Woolley Marketing: a gift with purchase or pay for it yourself?

In his regular column for Mumbrella, Trinity P3 founder and global CEO Darren Woolley questions the real cost of a free gift.

Who doesn’t like to get something for free? A gift with purchase? A little extra to sweeten the deal? It can’t hurt, can it? It is being offered in good faith, as a sign of a desire to work together and bring value to the relationship. It can be particularly effective during the pitch or tender process. Offering a client, who is tight on budget (and who isn’t), a value offering for free is a great deal closer. In recent time these sweeteners, or gift with purchase, have increasingly taken the form of technology solutions. Particularly in media.

While procurement will quickly try to evaluate the monetary value of these offerings, to add to the tender financial evaluation, few on the pitch team seem to be wondering what the real cost of these gifts is. And whether you would be better off paying for this directly rather than accepting it as a freebie.

Don’t get me wrong, I love nothing better than getting a little extra for free. The amuse-bouche at the restaurant or the baker’s dozens of bagels (that is 13 for those more cynical). I see that as enhancing my customer experience and encouraging my return custom. But in both cases I will consume them, hopefully enjoy the experience, and suffer no further consequences for my indulgence.

Unfortunately, doing the same with an agency you are about to appoint may look as innocent and risk free, but the fact is it can have consequences that may take months or years to become obvious.

But it is human nature to want something for nothing. This is why our culture if full of anecdotes warning us of the dangers of those bearing gifts, from the Trojan Horse at the gates of Troy to the fairy tales of Hansel and Gretel and the house made of confectionery. Just because it is free, does not mean you don’t have to pay, eventually.

Copyright Dennis Flad – reprinted with permission

A few years back, agencies of all types where offering access to DAMs (Digital Asset Management) platforms for free or very low cost. These were great, until the client was asked to pay to get their digital assets back and where they did, they were in formats and cataloging structures that rendered them virtually useless.

Around this time, media agencies were offering clients data dashboards, with promises they would have everything in one place within a month or two of appointment and all totally free. The on appointment the dashboard did not always appear. Or if it did, not in a format that was valuable.

So, oh well. Small hiccups, but not one to get bent out of shape over, considering how much money it saved?

But in today’s data driven world, many media agencies are offering CDPs, MMM, and a full range of other three letter acronym technology solutions. Many of these can cost hundreds of thousands of dollars a year, with most powered by the clients first party data. Just hand over your customer data and the agency will mix it with the second and third-party data to provide you with an improved return on media investment.

Which they can. Right up to the time you ever need to change agencies. Because it is often only then that you discover that the data, while yours, is now in a proprietary format, that is only useful in the agency’s platform. Or worse still, you discover that your data (anonymized) has been added to pools of data that has been sold off as third-party data to another party.

I understand the dilemma. Technology these days is largely cloud-based, and the cost is OpEx, meaning the cost of these solutions eats into the operating budget for marketing. But then, if the cost is worth it, the business case should stand up with significant ROI. By outsourcing this cost to agencies, you often lose the impenitence to measure the value or the ability to manage the cost. Neither the right outcome in a pitch process.

So, perhaps before you accept that gift from the agency, ask yourself, what will you really be paying and is the cost to high for the short term gain?

Darren Woolley, Trinity P3 founder and global CEO


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