Are Performance Evaluations the Key to Reducing Agency Breakups?

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Are performance evaluations the key to reducing agency breakups?

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Performance evaluations. Love them or hate them, they’re just a part of the professional world. Evaluations have, perhaps, even higher stakes between an advertiser and their agency partners, but are we even evaluating properly?

Across the advertising world, performance evaluations are common practice. A World Federation of Advertisers study found that 96 percent of brand advertisers have a formal agency evaluation program in place. Too many still aren’t benefitting from truly actionable insights, though, and miss out on the opportunity to have meaningful discussions with their partners.

Sadly, evaluations become a line item on someone’s to-do list and don’t receive the level of attention they deserve. It’s important to design an evaluation process that invites rich and honest dialog while enabling clear action plans to course-correct and strengthen the relationship over time.

A recent CMO Council report shows marketers believe they, too, need to evolve into better communicators, better partners and do more to hold both their organization accountable for behavior, transparency and results. According to the report, Reshaping Global Engagement Operations, 65 percent of respondents intend to take on the responsibility of clearer communication with their partners, especially when it comes to defining success and clear statements of work. Notably, 63 percent of respondents also indicated that establishing clear measures of success that aid in the progression of the relationship is a priority. This evidence shows – as one might expect – that the strongest relationships are those that are constantly evolving.

However, not all marketing leaders have these aspirational goals. As advertising headlines show, we are acutely aware of the ongoing trend of agency break-ups and reviews. Look at Mountain Dew’s recent split with its partner, BBDO New York, after nearly a half-century; or Travelocity replacing its four-year-old partnership after a review process. I am a firm believer that well-designed, 360-degree performance evaluations can significantly reduce the likelihood of a partnership unraveling. It’s about mutual accountability. Could an effective performance evaluation be the key to saving these relationships?

Despite concerted efforts on everyone’s part, sustained high-performance relationships are rare. Too many advertisers still fail to establish a good read on the relationship before it deteriorates to the point of no return. Thankfully, client/agency performance evaluations have been around for a while now, and industry best practices have rapidly emerged. This growth removed the guesswork and improves the value of this process for all involved. Successful client/agency performance evaluations share the following characteristics:

  • Comprehensive: They must provide a holistic view of the relationship and its multiple facets.
  • Effective: They must drive positive change and justify the time/resource investment.
  • Sustainable: They must help identify trends over time, across geographies or across agencies.
  • Affordable: They must be reasonable in cost and time commitment.
  • Simple: They must be simple to set up and roll out with effective training and communication.
  • Participative: They must be considered conclusive and get adequate participation.
  • Equitable: They must foster active collaboration, respect and trust. They must also be balanced.
  • Actionable: They must generate actionable insight that can translate into tangible improvements.

Call them eight secrets to success or just good guidelines, but when all of these are taken into consideration the performance data is a fundamental resource for brands looking to make better decisions and improve the performance of their work. No more guesswork. The effective use of data for managing agency relationships delivers stronger relationship outcomes. Common sense says that identifying issues early on, before they get to be majorly disruptive to the relationship, is in everyone’s best interest. Too often, though, unresolved issues grow like bacterial infections that eventually end up killing the partnership and causing painful break-ups and reviews.

Don’t let your partnerships to cause you pain! A properly executed performance evaluation might just be the key to reducing agency break-ups and increasing partnership longevity. If you’re not regularly reviewing progress against action plans with your agency, you’re not getting top value from these relationships. Period. Relationships – even the best ones – take work. Don’t be overconfident and miss the potential hidden icebergs ahead, leading to yet another break-up headline.

Bruno Gralpois, principal and co-founder at Agency Mania Solutions, author of Agency Mania 2nd Edition: Harnessing the Madness of Client/Agency Relations for High-Impact Results, has been instrumental in establishing Agency Management as a central global discipline for many of the top 200 advertisers. His commitment to successful client/agency partnerships led Gralpois to co-found Agency Mania Solutions and serve as principal. Before that, he held leadership positions at industry-leading companies, including Microsoft and Visa, as well as various pre-IPO software companies. Gralpois is an active member of the ANA Faculty of Marketing, which helps build effective advertiser-agency relationships. Connect with Bruno on LinkedIn here.

By: Bruno Gralpois, Co-Founder & Principal | December 5, 2019