Lessons from Agency Relations DayApril 19, 2012
By Bill Duggan, Group EVP, ANA
Earlier this week, Walgreens hosted ANA Agency Relations Day, which provided “nuggets and nuggets” of learning on client/agency partnerships, summarized below.
Production Decoupling: In June 2011 Accenture appointed TBWA Worldwide as its global advertising agency of record and Tag Worldwide as its global production agency. Decoupling production from creative via Tag was done to improve efficiency, drive further cost savings and improve the quality of execution. Production decoupling (also known as centralizing or unbundling) is the separation of the business of production from creative development. There seemed to be a general lack of awareness among Agency Relations Day attendees on this issue. ANA has a terrific insight brief that can help -- http://www.ana.net/miccontent/show/id/ib-production-decoupling-updated.
Agency Relations in A VUCA World: VUCA stands for Volatile, Uncertain, Complex, and Ambiguous, according to Debra Giampoli of Kraft. The world as we know it is over - it's no longer predictable, we can't rely on what's worked in the past, the speed of change is accelerating, technology is exploding and consumers are embracing it more quickly than most marketers are. If we’re going to thrive in the VUCA world we must not be afraid, take risks, be open minded, develop new skills, and always be evolving. Do it, try it, learn from it, and try something else. Immerse yourself in what’s new. Uncertainty is the new normal. Kraft has become a better client in this new world by having clear, tight, and consistent strategies. They have assumed responsibility for those strategies and identified internal champions with great taste. Kraft has made it a priority to make great client-agency matches through great chemistry and to build and sustain those relationships.
Agency Evaluations: For Walgreens, agency evaluations help incentivize agency partners to share in company goals and business objectives. Agencies feel part of the team, with “skin in the game.” Further, agency performance monitoring can greatly improve the effectiveness and efficiency of marketing. ANA’s own research shows that the vast majority of marketers (82 percent) report that their companies regularly conduct formal agency performance evaluations. The top benefits derived from a formal agency evaluation process are identifying and improving under-performing agency relationships (92%) and identifying and recognizing high-performing agency relationships (85%). ANA’s advice is to not only conduct regular agency evaluations but do so for all your agency partners (e.g., PR, multicultural, etc.).
Integration: For the United States Postal Service every communications element has a role and contributes to results. The USPS achieves integration via its strong belief in a core agency team at partner Campbell-Ewald comprising the right disciplines. There are not separate agencies and there is only one P&L. There is cohesion of ideas through one group of people working together, rather than departments overtly selling. Benefits include everything created together once, learning as a team, and cross pollination of skills.
Incentive Compensation: This is also called “pay for performance” or “performance incentives” and is a method where some, or all, of the agency’s compensation is tied to the achievement of performance results mutually agreed by the client and the agency. When done well, performance incentives align agency and client on business/communications agendas and goals – the discussion shifts from just hours/FTE’s/costs to meeting performance objectives. 46% of marketers use incentives with at least one of their agencies (per ANA survey results) with a skew towards the biggest spenders.
What Makes a Good Client: Great perspective provided by Rob Davis of Starcom who noted a client who ends every conversation with, “what can we do better?” According to Jack Rooney of Ogilvy, empathy and respect are key. Empathy for the fact that agencies are a unique breed that is genetically disposed to making clients happy. Respect for the agency’s craft—you hired them because you want them to do something you can’t do in your organization.
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