CMOs MUST BE PART OF COST CUTTING TALKS. Cost Cutting is today’s reality – With TVLowCost USA you cut budgets, maintain deliverables and drive results.

The article below CMOs MUST BE PART OF COST CUTTING TALKS appears in the July 28, 2008 issue of Advertising Age. The authors Tom Agan and Iain Ellwood rightly point out that “Cost cutting too often runs the risk of damaging long-term brand value and short-term revenue by failing to properly consider its impact upon them. The CMO can and should play a major role in driving revenue, making business more efficient and identifying and reducing unnecessary costs.”

This thought essentially is the business model at the core of TVLowCost. Make the process more efficient, remove UNNECESSARY costs, while maximizing the initiatives that generate revenue for your business.

Any organization that must cut budgets, and do more with less (and who is not in that position), should schedule a half hour web or in person meeting with us to learn why other agencies can not deliver this amazing value. You will also learn about our proprietary process that enables TVLowCost save our clients 70% while maintaining quality. Importantly there are no long-term commitments, or need to change your current agency arrangement.

Contact me at lurie@tvlowcostusa.com or call me at 646-839-6239 to schedule an appointment.

 

Enjoy.

 

CMOs Must Be a Part

of Cost-Cutting Talks

Marketing Executives Can and Should Play a Major Role in Identifying and Reducing Unnecessary Organizational Costs

By

Tom Agan and Iain Ellwood

Virtually every day our key clients — CMOs at major corporations — are being asked to cut their budgets by the millions. For some, it is the third round with no end in sight. And, in most cases, the CMO is simply receiving a mandate to cut costs with little to no input.

Does that have to be the case?

Given common cost-cutting approaches, there is little for the CMO to add, and, as a result, they become recipients of edicts to cut expenses after the decision has already largely been made. Today, cost cutting mostly lives in the domain of the finance people, often with the assistance of large management consultancies.

Make no mistake: These approaches can be very effective at saving money and improving an organization’s performance. At the same time, they all too often lack a critical perspective that, if considered, would lead to even better decisions.

All of these approaches emphasize a decision-making criteria based on supply-side capacity and productivity. While essential to making cost-cutting decisions, it ignores another equally critical perspective: demand-side growth, revenue and brand value. And here the CMO should be bringing a strong and clear perspective to bear and having a major voice in the companywide cost-cutting decision-making process.

Least painful cuts
The CMO’s approach should be relatively straightforward in most cases. By conducting rapid quantitative research on purchase drivers and the relationship between the specific elements of the customer experience and purchase behavior, virtually anyone can easily distinguish which areas, if cut, will have the most negative impact on revenue and the brand, and which areas can be cut with the least impact. More sophisticated analysis with the right data can reveal the exact relationship with a high degree of accuracy between each dollar cut in costs and the specific impact on immediate revenue and longer-term brand economic value.

 

 

 

 

At a leading global luxury-hotel chain, for example, we identified specific elements of the customer experience that most drove purchase today and created future brand value. By focusing on one particular element we were able to not only increase the long-term value of the brand but also substantially decrease their originally planned capital expenditures. This involved reducing 100 to 150 physical items across the customer journey. It had the additional benefit of reducing the maintenance time per room by about 10%, allowing staff to be more efficient and thereby reducing costs. All of these reductions had either no impact or a positive impact on customer satisfaction. Customers want things simpler rather than more complicated. The net result was a cost reduction in capital and operating costs of $6.7 million per year.

 

Cost cutting too often runs the risk of damaging long-term brand value and short-term revenue by failing to properly consider its impact upon them. The CMO can and should play a major role in driving revenues, making the business more efficient and identifying and reducing unnecessary costs. Using strong data and clear logic, the CMO can support this perspective in a complex, emotional and increasingly urgent decision-making process.

 

 

 

 

 

 

 

Cost-cutting approaches

Cost cutting in most companies usually falls into one of seven approaches, used singularly or in some combination.

