Optimizing Advertiser/Agency Relations
January 1, 2004
The opportunity costs of an agency review can be staggering. As one executive with a multi-decade agency relationship said, "Many advertisers don't understand the opportunity cost of an agency review."
Advertisers should think hard about how the advertiser/agency marriage can be saved before an agency search is begun. An agency review can easily take three months; more than four months if the client wants a speculative creative round.
Add to these four months the time required to acclimate up a new agency to their business and the total time involved easily could exceed eight months.
Eight months! Eight months is a long time to be without an agency partner actively working to help grow brand value, sales, share, and profits.
This cost of time translates to real hard- and soft-dollar costs. For every day an advertising executive spends working on finding a new agency, s/he loses a day to work on the business. There is considerable time involved in identifying a search consultant, should they decide to use one. With the search consultant or working on their own, they next need to identify agency candidates, prepare and review questionnaire responses, attend capabilities meetings, travel to agency offices, prepare a speculative assignment, brief agencies and answer questions, attend final presentations, reference check, and review compensation and contract proposals. It can easily approach 30 days per executive. If there are five advertiser executives involved, a search could take up 150 days' combined work.
In addition, it's rare that the speculative work presented in the agency search process presentation actually is then selected to run. So add to the calculation the days involved in really getting down to work with a new agency (briefings, immersion sessions, off-site meetings, work sessions, plant tours, field trips, research, etc.). Imagine how much more of that time could be spent on company work if the advertiser could find a way to save the relationship with the current agency.
Consider an agency pre-review. Two averted agency reviews follow.
Mini Case 1: Consumer Products Company Spending $50+ million
- New Marketing Head joined company and wanted to shake things up, felt they had the B or C players from the agency on its account.
- Received proposal from a consultant to help handle search for new agency.
- Presented plan to their CEO who said, "Try harder to work with the incumbent."
- Company CEO had prior long-term relationship with the Agency CEO.
- Marketing Head met directly with Agency CEO.
- Requested all new lead people on the account.
- Agency complied by moving people from another account where Marketing Head admired the work.
Three years later, Marketing Head is still with the same agency and is now proud of the work they are doing.
Mini Case 2: Durables Company Spending $30+ million
SVP of Marketing called me asking for help with an agency search, citing their current agency was not producing best-in-class communications for all the company's work.
- Revelation was that SVP Marketing had not personally or explicitly told agency management of the severity of his concerns.
- Rather, VP Marketing had expressed concerns to SVP Account Director.
- Recommended that the SVP Marketing get involved himself and elevate the gravity of the situation.
- SVP Marketing met directly with the Agency President.
- SVP Marketing presented written document with concerns, specific expectations, and a three-month ultimatum to improve before the client would start review and exercise termination clause in the contract.
- Agency President changed the creative team and added an EVP Account Director to provide oversight of the SVP who hadn't fully communicated issue to Agency President earlier on.
- Two years later, the agency is still working with the advertiser on a reduced scope of work.
- Advertiser is performing some work in house.
Both of these cases illustrate positive actions that clients can take to improve their current agency relationship and get a new team without the pain and time required to search for a new agency.
In the former case, the advertiser management's emotional desire to stick with the incumbent drove the head of marketing to work harder to mend the agency relationship. Correspondingly, the agency head wanted to renew the trust the CEO had in him.
In the latter case, the pre-review of the incumbent also saved the agency relationship.
The good news is both parties agree on similar repairs for getting the current house in order before building a new one, primarily involving more senior management or personnel changes.
In our quantitative survey, the number one answer from advertisers on actions taken by agencies to improve relations was "changing their account team". The second most-popular answer was "got top management more involved." The number one answer from agencies was "involving senior management" followed by "changing process" and "changing the team."
- Advertisers should consider an agency pre-review.
- To paraphrase "don't send a boy to do a man's work," don't send too junior a client to express dissatisfaction with too junior an agency person.
- Advertisers should express serious concerns in writing.
- Agencies should listen with their eyes, not just their ears.
"Optimizing Advertiser/Agency Relations." Joanne Davis, President, Joanne Davis Consulting Inc. New York: ANA, 2004.