FUTURELAB

Clients and Agencies – A marriage in trouble?

Golden Propeller30 September 2009

A Conversation Starter

This may hurt a little….

THE ARCHITECTS

FUTURELAB

We assist

Marketers to maximise the return on their marketing investment.

Innovators to come up with meaningful propositions.

CEO’s to grow profits through customer-centricity.

Athens Brussels Bucharest ChicagoHamburg HelsinkiIasiKievMelbourneMiamiMoscowShanghai

Some CredentialsAstra ZenecaDeloitteFortis InvestmentsHeinekenHewlett PackardLegoNokiaOrange MobistarSanomaUnileverVodafone

The Client-Agency Relationship is troubled

FUTURELAB

Across the board ...

automotiveadvertisingtelco

-6%

-21%

-48%

The Net Promoter Score ™ is a registered trademark of Bain, Satmetrix and Fred Reichheld

Net Promoter Score™ by Industry

Prelude: How will Agency’s Fare in a Market Where Clients are Dissatisfied?

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FUTURELAB

Likelihood to recommendLow High

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Low

HighHostages Loyalists

Defectors Mercenaries

Prelude: Are Marketers Held Hostage by the Advertising Industry?

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FUTURELAB

First, we talked to the agencies

First, we talked to the agencies….

FUTURELAB

Sources of Client FrustrationRecognise these?

• Henry Ford-style sales techniques in a solutions market• Creative talk where ROI language is needed• Media intransparency• A ‘pleasing’ attitude vs. ‘doing what is right’• An addiction to saturation bombing vs. engagement• Lot’s of digital talk, but no integrated action• Insufficient understanding of retail/sales reality• Insufficient C-suite air cover• Lack of international integration• Orthodoxy where fresh thinking is needed

Prostitutes & Thieves?

“We knew that it wouldn’t work, but the client wanted it. So we made it happen. After all, under all the gloss, we must accept that we are prostitutes.”

Head of Business Development commenting on modifications to a global campaign you know.

© Jose Antonio Sánchez Reyes | Dreamstime.com

FUTURELAB

FUTURELAB

Then, we talked to the clients….

WHAT CAN YOU DO ABOUT IT AS A CLIENT?

FUTURELAB

1. Don’t ask for integrated solutions from those that can’t give them2. Give hard ROI & business targets to your agencies 3. Call in media auditors to validate effectiveness and the efficiency4. Encouraging your agency to challenge your beliefs5. Insist on engagement and relevance in stead of saturation bombing6. Validate an agency’s digital capabilities and then forget about technology.7. Ensure every initiative connects to the retail (or B2B sales) floor8. Clarify your expectation for analytical/strategic C-Suite support9. Make sure your people speak to your agencies with one voice10.Break industry orthodoxies (also on compensation), and hire more people

10 THINGS YOU CAN DO AS A CLIENT

FUTURELAB

Also see appendix!

Is this fair?Is it all the agencies fault?

So, then we put them together in a room…..

We, the Agencies, hereby commit to abide by the following rules:

I will always offer objective solutions

I will always make sure that I understand your product, your market and your company

I will always be expert in what I talk about – or bring an expert to the table.

I will always offer you the best solution to fit your situation

I will always understand that you need to sell products, not win awards at the next festival

I will dress and speak properly when dealing with your senior management

I will help you write a good brief

I will confront you when I think you are wrong

I will offer you practical and implementable ideas

I will honour your deadlines

I will monitor what is going on, and have the courage to say stop, or change course

I am willing to accept financial consequences for my work

We, the Clients, hereby commit to abide by the following rules

I will always provide a solid brief written with insight and understanding of our own - and the agency’s - business.

I will always base my planning, choices and decisions on objective criteria

I will be open to discuss and consider well-structured and presented experiments.

My legal department will be aware of the realities of marketing. I will share my strategy and my research with you

I will make ROI my guiding objective, even if it scares me too.

I will take a long term view of the needs of my customer and my business

I understand that you have processes and deadlines too

I will provide you with a clear decision making process

I understand that I have bought your time, not your soul

I understand that cheap, fast and top quality do not normally come in one package.