§ Establish a benchmark among competitors or comparable organizations, then reduce expenses as appropriate if exceeding the benchmark

§ Analyze the amount of work and productivity levels, then determine the optimal staffing level

§ Improve productivity by evaluating business processes and eliminating unnecessary steps and staffing

§ Outsource processes and functions to cheaper locations such as India

§ Compare actuals to budget, then establish across-the-board cost-reduction targets on a percentage basis

§ Consider the business strategy, then cut more in businesses that are slow growth and less important to the long-term financial success

§ Percentage of sales — if sales fall then proportionately so does the marketing budget

 

 

 

 

 

 

 

 

 

Booz Allen predicts the TVLowCost model is the future

Recent finding by Booz Allen tells us  ”Low-cost business models could completely rewrite the rules of the effected industries”.  This is what TVLowCost has been finding for TV advertising, commercial production and media. More and more prospects are turning into customers as they find the value in the Low-Cost TV advertising model. And for TVLowCost it is a business model that can not be replicated by any just agency. An agency or any organization for that matter must be built from the ground up to deliver Low-Cost TV advertising.. because it is not just low price, it is quality with outstanding value and the business structure, foundation and processes need to be in place to deliver on the promise. Similar to the examples sited below by Booz Allen.

If you would like to find out how TVLowCost delivers exceptional value please call 646-839-6239 or e-mail lurie@tvlowcostusa.com and we will set up a 1/2 hour together.

Europe’s Service Sector May Be the Next to Adopt a Low-Cost Business Model
 
VP predicts that service providers with low-cost business models could assume a 40% market share in Western Europe.

A widespread shift in consumer behavior towards purchasing low-cost goods and services has heightened the competition for customers and fueled price wars. Booz Allen Hamilton predicts that service providers will follow the lead of the consumer goods industry and in doing so could grab up to 40% of the market share in Western Europe by shifting to a low-cost business model.

Industry Role Models

The consumer goods industry successfully adopted a low-cost model to accommodate this shift in consumer behavior. In the 1970s, only 20% of demand in the consumer good industry was met with bargain-priced products; that figured increased to one third by the mid 1980s. “Today, more than half of consumers, regardless of income, are searching for a bargain,” explained Friedrich. “Now it’s ‘cool’ to be price conscious.” He predicts that in the near-term 40% of all consumer goods purchases will be bargain-priced items.

The airline industry was the first service provider to pioneer the low-cost carrier model. “Providers like Ryanair and Easyjet caused a commotion in the European markets by providing limited service at a price that was attractive to the cost-conscious consumer,” said Booz Allen Vice President Dr. Roman Friedrich. “Ryanair recorded an operational margin of 25% in the past year compared to the more traditional carriers that had to settle for margins below 10%.”

The Future Success Stories

Service sector providers, including mobile network operators and Internet Service Providers, could be the next to adopt a low-cost model and such a shift could herald significant market growth. “The consumer has a wider selection and is encouraged to save through consumption,” Friedrich said. “This causes the overall market to grow.”

In addition to new customers, a low-cost strategy can bring increased complexity. “Low-cost business models could completely rewrite the rules of the effected industries,” Friedrich said. “These optimized offerings create transparency in terms of the actual costs for the individual service components. This leads to strong price pressure and to a higher degree of product differentiation.”

Smart Customization

Established players need to revisit their business models and assess. A rethinking is needed on the part of established players. “Booz Allen envisions low cost as a part of a service company’s growth strategy,” he said. “A higher complexity ensues from this. Several parallel business systems and internal processes must be established. Furthermore, it is important to pursue differentiate marketing strategies and successfully manage the resulting variety of brands. Smart Customization is the name of the game.”

study posted July 19, 2004

 

 

 

 

 

Austerity, Recession. Low-Cost model is the solution built for today’s TV advertising.

 

Every hurdle has a solution.

But this solution may not be your current advertising agency.

Nobody can be happy about the alarming news we read and hear everywhere, but let’s be positive: it is an excellent excuse to become more “creative and open minded” !

When times are difficult, business leaders identify new solutions to cope with them when the vast majority of the other brands will start slowing down.

