Tag Archives: agency relationship management

Are Agency Relationship Managers a Luxury or Necessity for Advertisers?

26 Jul

madison avenueIn the “good ole” days of full-service ad agencies, 15% commission and powerful, independent ad agency brands… responsibility for an advertiser’s agency relationships was typically limited to a handful of executives within the organization, up to and including the CEO. 

Over the course of the last 30+ years, agencies decoupled, remuneration programs evolved, ad agencies went public, and agency holding companies rose to power and the number of agency partners on a client’s roster have greatly increased.  Unfortunately, as agency rosters grew in breadth and their interaction with client personnel expanded across the organization, there was one area that was overlooked.  Simply, “Who” would be responsible for these important relationships?  Factor in CEO and CMO turnover rates and one can begin to understand why client/ agency relationship lengths are now measured in years rather than decades.   

For those who believe that advertising agencies play vital strategic roles in building and positioning brands for long-term success, driving near-term demand generation and in furthering an advertiser’s understanding of their customer base, agency turnover is a risky and expensive proposition.   

“Remember upon the conduct of each depends the fate of all.” ~Alexander the Great 

In order to stabilize client/ agency relationships and to optimize performance across their agency network, many advertisers have invested in the addition of Agency Relationship Management specialists.  Working across an advertiser’s organization to assist Marketing, Procurement, Legal and Finance with the various nuances of effective agency stewardship this position can be a vital component of any supplier relationship management initiative.   

From contracting for agency services to developing remuneration programs and performance evaluation processes to overseeing contract compliance assessments and cost benchmarking audits there is much work that goes into maintaining an effective and efficient marketing supplier network which may include dozens of agencies.  The Agency Relationship Management specialist brings the subject matter expertise to counsel internal stakeholders on industry “Best Practice” and the experience to help shape decisions pertaining to key aspects of the organization’s agency stewardship efforts. 

As importantly, from an agency perspective, this position can and should serve as an advocate and an ombudsman providing an objective perspective when it comes to resolving issues or mediating disagreements.  By further providing unambiguous, consistent two-way communication between the partners and their respective stakeholders coupled with the establishment of clear expectations regarding agency performance the odds of building strong, enduring relationships are greatly enhanced.

This service can either be maintained internally at the client (by appropriate personnel with both broad and deep advertising experience – client and agency side) or the service can be outsourced to a select qualified and dedicated specialist or group. 

For those advertisers who view their agencies as partners rather than vendors, and who want to foster increased involvement, contribution and interactivity, a strong case can be made for the addition of the Agency Relationship Manager role.  Responsibilities would entail being the “hub” of all things related to agency stewardship, developing a marketing agency database cataloging all aspects of the client/ agency relationship and agency performance, disseminating information to all stakeholders and sharing industry “Best Practice” insights on this important area.  It is a role which requires a tremendous amount of patience and tact, but one where the value provided far outweighs the salary investment outlay required to improve an organization’s agency stewardship and financial management practices. 

Moving Toward Strategic Sourcing

17 May

Advertisers strategic sourcinghave come a long way in forging stronger ties between their marketing and procurement teams.  Yet, there is much more to be done as organizations look for ways to improve their return on marketing investment (ROMI).  After all, while important, expense reduction is only part of the ROMI equation and some would argue a secondary consideration when contrasted with marketing’s role in demand generation.

The Association of National Advertisers (ANA) released the results of a recent survey of procurement professionals fielded earlier this year.  Not surprisingly, survey participants indicated that “cost reduction” and “cost avoidance” were the top two metrics by which their efforts were judged within their respective organizations.  No problem.  These are important financial goals for any enterprise.

However, the key to evolving the collaboration between marketing and procurement is to evolve their focus to include various means of boosting supplier performance.  The potential strategic value related to improvements in; agency relationship management processes, resource allocation decision making, supplier innovation and client/ agency engagement can have a meaningful impact on the bottom line.  On this topic, the aforementioned ANA survey would suggest that marketing and procurement have made significant progress, at least philosophically.

So what are the impediments to strategic sourcing playing a more meaningful role in marketing procurement and supplier relationship management?  Many in the marketing and advertising industry would suggest that “experience” is the principal challenge facing procurement professionals when it comes to the marketing services arena.  To be fair, this is not a procurement issue, this is an organizational issue. Recruiting sourcing talent with marketing experience, educating and training procurement professionals on the nuances of professional services sourcing and creating a culture which embraces accountability and transparency across the organization are key issues to be addressed.

In our opinion, marketing has a significant opportunity to shape the organization’s efforts in building the proficiency of the procurement team.  Work begins with, but clearly is not limited to, assisting HR to identify sourcing professionals with marketing experience, assisting in the crafting of job descriptions, educating and informing their procurement peers on differences between marketing services and other direct or indirect procurement categories, and working diligently to articulate their supplier optimization initiatives as the basis for driving goal alignment between marketing and strategic sourcing.

Unfortunately, in some organizations, rather than assist in developing procurement’s skill set and resource offering, marketers take advantage of the procurement team’s lack of category experience to stave off or minimize their involvement within the marketing services realm.  Given the significant level of marketing investment advertisers are making this is clearly not a desirable outcome; either as it relates to ROMI or relates to mitigating financial and legal risks inherent across the marketing services supplier network.

Unlike George Carlin’s “seven dirty words” which were once “forbidden” by the broadcast industry; accountability, audit, collaboration, cost containment, expense reduction, risk management and transparency are not taboo.  Rather, these activities should be considered necessary ingredients in any strategic supplier management initiative.   It remains a mystery as to why this perspective has been slower to take seed in the U.S. advertising marketplace than it has in the U.K. and Western Europe, but it is an issue that will need to be addressed for any real progress to occur.

Interested in learning more about constructive marketing procurement programs? Contact Cliff Campeau, Principal at Advertising Audit & Risk Management at ccampeau@aarmusa.com for a complimentary consultation.

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