Is your money being sucked into the black hole of false starts and endless meetings? Here's how to make efficient use of your interactive marketing budget.

When your interactive agency develops a banner ad, an email blast, a website or any other online products, we can split the total cost of the project into "value added" and "non-value added" costs. The value added costs are the "good" costs, while the non-value added are the "bad" costs. However, both combined are what consumes your interactive marketing budget. The non-value added "bad" costs are wasteful costs that you can significantly reduce.

The wasteful costs, unfortunately, hide in useful work. One place it hides is in how you communicate your requirements to an agency. If your requirements are clear and complete, and everyone is on the same page before the work starts, you avoid wasteful costs. If they occur at all, they are normally small. Alternatively, if you give an agency your requirements in bits of incomplete information, and ask it to proceed while you collate the balance, then you have just planted the seed of wasteful costs.

Incomplete or unclear requirements lead to false starts, going back and forth clarifying what is required, rework, frustrations and significant amounts of time spent spinning your wheels and not moving a project forward. The only thing moving forward is the billing meter that is racking up costs that could have been avoided.

One may ask: Why would an agency start work without all the requirements it needs -- particularly if it knows that doing so would generate wasteful work that could blow the budget? Some account leaders have tactfully stalled or refused to start work pending complete and clear requirements. Some clients resent such pushbacks believing it is disrespectful. Because they are paying the bills, they expect the agency to start the work despite incomplete requirements. However, if the agency starts prematurely -- and thus incurs the inevitable wasteful costs caused by false starts and rounds of revisions -- it is blamed if the budget is blown.
 
Our business process improvement work has shown that as much as 25 to 40 percent of avoidable revisions in an agency's creative work are caused by lack of upfront clarity on requirements. Clients could significantly reduce this wasteful cost by giving their agencies complete and clear requirements upfront.

Another insidious budget waster -- this time on the agency side -- has to do with how work is done. Senior leaders at interactive agencies spend significant amounts of time in meetings during which they brainstorm and develop the strategies, concepts and creative solutions to meet clients' requirements. If an agency has poor meeting habits, significant wasteful costs are charged to its client's account. Poor meeting hygiene exists when meetings frequently start late, key players are absent and people come unprepared to discuss and present ideas. In some cases, a few people will dominate the meeting, do all the talking and dampen cross-fertilization of ideas. When a meeting has poor hygiene, in most cases, the meeting ends without achieving its objective, and there are no clear outcomes or next steps.

Our agency meeting effectiveness and improvement work shows that 30 to 60 percent of agency time is spent in meetings, on average. This number is much higher for high-level senior executives, who could spend 75-90 percent of their time in meetings.

Either way, the cost of poor meeting hygiene is significant. All the people at such meetings are charging time to your interactive budget. It is critical for agencies to ensure that their meetings are effective and productive so that more is accomplished in less time. Everyone invited should have a reason to be there and contribute to solving the interactive problem.

If you have a fixed-cost project, the cost of meeting inefficiency is on the agency. It will squeeze its margins. However, in a retainer, AOR or hourly based pay situation, the cost of all that wasted time is on the client. With agencies charging $110 to $250 per hour, the bite on the client's budget is painful.

To make your interactive budget go further, you need to bring a questioning eye to the amount of value-added versus non-value added work going on at your agency. The two sources of non-value added work I gave are common in the agency world. They are as insidious as a heart attack. They are silent budget killers that strike without any warning if you are not keeping a watchful eye on the work being done on your behalf.

Here are key strategies for reducing non-value added work and related costs:

Be clear about who is on the bus
To develop an interactive campaign requires a team. We all know that, of course. Frequently, though, what is not clear and well known are the roles, responsibilities and authorities of each member of the team. For cost-effective execution of agency interactive work, you must be clear about who is on the bus and their roles on the project.

On the client side, this clarity means knowing who is responsible for working with the agency on a day-to-day basis, who is authorized to approve the work, who must be consulted and who must be informed. By being clear in these areas, you avoid having people insert themselves in the project with assumed roles, thus slowing down your project and generating unnecessary rework and costs.

On the agency side, this clarity means enforcing clearly defined roles that ensure smooth work among the account, creative, media and production people. When done properly, this oversight ensures that there is less finger pointing and that team members have joint ownership of results -- good or bad.

No egg will hatch before its time
No work should start before it can be done properly. It should start only when the requirements are clear and complete. That way, you avoid the wasteful costs of false starts and redundant work that will inevitably be required after the client puts more thought into what it wants -- thus requiring the agency to change direction.

Encourage and embrace "No!"
A client should become comfortable with hearing "No!" from its agency. I do not mean any ordinary "no." I mean the "No!" that builds a great relationship -- the "No!" you hear from someone who truly cares about you, a trusted advisor, who will tell you what you need to hear, not what you want to hear.

A bold and reasonable "No!" could break the cycle of unnecessary rounds of revisions. It can minimize avoidable rush jobs, sloppiness, errors and rework, while reducing the frustrations caused by such demands. By reducing wasteful work, you can focus your time and budget on developing high-quality interactive programs. You stop and reduce the merry-go-round tendencies in agency work.

Measure what you value and value what you measure
Whether on the brand or agency side, it's time to ask yourself a lot of questions. Do you know if the last interactive requirement given to the agency was complete and clear? What percent of the requirements you got this year were complete and clear, the first time?

What percent of your agency meetings is an effective use of interactive employees' time? How many meetings have to be reconvened because the earlier ones did not complete their objectives?

How many rounds of revisions does your interactive work go through before it is completed and approved by the client? How much time is wasted on unnecessary revisions?

The answers to these questions tell you how cost effectively your interactive work is being processed. If you are seeing a lot of unnecessary revisions or receiving feedback that most meetings are not an effective use of employees' time, you need to find the root causes of those wasted costs and remove them.
 
In summary, you can reduce wasteful costs when developing banners ads, email blasts and websites by being clear and complete on requirements upfront. In addition, by streamlining meetings so they accomplish their objectives in minimal time, the cost of developing your interactive campaigns can be reduced, enabling you to do more with less.
 
Ben Nneji is president of SigmaWorks Group, part of Omnicom Group Inc.