Masterclass Notes: Evolving client-agency models
by Johanna McDowell (@jomcdowell) Three senior marketers from RCL Foods, Diageo* and Absa attended our session last month, acting as our panel to discuss ideal agency models and best practice with more than 30 agencies — an issue that agencies globally are grappling with, particularly in this era of low growth and pressure on margins. The marketers were keen to engage with agency leaders on this, many of whom were in the room as they, too, are looking for innovation in this particular area.
These are some of the key points that came up:
1. What is a partnership? Agencies talk about wanting to be considered as partners for their clients. For a marketer, what does this mean?
For an agency to be considered as a partner, it needs to be the external expert. What a marketer wants is for the agency to understand the marketer’s business, as well as to really know its own agency’s capabilities. Marketers don’t want agencies to stretch their capabilities so that they can provide everything that a marketer desires — they want agencies to be experts in their particular areas and not “jack of all trades, master of none”.
2. Can a multi-agency scenario work? If there are several agencies in a marketer’s ecosystem, how can this work well?
There must be good contracts, say the marketers, and these contracts must clearly spell out what the agency workstreams are for each discipline. The marketers also want to know that the agencies will collaborate well, and be willing to do so with those clear guidelines and transparency.
Retainer vs projects, sustainability and cost-management. Always the hottest of topics, there was a great deal of discussion in this particular section of the masterclass. Agencies commented that clients are asking for more and more, and yet do not seem to want to pay more. The marketers were surprised at some of the comments as it seems that the agencies are not prepared to speak up with their clients and find ways to ensure that there’s enough payment and enough budget and that expectations are properly managed by both parties.
The importance of a thorough brief came up time and time again.
4. ZBB and its emergence in the past three years
Zero-based budgeting (ZBB) has meant that, every year, a marketer starts from zero and builds up the business case for the marketing budget. The days of a standard, year-on-year increase, are over. This means that results measurements and tangible results are more and more important to include in any proposals and implementation.
5. ‘In-housing’ services vs agency
The marketers understood that there’s a need and requirement for certain things to be done in house; both RCL Foods and Absa have in-house studios which take care of non-strategic matters, such as packaging changes where legal wording might need to be adapted. These internal studios are not designed to replace agencies in any way but to rather speed up minor changes that might be needed, and save time and costs. It’s very important that agencies should partner with their clients’ internal studios.
6. The ideal agency model — how do we get there?
- Marketers need agencies to help the marketing community raise its skills and become more mature
- Among younger and less-experienced marketers, there isn’t much respect for agencies and the consensus was that this is probably due to lack of real knowledge and maturity
- Agencies need to raise their sense of self-respect
- Agencies are invited to recommend to the marketing community how things should be financially, instead of believing that they’re imprisoned in an outdated, resource-based model of financing
- Only agencies can decide on the ideal model — marketers can’t do this for agencies
- Agencies must demand written briefs, along with proper scope of work, from their clients
In summary, as marketers are being challenged by their own organisations to think about brands as their own businesses, marketers have a different approach to their agencies; therefore, agencies need to be able to proactively respond to this.
*Now an independent consultant.
Johanna McDowell (@jomcdowell) is MD of the Independent Agency Search and Selection Company (IAS), which is partnered with the AAR Group in the UK. Johanna is one of the few experts driving this mediation and advisory service in SA and globally. She also runs the IAS Marketers Masterclass, a programme consisting of masterclasses held in Cape Town and in Johannesburg. Twice a year she attends AdForum Worldwide Summits.