TVLowCost constitutes one of the best answers to defend your brand in austerity times. TVLowCost was built from the ground up to give you MORE FOR LESS…

Before you consider reducing your advertising exposure, why not hear a little about our approach of TV advertising? It takes less than an hour. .

In the last 3 years and a half years more than 110 advertisers have joined TVLowCost offices around the world and have benefited from our unique cost-saving method, more than 450 TV commercials have been shot. It is not luck, it is the tremendous value that is unavailable anywhere else.

We, at TVLowCost, believe that the costs of TV advertising can be drastically diminished in order to help brands defend their market shares with reduced budgets. We believe in this and we prove that it works !

Ask yourself why brands such as HEINZ, UNILEVER, WRANGLER, BOSE, GOODYEAR, MILTON, RICOH and many others… have chosen us, they understood something special about us. And you can to.

To find out more call Jim Lurie 646-839-6239 or e-mail lurie@tvlowcostusa.com

What is TVLowCost USA – in 15 seconds

For clients who don’t think they can afford to advertise their brands on TV… well now they can. Just like High-Cost agencies, we concept, and produce customized and high-quality TV spots and media plans. TVLowCost USA has created a process that takes unnecessary costs and time out of the development, execution and even the media buying. This process and innovation allows us to pass the savings on to our customers. On top of it all, we use the same talent pool available to bigger brands.

Many large brands from around the world that want great quality but also want to get more from their budgets have partnered with TVLowCost. If you are interested in getting MORE with LESS, contact Jim Lurie at 646-839-6239 or lurie@tvlowcostusa.com

To see samples of our TV spots, click here. We think you’ll be surprises how far your budget can go with the TVLowCost USA model.

Advertising during a Recession : “When times are good, you should advertise. When times are bad, you must advertise.” Why recession should motivate you to choose TVLowCost, the affordable TV advertising agency?

“When times are good, you should advertise. When times are bad, you must advertise.”

Here we are, recession seems to be very probable in front of us in the vast majority of countries. And for all practicle purposes we are in a recession in the U.S. Just ask any of our clients. All the reasons seem to be joined to create a slow down in many markets. Many companies will start reducing their marketing expenditures in order to save money and try to keep a normal level of profitability. Every soud manager knows it is not a good decision to stop advertising, but “what else can I do ?” … It is not so easy to maintain the same level of advertising investment when you know that your billing will probably be reduced in the months to come.

In a famous study of U.S. recessions, McGraw-Hill Research analyzed 600 companies from 1980-1985. The results showed that Firms that Maintained or Increased their Advertising Expenditures during the 1981-1982 recession Averaged Significantly Higher Sales growth, both during the recession and for the following three years, than those that eliminated or decreased advertising. By 1985, sales of companies that were Aggressive Recession Advertisers had Risen 256% over those that didn’t keep up their advertising. In addition, a series of six studies conducted by the research firm of Meldrum & Fewsmith (below) showed conclusively that Advertising Aggressively during Recessions not only Increases Sales but Increases Profits.

 

(source: Meldrum & Fewsmith)

Plenty of evidence demonstrate this, but, I still hear many advertisers saying : “OK, I agree on this, but I cannot afford the costs of advertising on TV in this moment ?”

Well, then it’s time for you to change your habits and quit the world of “HIGH COST” TV advertising, and discovering that with TVLowCost USA, TV advertising is not only affordable, but also very efficient, for budgets several times inferior to what you used to pay! With the power of TV advertising to boost your business.

Recession should be the opportunity to adopt a “Low Cost Attitude” in TV advertising.

For more information on how TVLowCost USA can produce and deliver a more affordable and economical TV campaign, call Jim Lurie @ 646-839-6239 or email him at lurie@tvlowcostusa.com

 

« The success of TVLowCost internationally is due to the fact that we make TV advertising affordable in every country where we are.

