For some the relationship is a strategic and tactical battlefield, for others it is a match made in heaven. The status of the relationship is never fixed and may well change following recent guidance and research that has the potential to increase tensions and be detrimental to the client-agency relationship.
First came the debate around the new retainer plus and project plus contract frameworks introduced by the voices of British advertising the ISBA and IPA back in June 2015. An approach criticised for doing nothing to resolve the larger, underlying tensions between clients and agencies that threaten to undermine the marketing industry and the quality of work created by agencies.
Then came the findings MediaSense, IPOS and the ISBA’s Media2020 research findings last September 2016, signalling marketers intentions to work towards scaling back on agency relationships, driving performance orientated agency models, and gaining more in-house control of campaign activity.
What is Media2020?
A series of surveys and in-depth interviews with over 200 senor marketers and media decision makers from multiple industry sectors who account for over $1.5BN of advertising spend. A summary of the key findings:
- Over half expect to reduce the amount of agencies they work with and bring typically outsourced functions like content development, social media and media planning in-house or to new agencies by 2020
- Most aim to contract directly with media owners and tech companies cutting out the middle agency role
- Media agencies are likely to remain the go to for paid media and creative agencies for big creative ideas but there is ambiguity as to the extent due to current discontent which I took the liberty to interpret as follows:
“Content is king that has lacked creativity and strategic focus. Distribution is the queen that has lacked special effort to be contextually engaging to seize the moment. Performance is merely vanity concerned with what it looks like over what it is”
- Monitoring is a top priority changing the arena right now as the use of attribution modelling (63%) and business impact based KPI’s (76%) to lead and appraise media investments is increasing
- Metric use is increasingly centered on digital metrics for ROI, customer value, engagement, and ultimately developing a single customer view
Why are the results so significant?
1. Signs of preparing for a very different media ecosystem
Insight in to how many businesses intend to organize themselves to meet the challenges of a rapidly evolving media ecosystem. Marketing management at implementation level is likely to increasingly evolve around more agile tactics and project management methods. To do that requires building more internal capabilities to manage customer relationships and the resulting data alongside further digital transformation. A ‘show me the value’ culture is taking centre stage to marketing investment (not cost) and that will influence the nature of agency relationships. Future success will be largely determined by how these processes are managed.
2. Marketers are trying to solve their problems but beware of the unintended consequences
Client issues like transparency, the control of campaign data, performance monitoring, and budget management have all been ongoing agency issues. Marketers intend to reign in control over owned and earned media across content marketing, data management and social media strategies to become more self-reliant and agile, data driven and tech enabled.
This makes perfect sense from a business perspective but the cat is out of the bag and agencies will not exactly be willing lie down and surrender their hard-earned revenues and that is understandable. Business will still need agencies along the way and those suspecting the chop will raise their defences and that will become detrimental to a relationship that requires a collaborative offence.
3. Agencies may become wary about investment hindering development
Agency bosses ears have heard the ramblings of disgruntlement over agency performance from marketers and key decision makers for some time now and vice –versa. However this time the outcomes heighten fears around the worst case scenario. The increasing media investments from businesses, that agencies have built business models around, may be made by internal departments and less will be available to agencies.
An agency is a business like no other and if the threat of declining future revenues seems real then they’re unlikely to continue to invest enough resources in to account teams and the specialist talent that will help grow your business.
No doubt, unless you can show some commitment to what they need as well as your own needs and make them a part of the process you may risk forcing agency leaders to focus even more on survival agenda than leading your account to glory.
4. The threat of undermining collaboration
Today, many of the best results derive from co-creation, risk taking and trust between the client and their agencies and among the agencies themselves. Effective collaboration is a problematic area but essentially is built upon effective leadership, mutual trust and respect, goal alignment, commitment, communication, co-operation and control.
It is perhaps best for leaders to openly discuss research findings and guidance such as these whether the cap fits or not. Use the moment to enhance the bond and iron out budding areas of conflict. Otherwise you run the risk of these external influences chipping away at all of the other building bricks to effective collaboration via the ability, motivation and attitudes within their team.
5. The tendency to focus on the negatives more than the positives
The findings are more a reflection of business clarity on how best to play game and good agencies remember that they provide business models and propositions to help them play it well. Social media and content development are all central to digital strategy which in turn lies at the heart of marketing agility, performance monitoring and data development. When you throw in the increasing costs of agency relationships the findings seems inevitable.
Don’t hate the player, find better ways to work with the player because they make you money…hate the game.
The reality is that for most businesses, agencies will continue to be an effective solution to internal resource and capability issues. They are the heroes with the specialist expertise and objectivity that allows them to thrive in their respective markets.
Overall the research is best used as great direction for clients and agencies on how best to prepare to work together going forward with the intention of creating long-term business relationships.
About the Author: Marvin Miller is a Marketing Management & Campaigns Specialist who works across multi channel marketing strategy, campaigns and marketing implementation. You can follow his daily updates via Twitter and join his professional network via LinkedIn