I will say thank you, if you have done a good job

This presentation (soon, extended version):

http://www.futurelab.net/presentations

Reports:

http://www.futurelab.net/publications/papers/publications

Recondisering the Advertising Industry (also in Russian)Bridging the Brand Agency Divide (also in Russian)

Manifesto soon to come

Read and Contribute

Now what?We need your input.

FUTURELAB

Clients and Agencies – A marriage in trouble?

Appendix

A Conversation Starter

#1 Solutions Instead of Products

FUTURELAB

Client need:

A Truly Tailored Approach

75% of senior brand decision makers that approach a communication agency seek to buy solutions for their business problems (*). They want a strategic partner, not a service provider.

Services that Fit the Model

Many agencies don’t really tune in to the client’s needs. Instead, they listen to the client’s request for a solution and come back with an answer that fits their in-house capabilities and compensation model.

Agency Response:

Client-side Suggestion:

Only ask solutions from agencies with a strong strategic planning team which:

• Focuses on your business issues, numbers and customer journey.• Pro-actively liaises with other parts of your business to ensure that any initiatives can

be implemented at every touchpoint of your brand.• Has sufficient political clout in the agency to “make things happen”.

#2 Return on Investment

FUTURELAB

Client need:

Show me the ROI

CMO’s are under increasing pressure to prove that if a million is spent, more than a million is made. And agencies need to help in this analysis.

We Are Very Creative … and Big …

Most agencies don’t talk ROI. Instead, they emphasise the budgets they manage and the awards they have won.

Agency Response:

Client-side Suggestion:

Disregard the traditional agency rethoric and focus your agency on results, not awards. Give them hard targets where possible. Encourage their creativity, but ask for the business rationale behind each initiative. Request impact scenarios for the various media-message combinations that were considered.

#3 Media Transparency

FUTURELAB

Client need:

Be a Trusted Media Partner

At best, the advertising and media industry, can be called intransparent. This is causing brands world-wide to request a better insight in their agency’s dealings. Especially on the media front.

Bad Apples

While pressure mounts, agencies are not easing the minds of brand leaders.

• Continued intransparency• Underperformance &

creative math• The occasional scandal

Agency Response:

Client-side Suggestion:

• Always appoint an independent media auditor who validates – with the agency – that a proposed media strategy makes sense, and that everything is delivered as promised.

• Review the compensation models you force upon your vendors. A key reason for them to make under the table deals may be that they simply aren’t able to make a straight living.

#4 Creative and Operational Integrity

FUTURELAB

Client need:

Clients want their agency to be a trusted advisor.

A mental sparring partner. An asset manager for their marketing investments. Someone with the flexibility of a great vendor, yet the resolve of a doctor who is not prepared to give bad medicine.

We know many admirable agency executives. But sadly, they are matched in numbers by those who have less regard for their client’s best interest. Whether this is driven by cynicism, questionable motivations or competitive pressures is hard to assess.

Agency Response:

Client-side Suggestion:

Trust your agency, but test. See how it reacts when presented with the occasional red herring and opportunity for abuse.

Say something silly. Propose a non-sensical modification to a campaign. See whether people agree. If they challenge you back, praise and encourage discussion in the future.

#5 Engagement Instead of Noise

FUTURELAB

Client need:

Engage Our Audience

Brands want and need to engage with their customers. They need to conduct conversations. Build communities. This means that they need to develop marketing messages which their customers WANT to hear rather than force-feeding them through intrusion.

Saturation Bombing

In spite of all the talk at conferences, many agencies are still in the business of “saturation bombing”. Brands still get recommendations to buy enough GRPs to break through the clutter and maintain their Share of Voice.

Agency Response:

Client-side Suggestion:

Make it clear in the briefing that you will ask for every proposed initiative:

• How it will capture the attention of the targeted audience, rather than intrude on it?

• How the proposed media/message combination is relevant to the audience’s situation? How it will make their conversations and life more interesting?

• How it will help the target customer progress on the customer journey? What is the next communication?