TVLowCost and suspending beliefs

As TVLowCost is a new concept in the U.S. or even more specific a new business model, many if not most people we speak with quickly understand Low-Cost, and why not its in the name. But as virtually all people in marketing have grown up in the traditional client/agency world there is a struggle to figure out how the model can be changed so much while QUALITY is maintained. Its a funny dynamic, but to understand the process, systems and platforms that enables TVLowCost USA to change the traditional VALUE equation one must suspend their beleifs and understanding of tradition as it relates to the television production and media placement. It is not magic, but it is not traditional and it impacts margins and the big egos of the traditional high-cost agency world. It does take about 20 minutes to see the whole picture… the quality of the work is the big ah hah.

I am writing this because it seems that others in North America (and around the globe) are finding the same dynamic. But it does work -and there is NO committment to find out how and why and it only takes about 20 minutes. Below is blog from our Canadian friends, so as you read through it suspend your beliefs for a little while and if you would like to find out more call Jim Lurie at 917-543-2896 or email him at lurie@tvlowcostusa.com or to see samples of the quality product delivered by TVLowCost just click.

 

Since our opening on January 15th, I have received many mails and within these mails have been many questions. But it almost seems that, for one reason or another, many of these questions were worded as if the person asking did not really feel comfortable about asking in the first place.

Let me assure you that the age old saying that “there is no such thing as a stupid question” holds true for the advertising business as well. Given that many marketers are in direct contact with their agencies on a regular basis, it may seem that all the answers are either already accounted for or that the account execs or directors have them memorized. So what then when someone like TVLowCost comes along with a business proposition that seems out of line with all the packaged replies of the agency?

The first thing seems to be a kind of thought transmission along the lines “well, this can’t really be for real, otherwise somebody would already have done it” or “this is bull – no way they can deliver” or “like I need another agency, they all talk a good game, but when it comes down to it…”. And this is followed by a kind of introspection that asks the question, “but what if there is something to this?”

This is when the email gets sent or a phone call gets made and TVLowCost is asked to explain and verify its business model. As these conversation get into a little more detail and the comfort levels rise, it becomes clear that we are not out to criticize, but to offer an alternative to the current way of communicating a message through the medium of television.

When we are asked as to the cost, the package cost that includes a full day of shooting, where more often than not we are able to shoot two, three or four commercials for the same price as one commercial in the classical sense, clients initially think we are offering slam-bam video productions done in a garage. When we show them our reel, lead them through the process and explain why the costs are so low and the results so good, they begin to realize that the question was far from stupid, but that the answer could not have been known as they had never dealt with us before. Their existing agency could not have had an answer pre-packaged as they work much differently from TVLowCost.

The next question often then pertains to the timing: on air in eight weeks max, three weeks min. We have the system and the resources in place to make this happen – we make it happen because we will not make our clients sign an agency contract – we get repeat business because we earn it.

“How do I know you guys are for real?” seems to follow on the cost and timing heels. Again, we did not produce 300 commercials in two years by being wing-nuts (no disrespect to what was a very useful fastening device at one time). We have won over 60 clients in these years and we welcome the comparison to any agency in the world.

So please keep asking questions, you have nothing to lose – you may even get answers that shed light on some of the things you’re doing at this very moment.

For more information on how TVLowCost USA can produce and deliver a more affordable and economical TV campaign, call Jim Lurie @ 646-839-6239 or email him at lurie@tvlowcostusa.com

TVLowCost and Blue Ocean Strategy

Many of you may have read Blue Ocean Strategy – How to Create Uncontested Market Space and Make the Competition Irrelevant by W. Chan Kim and Renee Mauborgne, if you haven’t and you are in a position of leadership in your organization, I recommend you do. It is a pretty quick read.

What I found interesting was that the TVLowCost business model basically followed to “road map” of Blue Ocean Strategy without planning it that way. Here’s why:

1.       It was first determined that TV advertising should not be one of the few businesses out there without a quality low cost model. It was then up to us to figure out how to build a low cost method without sacrificing quality.

2.       For example, EBay, Southwest Airlines, Amazon.com, and Costco developed business models that deploy disruptive innovations that part with traditional models and create new markets. These companies developed new models that do not diminish quality, but delivers the BEST VALUE FOR THE MONEY.

3.       In advertising, there was no disruptive offering, or innovative model that offered a new set of price and performance economics without sacrificing quality. This is what TVLowCost USA is about.

