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Admit it: We are all Maniacs!
Most of us are maniacs. If you read this, it probably means
you are too. If you are in a leadership role in a Fortune 500
organization, or support one, chances are you are challenged
to keep up with the rapid transformation of the discipline of
marketing and the complex web of resources available to you.
You are not alone. It’s a jungle out there and it’s easy to get lost.
Last year’s ANA survey “Enhancing Client Agency
Relationships” showed unequivocally that clients see that
long-term client/agency relationships are important to their
business strategy, and drive performance: 65% of clients see
that the agency plays an important role in their business
strategy and 74% in driving business results. So far, so good.
However, the growing obstacles faced by marketing and
procurement leaders to cope with change while simultaneously
driving growth has made it increasingly challenging for them
to turn their agencies into strategic assets that give them the
competitive edge they are looking for.
Let’s step back to look at the current mania and demystify
common beliefs that get in the way of effective client/agency
partnerships. And let’s find out how the most sophisticated
companies are building a robust marketing muscle with their
agencies that propels their efforts forward.
Myth #1: Agencies of record (AOR) type relationships
are endangered species.
The Reality: Although project work engagement is on
the rise, brands still need to rely on the strategic insight
and support of AORs to build long-term success.
Only bad AOR relationships should be endangered species. You
know the ones I am referring to: the agency takes the client for
granted, there are too many layers of middle management, the
client is overpaying, the performance is suboptimal and the list
goes on. For the most part, those are now extinct. Although
AOR relationships do not last as long as they previously did,
the clients willing and able to build these partnerships are
simply performing better in the marketplace. Project work
engagement is on the rise with large clients, and in some
instances, it serves a valid purpose that should not distract
from the strategic work conducted by AORs in branding, media
and digital. At the recent ANA Agency Financial Management
Conference, this was one of the topics brilliantly covered by
Debra Giampoli, Director of Global Strategic Agency Relations
at Mondelez International Inc. Debra noticed that project work
is increasing as clients engage more-specialized partners and
need to work with those for shorter periods of time.
Myth #2: Hiring a new agency will fix prior challenges.
The Reality: Brands that are not carefully examining
root causes might simply repeat the same mistakes
over and over.
Have you seen the movie before? I certainly have. A large
brand decides to kick off an agency review and selects a new
agency. The honeymoon is amazing, yet no one can figure
out why less than a year later the work and the relationship
appear to be strained and lose momentum. In “Agency Mania,”
I reference the work by the country’s foremost relationship
experts: Drs. John and Julie Gottman, both Seattle-based
researchers and clinical psychologists at the Relationship
Research Institute. They have developed a Relationship
Checkup for couples, similar to our own client/agency
performance evaluation tool, which allows a deep assessment
of the relationship, behaviors and mutual responsibilities
played by both parties. Louis Armstrong says it best in his
song “It Takes Two to Tango.” If a client fails to understand the
role it plays in the relationship, it is likely to miss out on the
opportunity to address it with existing and future partners.
Changing agencies might be the right strategy at ti mes,
especially if a client is looking to secure new competencies
or to move away from a relationship that deteriorated to the
point of no return.
Myth #3: Procurement is the main force behind
Madison Avenue’s financial carnage.
The Reality: ICYMI (In Case You Missed It), ZBB
(Zero-Based Budgeting) is the new reality for everyone,
including marketing.
You’ve all heard it in trade magazines and at conferences.
The golden years of Madison Avenue are long gone and the
world of agencies is struggling to survive under the continued
pounding of procurement teams looking to squeeze every
dollar out of these relationships. The increase in workload
and client expectations is real. However, it’s important to
set the record straight about a few things. First, the shift
of procurement as a strategic value-add organization to
marketing. Procurement professionals are no longer the
cost-cutting machine they are oft en associated with and have
stepped up to take a seat at the marketing leadership table.
Second, the world of agencies is not bleeding so much aft er all.
Just look at the recent earnings reports from the big holding
companies that continue to reinvest themselves and drive
value – WPP, Omnicom, Publicis and IPG. They are showing
very healthy organic growth, margins and valuations.
Lastly, ZBB is the new buzzword in marketing. The need
to challenge past baseline assumptions, move away from
incremental budgeting and justify the investments made is the
new reality that drives greater pressure with agencies tasked
to participate in this oft en painful but necessary bottom-up
approach. Thankfully, automated scope of work management
systems provide the foundational infrastructure to prioritize
work and land on the right agency fees and staffing to support
marketing objectives.
Myth #4: The old-fashioned way of managing agency relationships is still adequate.
The Reality: Agile, fast moving, demanding
organizations must leverage cloud-based solutions to
automate and streamline their agency management
processes.
It’s no secret. Sophisticated brands have invested for years
in marketing automation to improve the speed, quality and
effectiveness of their marketing efforts. Whether they are using
Oracle, IBM, Salesforce or Adobe Marketing Cloud, they are
now leveraging the benefits of rich analytics and automation
to power their marketing engine. Yet, when it comes to the
management of their valuable strategic partnerships, they
oft en defer to obsolete or generic ERP systems or manual
processes, and erratic exchange of documents. Did you say
mania? Well, there it is, as those fall short of giving them the
resources they need to manage their comprehensive scope
of work, agency staffing and financials, client briefing, and
onboarding and training, as well as the performance evaluation
of their agencies. Without this information readily available,
decision making is seriously compromised.
We are all maniacs indeed. But not always for the right
reasons. With the right mindset and a rigorous approach to
agency management supported by the use of technology and
data analytics, the current mania that might paralyze you and
your organization can now be turned into brilliance, and your
agencies into strategic assets that set the brand apart.
