Tony Palmer said agencies needed to worker “smarter” in order to achieve millions of dollars in cost savings which then could be shared.
Palmer, in Australia to speak at the Australian Marketing Institute’s conference this week as well as picking up its Sir Charles McGrath Award for marketing achievement told B&T Today: “I think there is a lot of work to be done on the production system.
“You see naturally a diffusion of your marketing sell, it gets broken up into smaller spends in multiple channels which puts more and more pressure on your production budget. You end up with more non working, so it stands to reason we have to do something about that and what we have got to do is really simple in my mind. We have to find a way to reinvent the production process which is faster, better, cheaper. You can’t give up one of them. It has got to be faster, it has to be better and you can’t spend more for it.”
Kimberly-Clark’s brands include Huggies, Kleenex and Kotex. It spends around $500 million a year on advertising globally and its Australian creative agencies include JWT, The Brand Shop and Ogilvy, while Mindshare handles media planning and buying.
He continued: “It’s not something to be taken lightly, we have to work out how to do it properly, it needs to be done in a way that preserves the agency. There is, I believe, a big opportunity for agencies to be smarter, get a percentage of the cost savings and actually turn something into a revenue stream that is not currently a revenue stream by working smarter.”
His comments follow a decision earlier this year by Procter & Gamble to pre-select the production houses it uses, rather than leaving it to agencies to decide. The move in the US which will reportedly see the number of production houses slashed from 125 to 30, is being implemented in order to save costs.
On the era of lean marketing, Palmer, who has held senior marketing positions at Mars, Kellogg and Coca-Cola said: “Lean is about starting at the source of what you are trying to do, so in marketing speak that is putting the consumer at the centre and delivering on their needs and then taking waste out of the system. Waste in terms of time, waste in terms of production spoilage. If it currently takes us 16 weeks to shoot an ad, how do I take all the non value added time out of the process and collapse it down and at the same time take costs out and make it faster better cheaper? How do you work with someone like WPP in a small market where you can’t afford multiple client account structure? How do you make that leaner? It’s not something you do tomorrow, but if marketers aren’t thinking about that the end of the road is going to be huge non working costs and minimal money going against your brand. That’s the ends game.”
Palmer said the industry had much to benefit from increased cost savings.
“Why does the industry have to see this as a lose lose proposition when there are hundreds of millions of dollars of efficiency to be had that can be shared? I do think greed might be at the centre of it. As a client I want to share it with my agencies so we all prosper and therefore the best people want to work for us. That has to be the game.”