 

With this vision and with principals that have over 100 years of “Madison Avenue” experience, we know that traditional high-cost agencies will not/can not look to part with traditional models that will compete with existing revenue or profit margin. We also know that breaking from the status quo only has negative implications for established “high-cost” agencies. And “Madison Avenue” will not align the whole system of a company’s activities in pursuit of differentiation AND low cost. Their shareholders would never allow this.

The insight was a new model needed to be built from the ground up. And identifying this gap in the TV advertising field was central to seeking to develop a new model to fill this need. To begin with we knew we needed to address the input of many disgruntled agency customers.

 

The main desired improvements were:

o         cost of ownership

o         speed to market

o         the overall time-to-value benefit

o         predictability

o         Without sacrificing quality

 

In other words, ad industry leaders want VALUE INNOVATION. Value innovation is created when a company’s actions favorably affect both its cost structure and its value proposition to buyers.  In this case, Value Innovation enables those who utilize TV to do so more efficiently and effectively and those who have not been able to afford TV to include TV as part of their marketing mix.

o         Cost savings are made by eliminating and reducing the factors an industry competes on.

o         Buyer value is lifted by raising and creating elements the industry has never offered.

 

To get to a new value curve we then dissected the current industry cost structure, offering and process to determine:

 

1.       What the industry takes for granted, but should be eliminated

o         Agency abuse

a.       A process that financially rewards an agency by incurring “unnecessary” time

b.       The circular development cycle of Juniors creating and executing work for Seniors to comment on

c.        Unwarranted exotic shoots

d.       “Overkill” directors and crews

e.       Beautiful creative that does not sell the product

f.        Excessive and long-term retainer agreements

o         Budget uncertainty

o         Pitching/RFPs – this just adds cost

 

2.       Which factors should be reduced below current levels

o         The cost by a factor that will make it possible for Challenger Brands to leverage TV in a meaningful manner The risk of TV as part of an overall marketing channel

o         TV development time cycle from 20 or more weeks to 8 weeks

o         The time and effort that clients’ need to spend with their agency on TV

o         The number of meetings – 7 meetings with focused agendas

o         The vast array of people from the Agency that work on a typical TV spot – time and excess only add to the bottom line:

o         Two partners from start to finish

o         The size and focus of the client team – Key decision makers only

o         Agency overhead

 

3.       Which factors should be raised above industry standards

o         The time/cost to value relationship

o         The number of creative ideas – from 2-3 to 10 quality concepts

o         The input that consumers have on development

o         The media value by:

o         “pre-negotiating” with cable networks and continually uncovering better values

o         Expanding TGRPs by purchasing only short form media (:10 and :15) in order to drive repetition of your message

o         The focus of the work to sell products vs. winning awards

 

4.       What factors should be created

o         The security and comfort of a predicable investment coupled with high-quality

o         $500,000 guaranteed, all inclusive PACK:

a.       Management & Creative Development

b.       TV Shoot

c.        NATIONAL MEDIA BUY

d.       A MINIMUM of 150 National TRGPs

e.       A MINIMUM of 2,000 airings

f.        Focus group creative input

g.       On-air 8 wks from Brief

 

The TVLowCost USA model is possible, but it required a new look at everything. If you would like to find out how it’s done and how it has been done successfully 100s of times, call Jim Lurie at 646-839-6239 or email lurie@tvlowcostusacom

 

The economic squeeze. TVLowCost frees your Brand to do More with Less.

“Low-cost” TV from TVLowCost makes TV AFFORDABLE to Challenger Brands. Why spend FORTUNES on non-TV Media when your Brand can enjoy the full benefits of TV for LESS THAN YOU CAN IMAGINE ? AND the Trade will love you …!

FMCG Brands and their Owners are on a continuous cycle of Trade Support that’s increasingly dominating Brand Budgets. And putting the squeeze on advertising and promotional spend.  Invariably it’s advertising that gets pulled because of its high cost in order to maintain profitability of the brand.

