'The marketplace isn’t fit for purpose’: adm Group on wastage in marketing execution
This article was originally published in The Drum.
From leakage and inefficiency to spiraling costs, some say the marketing execution space is woefully wasteful. Among those critics is adm Group, which says it has finally made the investments to set things right.
In an era of permacrisis, one of the most conspicuous and dogged issues facing the world is the cluster of problems we euphemistically call the ‘supply chain crisis’: rising costs of materials, goods and services; labor shortages; difficulties in moving stuff around the world; and a raft of downstream knock-on effects.
Marketing execution is perhaps not the industry’s sexiest corner, but against this background of supply chain chaos, it might just be one of its most interesting. Execution shops are the places where marketers’ work is brought to life: recrafting above-the-line creative for real-world distribution channels like point-of-sale; manufacturing materials; shipping them; warehousing them; installing them; maintaining them.
London-headquartered adm Group is one such execution partner. With a raft of recent acquisitions and a rebrand last month, it’s become a major global player while, its leaders say, it’s reshaping itself to tackle that complex global supply chain head-on.
Waste not
Taking the complexity of the supply chain seriously is a shift the marketing execution market is crying out for, says adm's chief strategy officer Dan Pike. “The current marketplace in terms of executions and the models they deploy aren’t necessarily fit for purpose.”
The problem is one of inertia, says adm chief executive Ed Colflesh: “The marketing execution space hasn’t changed in the last 15 years – the way those models are set up, they’re almost incentivized for people to spend more through a particular provider; they’re driven on classic markup models – understanding how those assets are playing in-market and using that data to drive decision-making isn’t a core concept.”
Execution needs a revival, says Pike. “A lot of companies have decentralized; they’re looking for agility; they’re driving sustainability. Those environments require a different way of thinking. The market at the moment is very focused on cost savings… but you can only squeeze a lemon so far in continuously driving cost out. It isn’t now about simply buying better; it’s about buying differently.”
Buying differently means buying less wastefully – which means saving money and increasing sustainability. Waste comes in at almost every level of the execution process, says Pike, from poorly made work that has little impact on consumers to materials that never reach (or reach and never leave) the warehouse thanks to a “huge level of termination.” That all hides behind a vale of opacity that prevents clarity on what’s being spent on what and where. That lack of transparency is counter-productive in several ways – in Colflesh’s words: “I don’t think [marketers] know how much stock is actually being purchased… there’s a ton of leakage through localized vendors; there’s a lack of clarity both in terms of the aggregate amount of spend and where it’s being spent.
“The metrics of the marketplace today, they’re horrifying. In brand execution, less than 50% of spend is visible at a P&L level. It’s worrying where that’s going. And look at execution rates – they’re also worrying. If 50% of your marketing spend never gets executed, it’s incredibly wasteful… We need to track the activity through the supply chain; we need to ensure that we’re understanding what we’re distributing and where we’re distributing it; we need to ensure that we eliminate the waste and then reinvest into channels that are effective and drive better return on investment.”
(That 50% stat is based on the agency’s own research; Pike goes on to say that it has found that 30% of point-of-sale work is never executed and that for the other 70% “the effectiveness level is also low.”)
Making execution safe for the world
adm Group originated as an arm of promotional product supplier Polyconcept back in 1992; now-chairman Justin Barton led a management buyout of the business in 2015.
In the years since 2015, the agency has bolstered steady organic growth with a slate of varied acquisitions: first US- and Russia-based packaging shop Supremia (the group has since closed down its operations in Russia), then promotional products company XLConcept. Last year, it added Connecticut consumer engagement agency Lapine and Miami-based consultancy Effectus to the roster. The most recent acquisition: shopper marketing boutique DASS (Digital and Shopper Solutions), which brings with it martech platform Flow.
All told, that adds up to 800 in-house staff (plus another 400 dedicated from a client in India) worldwide, with a headquarters in London and major footprints from Romania to Mexico.
That global spread is no accident. Difficulties from chaos in the global supply chain have been much in the zeitgeist over the last few years; for adm Group, managing that complexity is the task of a marketing execution house, and it requires boots on the ground.
“Things do not remain stable in the world,” says Pike, “and things are going to continuously change. As an organization, we need to adapt to be able to cater to that… to enable perfect activation, cohesion across the supply chain is critical. Having agency partners across different touchpoints; working with suppliers, warehousing partners and logistic partners; going all the way through to final execution: that connectivity is critical.”
That global network is a necessary but not a sufficient condition for success – which also requires good tech. The agency says it’s spending over $10m to develop its technology suite, Hive, but the pair insist that the key is to be “channel agnostic” and not always assume that a digital solution is a better one. This feeds into an overall “end-to-end” supply chain management platform, designed to escape all that wastage and mystery we explored above.
Success in this new paradigm also requires the ability to play nice with others, says Pike. “Engaging with partners with expertise in different locations, for us, is fundamental to driving consistent, optimized activations in any channel.”
For some, Pike insists, all of this will mean reimagining the role of marketing execution and the breadth of the view it needs to take. “The majority of the world that we’ve come in from in marketing execution sees the end of the journey at a warehouse… We see it differently. In order to be able to drive effective activations, we’ve got to be able to track that item and the compliance of that item in front of the consumer. Did it get in front of the consumer? And when it did, what did the consumer feel about that activation? The big question of ‘Should I spend more; should I spend less?’ isn’t the right question. The question should be: ‘Am I spending right?’”