The Big Q: How to appoint an ad agency
by MarkLives (@marklives) With advertising spend having been under review again this year, brands have been moving business while focusing upon cutting costs, increasing adspend ROI and reducing the number of outside relationships they need to maintain. What have they learnt in their search for new agencies and agency relationships? What have agencies learnt about their clients? And what is driving modern client/agency relationships? We emailed a panel of key industry executives for their take. Here are their responses.
Monalisa Sibongile Zwambila
Monalisa Sibongile Zwambila is the founder and CEO of R\VERBED, a through-the-line black-female-owned and -managed creative agency. She is passionate about the role the agency plays in transforming the sector and enjoys speaking on industry-related matters and leadership. R\VERBED is a 2016 Adfocus Small Agency of the Year finalist. Monalisa is completing her MBA through Henley Business School.
The South African landscape differs from the rest of the world in that, more and more, the consideration when appointing an agency is to view the agency’s BEE credentials. Albeit not enough to win the work, it certainly allows more agencies to get their foot through the door. Minister Rob Davies in May 2016 noted that, under the new codes, the advertising industry was under pressure to achieve 45% black ownership by 2018. Further to this, the codes demand agencies to have a 75% black middle-management quota.
So, before ROI and adspend, how will corporate South Africa begin to appoint agencies that will allow the industry to transform? How will business become the catalyst for this much-needed change and, more importantly, how will this change deliver the results needed by business to not only meet their BEE scorecard but achieve their return on investment?
Fallacy and inhibitor
To begin with, the belief that only large agencies can take on large accounts is a fallacy and an inhibitor for independent agencies to grow and flourish. Furthermore, the view that black agencies should only work on government or “black”accounts entrenches a myopic stance that stagnates the very change we all want to see. How, then, do we begin to redefine how clients in the future will appoint an agency? Will this be driven purely by BEE imperatives or by the common belief that, as SA’s dynamic landscape continues to change, so too must the custodians (agencies) of the brands and campaigns that influence and change consumer behaviour.
Transformational change will come in the appointment of black-owned agencies, and the evolution of the client/agency relationship will come as a result of that. The truth is that smaller independent agencies come without the bureaucracy that sometimes stifles ideas, and their lower operating costs and faster turnaround times provide a convincing argument on their contribution to ROI. In addition to this, smaller agencies are found to be closer to the customer, with more senior resources being available to work on accounts on a frequent basis. Yet, despite this, appoints [sic] continue to be given to the select few.
And so, as we work collectively to bring about change in the advertising industry, clients need to rethink their approach when looking to appoint an agency to one that seeks to address the imbalances of the past while recognising the benefits that are unleashed in the process that deliver not only the right BEE credentials but deliver upon their bottom line.
David Wingfield (@) began his career in brand management at SmithKline Beecham (now GSK) in 1992, moved into advertising in 1996 at TBWA\Hunt\Lascaris as a strategic planner and later stumbled into client service. Through the years he worked on brands such as Standard Bank, BMW, Land Rover, Nissan, Reckitt Benckiser, Nandos, Apple, SAA, SA Tourism and Visa. He left TBWA in 2007 after a five-year stint as MD to join Standard Bank as marketing director: Africa, where he was part of building its Africa franchise with acquisitions in Nigeria and Kenya. In 2010, David moved to Kenya to become CMO of Standard Chartered Bank in Africa before returning to South Africa in 2013 to become head of marketing at Barclays Africa Group.
Traditionally at Barclays/Absa, agency partners were appointed based upon their core competencies and not necessarily a full-service offering. This evolved somewhat over a period of time, as digital and social were coming of age, and the result was a rather cumbersome, unwieldy model that, while extracting competencies and great work, was slow to market and expensive. An analysis of our business requirements and marketing strategy led us to conclude that we could find the competencies we needed for our business in a full-service agency. We also refined our requirement to include specialisation in B2C and B2B segments.
We made a call not to do a creative and strategic pitch, based upon the view that, if agencies could demonstrate a track record of creativity, strategy and effectiveness, why make them go through the cost and pain of creating work that we would never use? We then asked them to demonstrate that they knew how to deal with complex clients and, most importantly, how they would structure a new model to best suit our needs (a large, complicated, multi-geography financial services company).
We found out some interesting things by going this route:
- The South African and African advertising industry is a very healthy place because we were very impressed by the quality from everybody we spoke to.
- The industry is committed to transformation; in many cases, we may not be there yet, but no agency shied from the challenge we put to them regarding transformation.
- Asking agencies to look for a new model meant that agencies did some serious self-reflection and the result was fresh thinking about dealing with clients.
- There are many agencies who have come to the same conclusion as us about splitting B2B and B2C.
