Do Advertisers Value Their Agencies?

4 Aug

client - agency relationshipsThis question came to mind when reading the results of a recent survey conducted by the Institute of Advertising Practitioners in Ireland (IAPI) dealing with the state of the advertising industry.  One of the survey respondents expressed an opinion that clients were “much more aggressive and much less loyal.” Further, the representative from a creative agency stated that clients were “aggressive on cost and expectation and less committed to supporting their agency in their efforts to deliver excellence.” 

Subjectively speaking, many of us involved in the advertising space would likely answer this question with an unqualified “no, not as much as they once did.” 

The reasons for holding such an opinion may be many and varied, but the evidence manifests itself in the fact that client/ agency relationships simply are not as enduring as they once were.  There have been a number of studies conducted over the last half-dozen years which have pegged the average relationship length in the 3 – 5 year range.  If advertisers truly valued their agencies surely this would manifest it in longer, more productive relationships.  Wouldn’t it? 

Once full-service ad agencies “unbundled” this set the stage for advertisers to expand their agency rosters to address their “specialized” marketing needs.   In turn, this created bench strength and ultimately allowed advertisers to more readily re-allocate brand assignments across their stable of agencies, which certainly accounts for some percentage of client/ agency change.  Over time, the notion of transitioning work from one network partner to another became more acceptable and perhaps led advertisers to view going outside of their current agency rosters as less of an issue. 

Change costs.  Whether measured in terms of the time required to effectively transition an agency or the opportunity costs tied to a “new” agency’s learning curve on the business.  This in turn creates risks with regard to an advertiser’s demand generation and market share accretion efforts.  Yet in spite of the cost of change, advertisers continue to change out agencies at an alarming rate.  

One cannot place blame for this trend solely on advertisers.  The actions and behaviors which precipitate the termination of a client/ agency relationship both parties have a shared responsibility.  Similarly, clients and agencies each hold the keys to extending both the length and productivity of their relationship.  It begins with a simple, but powerful concept… mutual respect.  After all “respect” is an important proof point of the extent to which one organization values the contributions and support of another. 

Advertisers can take the lead in this area with a series of simple, yet meaningful processes which will demonstrate the extent to which they value their agency partners:  

  • First and foremost, advertisers can and should align agency compensation with desired agency outputs, measured both in terms of detailed statement of work outputs and the resource commitment required by the agency to deliver on those expectations.  
  • Minimizing project reworks and the number of start / stops in the planning and execution phases of creative and or media development will go a long way to demonstrate the regard in which advertisers hold their agency partners.
  • Look for opportunities to improve the briefing process.  Advertisers who can effectively and succinctly prepare their agency partners at the start of a project provide a huge morale boost for their agencies and greatly enhance the odds of producing great work.
  • Reinforce the fact that as a client, you value the input of your agency partners.  Encourage candid, two-way communication among all stakeholders involved in the Client/ Agency relationship.  To be effective, this concept must extend beyond the annual 360° performance review process.
  • Encourage full transparency when it comes to agency reporting and financial management.  Supplement this with periodic (i.e. quarterly) business reviews so that both sides have a clear understanding of where everything stands, both as it relates to budgets/ project completion as well as with the relationship itself. 
  • Consider rewarding successes with incentive programs tied to the efficacy of the agency’s marketing efforts, using brand relevant milestones as the guideposts (i.e. awareness, sales, market share).

As Henry Ford once said: “Coming together is a beginning.  Keeping together is progress.  Working together is success.” 

Taking these proven steps will go a long way toward demonstrating the extent to which advertisers value their agencies, as well as the respect which they have for the art of crafting and delivering effective marketing communications.  In the end, they can also represent an important building block in extending the length and productivity of their agency relationships. 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: