Major cashflow problem sees AMI ask members for $99 ‘service enhancement charge’
The Australian Marketing Institute (AMI) is set to ask its members to pay a new $99 “service enhancement charge” in the face of a “cashflow issue” as it struggles with a financial deficit thought to run into hundreds of thousands of dollars, Mumbrella understands.
Australia’s main industry body catering to individual marketers has faced successive financial shortfalls, with major changes to its membership and financial systems leaving the association with a significant debt.
The new chair of the AMI Darren Woolley confirmed it will be writing to members in the coming weeks, and said the shortfall had come as the body had added “a lot of additional things added to the mix” which had added some “unforseen” costs.
“We introduced things like free professional indemnity, we’ve done projects with Deloitte about getting marketers on board and it’s that. Plus the changes that have occurred in the last 12 months with the new CEO, board restructure and a need to upgrade our financial and member data is another cost we have incurred,” said Woolley.
“So of these costs, some of them, were unforeseen and we have now found ourselves in a situation where there is a cashflow issue,” he added.
Woolley declined to comment on the size of the deficit, but said: “Being an association we don’t have access to all the financial options such as loans that we would be able to get if we were a business.”
He also said the AMI was committed to improving the financial performance of the association and members would see the benefits in improved services.
“Our only asset is our membership so this has meant we needed to go to the members for a one-off contribution that will allow us to continue to offer and improve and enhance those services over the next 12 months,” said Woolley.
“The things we want to do is the upgrade to our membership and financial systems and we have to do that for security. We have to revisit and relook at all our professional development courses and we have also been going through a heavy cost cutting exercise and we have cut all the costs out of the association without impacting the services to members.”
The move comes just a week after CEO Lee Tonitto acknowledged the financial challenges that come in sustaining membership driven organisations during, but said membership was growing.
“It’s not inexpensive to run an industry association,” Tonitto told a Mumbrella hangout, “you always need to make sure that you are evolving the business model and keep lean.”
Asked if times were tough financially at the moment Tonitto, who took over from Mark Crowe in August, responded by saying: “I look at the membership as a great barometer and we have had above average membership applications over the Christmas break.
“We’ve seen growth in our professional members and I also look at a barometer at the number of associations I speak to who want to partner with us. I think the future is very bright for the AMI.”
The AMI has a membership of more then 7,000, with around half of those marketers and the others students.
It is understood only professional and corporate members would face to the one-off surcharge. These members pay an annual membership fee of $380.
Nic Christensen
The hangout with Lee Tonitto:
australian ad industry in that much trouble? can’t even afford the lobbyist’ bill.
good.
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A bunch of marketers not keeping to a budget, who’d have thought.
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The Australian Marketing Institute has to use a firm of accountants “to get marketers on board”?
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Stated KPI to grow membership by end of 2015. Good luck doing that with these sorts of “initiatives”! I am a member and won’t be renewing. Makes no sense if there are supposedly “above average member applications”???
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Psychology has taught us that individuals go through five stages of grief – denial, anger, bargaining, depression and acceptance.
Whilst Mister Woolley would neither confirm nor deny the scale of the debt a simple calculation based on 7000 AMI members with 50% students means that you are aiming at around $346,500 to pick up the slack. That is coming from 3,500 or so professional and corporate members shelling out $99 each. That’s a serious chunk of change in anyone’s books. In accountant-speak that it is a very long, long way down the proverbial gurgler.
To enable a debt of such magnitude to grow there must have been some serious denial going down around the AMI board table. This would have been followed by some real anger. Remember, there is nothing on this earth that is more able to deny anything than a marketer. And there is nothing more frightening than an angry marketer. Imagine the sound. Think about the hysteria. My God, spare a thought for the children. Oh, the humanity!
So reading between the puffery expressed here AMI have obviously now stepped up the pace and have entered the bargaining phase. So being good marketers they call in the big Woolley who waxes about this “one-off contribution that will allow us to continue to offer and improve and enhance those services over the next 12 months.” Excuse me? Remember, that’s $300+K on top of the $1.5 million or so (based on the same member figures x $380 per year each) that comes via “normal” membership. That will buy you a lot of Deloitte time, some serious professional indemnity and more “membership and financial systems” than you could poke with a stick.
I can see the next phase, the depression bit, as clear as day. I see it kicking in real quick as members say, “Hang on a sec. AMI, you’ve been bailed out once before as I recall. Remember? How come this is happening again? What’s wrong here? Why should I be forced to make up the slack for your operational shortcomings?”
I think then that acceptance might start to sink in. Acceptance that perhaps you’re not so good at running a member organization in the first place. And, an acceptance that in the modern era, peak bodies such as AMI must be absolutely on top of their game in very respect, which it is now plainly obvious, that they are not.
Will a cash injection help? It might. Think of all those new shiny “systems”. Or, maybe is it just buying time? Who said that stuff about the end of the age of entitlement? Whatever.
The lesson to be learned here is that running any business is really hard. Imagine passing the hat around to your customers when the going gets tough. It would be just as laughable as this affront is to the intelligence and the patience of AMI members.
This is as outrageous as it is insulting. Accept that and maybe we can all move on.
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So sorry to hear that AMI is not doing so well. It was such a promising product, after all who wouldn’t want to ‘last longer.’ I truly thought that those oral strips would sell well.
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@Michael
Glad I’m not the only one that jumped to that conclusion based on the headline!
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Be nice to know what you’re getting for the $100 – isn’t that marketing 101, try and give the consumer an understanding of the ‘value’ of the product.
Won’t see many Effies for this BTL campaign me thinks
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Getting Alan Rickman to front the AMI campaign was a good idea though… 🙂
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Hmmm, this really is a sad indictment on the industry. So you have unforeseen costs and then charge your clients for extra services that haven’t been added and with no visible plan in place. Did the CEO not know about this a few weeks ago because the claims made in the Mumbrella hangout are very contradictory? Might spend my money on that other AMI instead!
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@Marvin, this has obviously affected you very deeply on some emotional level! I hope you seek out some support.
As a marketer for many years now, I’ve found the AMI very lacking in terms of its offering in any value or substance; be it courses (which seem to be marketing 101) or anything else for that matter which they ask $$ for. Including the most basic of networking events. I don’t find their current offering worth the money so can’t see how this extra plead for cash will play out. They really need to look at their offering which appears to be more aimed at students or novices (though consequentially priced out of that particular market’s price range anyway).
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It is understandable that a levy request will not be view favourably, but what this article failed to acknowledge is the work that the AMI has undertaken to strengthen its governance and reaffirm its strategic direction.
It is unfair to target the newly appointed Chair of the AMI in regard to this decision. Darren was nominated to the board mid/late 2014 and was only recently appointed as Chair. While Darren is the public face of this decision, it would have been supported by the board and management of the AMI.
The AMI now appears to have a stronger strategic focus and a remit to demonstrate the role of professional marketing. Our profession needs a strong industry peak and if this levy assists then it will ultimately be a positive for the industry.
Thanks,
Alex
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