- Agencies respect you and your process when you treat them like partners from day one of the pitch process — you don’t need to put them through the mill to prove they can do your job!
Zibusiso Mkhwanazi (@) is co-founder and CEO of AVATAR Agency. He’s a serial entrepreneur, previously known in the agency world for being executive chairman at KRAZYBOYZ digital and later chairman of The Red Quarter Brand Design.
Technology has changed everything. There was a time when hiring an agency was a matter of vetting creativity, credentials, experience and right fit. Today, brands need to ensure that, when they hire an advertising firm, the agency can integrate with the customer relationship management (CRM) software that helps create integrated customer relationships. In a world where devices define the relationships which a brand has with its customers, understanding the engines that build bridges between brands and people is everything.
So, yes, hiring an advertising agency is becoming a lot more like an arranged marriage, rather than an emotional romance. Gone are the days of spontaneously falling in love. Today, big brands want to know that the advertising agency they appoint can manage multi-channel campaigns, analyse customer data, and operate in a virtuous progression. This means that the relationship between the brand and the agency is a marriage that is all about getting smarter, leaner, and more effective at finding/serving/satisfying the brand’s customer.
The technology that underpins all of this
The entry point to doing this is understanding the technology that underpins all of this — the CRM software, the data-collection tools, the marketing software. Agencies must not only understand the technology and how to use it smartly, but must have good, close working relationships with the right software vendors.
Then, it is a matter of having the skill to ensure that everything works together cohesively, and in an integrated way. Appointing the right ad firm means that the agency and brand work together to connect with customers, using the right content, on the right channels, at the right time, and in a way that changes consumer behaviour.
So technology is a big factor when appointing an agency, but my experience with AVATAR clients is that value is just as big a driver. The smart use of technology has changed the way brands connect to customers in a way that is more reportable, measurable and accountable. Because of this, it is not about “if only I know what part of my advertising worked”, but it is more about “the numbers now show me exactly how effective my adspend is”.
Deliver the numbers
Clients are pushing for better value, accountability, measurable returns, and real numbers. In the old days. advertising agencies were the eggs in the metaphor of the client breakfast; today they’re the bacon. Agencies desirous of growth and a great reputation realise that they need to get committed to real-world business results. So, a big deal for clients, when they look to appoint an agency, is a demonstrable and proven ability to deliver the numbers.
Yes, there was a time when ‘promise, big promise’ was the soul of advertising, and influenced the way brands and advertisers connected. But that’s changed, forever. The soul of advertising today, and what’s influencing the tension between clients and agencies, is: “delivery, big delivery”. This new mantra is being executed by data-driven decisions and agency/client relationships, defined by a virtuous cycle that sees this relationship getting better all the time for the benefit of that brand’s customer.
Technology, the requirement for the right intellectual property to apply that technology innovatively, and the need to work closely with the client, is driving the need for a soup-to-nuts lead agency. There was a time when brands would have multiple partners because of growing specialisations. So a big brand would have a traditional agency, a media house, a digital agency and/or a technology hot shop and one or two other relationships, but the drive for integration is rationalising these relationships. Clients want to work with a player who can help manage the fragmentation and rather offer an end-to-end service, and so we’re seeing the rise of a single or lead advertising partner in agency-brand relationships.
Sweating the creative
The cost of creative is another issue that’s big with clients, and rightly so. Creative work is financially lucrative for advertising agencies, but doesn’t always deliver the best benefit for a business. What this means is that, if you’re a big house of brands and you are spending 50% of your multimillion rand budget on creative, and the remaining 50% on media and the like, you’re wasting a hell of a lot of money. The agency’s winning because it is making good dosh, but how’s that improving the business bottom line? The new relationship between agencies and brands is about smart creative that works harder, faster, and that does more. It is about sweating the creative.
Finally, because of how quickly technology changes and disrupts business, and even becomes obsolete, training is a big part of the relationship. So we spend time training our clients, or our clients invest in training on specific core competencies. For example, we have a client in the FMCG sector that’s investing a fair amount to ensure that all its marketing and business managers understand mobile. Which makes sense — how can you connect to a mass market in SA or Africa without knowing everything there is to know about mobile?
Relationships between agencies and brands have changed radically, and today getting the best out of this marriage means forgoing a quick love affair in favour of an arranged marriage that yields increased long-term benefits. It is not an emotional decision; it is a logical, careful and strategic one.
With more than 15 years’ experience in the industry, Jacques Burger (@) has lead some of the most-prestigious accounts in SA, such as VW and SABMiller. As Ogilvy Cape Group MD, he successfully lead an integrated team which included digital, direct, design and PR. As The Campaign Palace Group CEO in Australia, he oversaw internationally recognised and awarded communications for brands such as Target, Panasonic and Westpac (Australia’s biggest banking group) and was named one of the Top 40 young marketers in the region. Since October 2010, when he founded the M&C Saatchi Abel JHB group, Jacques has lead the growth of the office from startup to over 100 staff members today, handling blue chip accounts such as Edgars, Nedbank and Simba Pepsico.