Winning the game … it’s cat and mouse with the powerful Grocery groups. Play the game … or risk not having a market for your products. Don’t support your Brand and risk poorer Distribution, adverse shelf positions or even worse, de-listing. And let’s be honest, the Trade ONLY gets excited about TV advertising, right? Mags/Print plus some posters around their Stores, oh and some online will fire up any Multiple Buyer don’t get anyone excited! This harsh reality becomes even more vital for smaller Challenger Brands struggling on tight budgets.

If this sounds familiar… and you want to break out - CHANGE GEAR – and have your Brand supported on TV, then TVLowCost is the solution. We have made TV affordable. At last. And pioneered the Best Value all-in TV Package in every market where we are established.

TVLowCost has created complete the all in one package … you will be on-air 8 weeks from the approved Brief, with an average 4 commercials pre-Tested; full TV Shoot of course with all post-editing and running costs; AND a fully tailored Peak/Off-Peak National TV Schedule geared precisely to your Brand’s Target Audience. And punching hugely above its weight.

RESULTS! RESULTS! … we are getting our Clients remarkable Results in each of our markets around the globe. Here are some exmpales from UK : Milton earned +30% Sales across their range with +32% extra Distribution on top. Sudocrem +21% plus + the same for Distribution. Milton has rebooked follow-up TV bursts for both the UK and now abroad … as separately has Sudocrem, now on its 3rd burst in 15 months! Both Brands on higher spends after proving campaign efficacies,  both having been off TV for a decade or more. We are talking serious net business gains here, and $$ payback. Plus exceptional Distribution gains.

Next step?… contact us to see how TVLowCost USA can help you in the US and see our robust, Results-orientated presentation. And be prepared to be convinced – this is all possible, as 85 Projects and over 420 commercials from our Network have shown. Your own Brand will not look over its shoulder again. So don’t finalise your 08/09 Brand Plans without considering TVLowCost. Hope to hear from you. Thanks and regards.

Email: lurie@tvlowcostusa.com or mobile: 917-543-2896

TVLowCOST – LOW COST/QUALITY/PREDICTABLE

In an economic downturn, TVLowCost’s unique all-in $500k TV Package is PURR-fectly timed! Advertisers need not panic! Our approach gives them back their “Marketing Purchasing Power”.

Advertisers, don’t panic ! While facing a potential recession, so times are tough and Clients are reappraising their spending. For TV advertising , traditional “High-cost” ad agency approaches may well have to be axed … BUT TVLowCost USA cleverer ”Low-cost” approach in an economic squeeze is just coming into its own. Perfect timing in fact, helping Co’s to rebalance their ”Marketing Purchase Power”.

When TVLowCost USA opened its doors three and a half years ago, the Ad Industry roared with laughter [and a touch of anxiety] and declared: ”This will never work!” Various traditional big agency bossess claimed that the cost of the ” All inclusive TV Pack” was simply ridiculous,  impossible even … 

True … the Ad Industry  is always strangely traditionalist and conformist! 

But our intuition was right: numerous Co’s did not use TV advertising, simply because of the “high ticket entry price”. Inaccessible for most. Today, inflationary pressures on supply costs, the Trade’s squeeze on Distribution Support progs, newer competitive entries, locally or from abroad … all these and more force Co’s to re-think their marcoms budgets. With cut-backs in mind …

The name of the game today is those cut-backs or more politely put: “Savings with QUALITY.”

TODAY … is precisely the right time to work with the only TV agency specialist in those ”Savings and QUALITY” : TVLowCost!

What’s equally clear is that traditional “High-cost” ad agencies are really poor in adapting to the new economic environment. Culturally and financially – hampered by their heavy overheads and “High-cost” living –  they simply can’t shift their positioning. Happily and without these dated excesses, TVLowCosthas already pioneered the changes, having pre-empted the economic pressures.

By REDUCING THE COSTS of TV advertising, we allow our Clients to improve their overall profitability whilst enjoying the fuller benefits of proven, cost-effective TV advertising. Perfect timing for the times. Indeed!

IN THE U.S. CALL US AT 646-839-6239 AND ASK FOR JIM LURIE OR E-MAIL LURIE@TVLOWCOSTUSA.COM