#5 Engagement Instead of Noise

FUTURELAB

Client need:

Engage Our Audience

Brands want and need to engage with their customers. They need to conduct conversations. Build communities. This means that they need to develop marketing messages which their customers WANT to hear rather than force-feeding them through intrusion.

Saturation Bombing

In spite of all the talk at conferences, many agencies are still in the business of “saturation bombing”. Brands still get recommendations to buy enough GRPs to break through the clutter and maintain their Share of Voice.

Agency Response:

Client-side Suggestion:

Encourage your agencies to embrace a media-neutral, customer-centric approach to communication planning.

Ensure that your budget, negotiations and actions do not re-enforce the existing agency silos (media, creative, …).

Request various specialist agencies to cooperate on one “holistic” view of your audience’s communication landscape.

#6 Walk the Digital Talk

FUTURELAB

Client need:

Walk Digital

With consumers massively shifting online, marketing budgets are following. Brands need their agencies to handle digital media with the same facility as traditional media channels.

Talk Digital

Most agencies “talk digital” at conferences, but many don’t act on their words:

• Traditional agencies talk well yet often can’t back their digital claims:

• Digital Agencies often miss depth in communication and strategy

Agency Response:

Client-side Suggestion:

Audit the digital skills of your agency, not in words, but in actions. If techno-buzzwords are used in pitches or proposals, question why.

Consistently shift technology conversations to the topic of engagement.

#7 Think of the Shopper

FUTURELAB

Client need:

Shopper Marketing

There are those who consume, those who buy, and those who influence the two above. Recent research in word-of-mouth has only re-emphasised the importance of these influencers and consumers on the actual purchasing decision. This puts shoppers at the centre of the marketer’s agenda.

Retail Ignorance

Agencies struggle with the retail floor. Their people typically never worked in stores, never sold to real consumers. Don’t know how a cash-register works.

Agency Response:

Client-side Suggestion:

As retail (B2B sales/showroom) situations are alien to most agencies, force the conversation. Always ask for the salesfloor implications of every iniative. Introduce retail metrics. Insist creatives talk to real shoppers. Have their account managers filling racks on the salesfloor, or assist in the warehouse. Make it clear the job isn’t done until the customer has bought.

#8 C-Suite Credibility

FUTURELAB

Client need:

Support me in the C-suite

It is an unfortunate reality that many marketers struggle to be taken seriously in the boardroom. Marketing is seen by other parts of the business as a frivolous and unaccountable money spending department.

Look how cool and fun we are ...

Rather than adopt a more conservative C-suite approach, communication agencies have always had an air of creativity and cool

Agency Response:

Client-side Suggestion:

Brief your agencies to present their ideas so it is easy for you to let them travel throughout the business. Have them talk strategy and numbers. Include an internal alignment and information processes for various stakeholders. Avoid marketing-speak.

#9 Agency Co-ordination (360°)

FUTURELAB

Client need:

Integrated international action

When more than one agency comes to the table, they need to act in a co-ordinated manner. Not just when it comes to creative execution, media buying and production, but especially in getting the business result.

A nice storefront

Agency teams typically don’t “mix well” when they have to look outside their functional or geographic borders.As a result, agency cultures clash, commercial priorities differ, local agenda’s conflict.

Agency Response:

Client-side Suggestion:

Your agency network can only speak with one voice, if your people do the same. Work with your lead agency or appoint a project manager to develop an alignment programme that ensures your own marketing teams, as well as the agency’s have the same objectives, priorities and goals. This needs to cover every step of the customer journey, every touchpoint and every agency or vendor you work with.

#10 Break Orthodoxy

FUTURELAB

Client need:

As the market changes quicker than brands can follow, clients want agencies to break the mould. Come up with new ways to address the market. New insights. New opportunities. Make a difference to the brand, the customer and the bottom line.

Marketing communication is an industry interested in sustaining itself. The quest for volume and awards, leads to standardisation of processes, homogenisation of messages and blandness of solutions.

Agency Response:

Client-side Suggestion:

Where agencies lack initiative, brands should break the marketing orthodoxies themselves. Some thoughts include:

• Facilitate a captive agency• Crowdsource creative

• Set up pool agencies• Join Communication Labs• Break headcount rules