I was once told the story of an agency that had to fly on a Friday from New York City to some industrial city in the Midwest of the US to go and pitch on a piece of business. On the way back to NYC from the pitch meeting, the client called the agency to ask if they could set up a conference call to discuss next steps in the pitch process for the Monday morning — and the client asked that the full agency team be present for the call. On the Monday morning, with the pitch team huddled in an agency boardroom waiting for the call, the receptionist called to announce that the client was in fact in the reception area of the agency; they had arrived unannounced with a case of champagne, having flown in earlier that morning, to come and surprise the agency at their offices with the good news that they had won the account.
In stark contrast to this are the many stories overheard this year, where news of a pitch win comes in the form of an email from the procurement department. Not that I have anything against procurement departments — they have an important role to play in business — I just think these two stories talk powerfully to what has gone wrong in many of the modern day agency/client relationships.
Three key tenets
Don’t get me wrong; I don’t think great business relationships are always about partnership and long evenings swaying side to side next to each other around a campfire. As an industry, we need to become more comfortable with a relationship structured around that of a professional, trusted supplier — such as a doctor/patient or lawyer/client relationship — and free ourselves up from a sometimes unnecessary burden of what it really means to be partners. But, whether you are looking for a partner or trusted supplier, I do believe that there are three key tenets in building powerful business relationships that are often undervalued or ignored in some of the pitch processes of today.
The first tenet is honesty. We all know that the truth may be uncomfortable, that it may challenge, that it may reveal hidden agendas, but both parties have to be bold enough to embrace honesty as part of the process: why are we looking for a new agency? Why is the current agency not working? Have we tried to make it work — really tried? Is what we want in an agency, and the reality of what the daily requirements of our business demand, different? Is it just about saving money? Why are we inviting the incumbent to pitch when we have no intention of awarding them the account again – and, in fact, if that were an option, why are we pitching at all?
Why do we want this client? Is it just for the money? Can we deliver brilliantly on what this client is asking for? Do we want to work with this client — can we feel the chemistry? Why are they looking for a new agency and how can we make it work when the previous agency couldn’t? What are they looking for but, also, what are we looking for?
These are all important questions that both parties need to be able to honestly answer, which, no doubt, will lead to fewer pitches and less opportunity, but many more long-term, mutually beneficial relationships. Butm in the rush of pitch fever and the many mixed agendas, the opportunity to honestly assess fit is missed.
Agency vs idea
The second tenet to consider when looking for a perfect agency/client match has to be distinguishing between looking for an agency vs just looking for an idea. Many pitches today rely heavily upon the principle that the agency with the best idea on the day wins. Of course, these ideas are developed in isolation of the client debate and collaboration that usually accompany the birth of so many brilliant ideas, but one could argue that all agencies in the pitch are subjected to this same flaw.
Much more significant, though, is that one idea on the day, by one agency, has the power to overshadow a lifetime of brilliant creative solutions delivered to happy clients by another agency. In the end, the chemistry, the track record, the proven ability to solve business challenges can surely not be made less important than one idea, off one brief, on the day? If one is looking for a great idea, then sure, ask five agencies to show you what they could do but, if you are looking for a great agency, then consider an approach that perhaps better balances the allure of a great idea on the day with a proven track record and deep expertise (do you even need that idea on the day, I might dare ask?).
The third tenet is about chemistry. Scorecards and spreadsheets cannot tell you whether a relationship will last, or bring enjoyment. As the world becomes more transactional and cut-throat, there seems to be less and less time allocated to finding inspiration, like-mindedness, shared values, great energy and trust. The clients who are adored by their agencies are the ones that benefit most from their brilliance; these are the clients who enjoy ideas and smarts beyond the transactional requirements of the relationship. Actually liking the person whom you do business with means that you will do more for them, more often; it also means that you take your commitment to them much more seriously. I can only imagine how positively the agency orientated around that Midwestern US client who flew all the way to their offices to tell them that they had won the pitch.
Pitches are about the start of the relationship but, with many of them not having great endings (as proven by the number of pitches we’ve seen this year), perhaps it’s time that we look at how we start a little bit differently. Who knows? We might just all like how it ends a whole lot more!
Launched in 2016, “The Big Q” is a monthly column on MarkLives in which we ask key industry execs for their thoughts on relevant issues facing the ad industry. If you’d like to be part of our pool of potential panellists, please contact editor Herman Manson via email (2mark at marklives dot com) or Twitter (@marklives). Suggestions for questions are also welcomed.