by Jerry Mpufane (@JerryMpufane) Clients have a responsibility to ensure that the ad industry thrives and succeeds. A prosperous advertising industry is good for brands. This is inherent in the nature of the industry’s services to clients, being that of stimulating demand for products and services.
Demand creation is good for the overall economy, and we all know that business thrives in a growing economy where customer spending stays on the increase.
So, the industry needs clients. And the clients need the ad industry. Let’s all be friends here, ok?
The client’s obligation to the agency
For me, it’s about how you start.
The agency-selection process is necessary in order to allow new brands entering the market to find an agency that will be the right fit (note that I make use of the word new , because I believe that both clients and agencies must always aim toward establishing relationships for the long term).
The manner in which the client conducts itself during the pitch process is important, and it contributes towards whether we can achieve the desired long-term partnerships.
Ridiculous
I hold the view that it is ridiculous for both clients and agencies to spend upwards of six months of a trading year involved in a pitch process.
This time includes the initial request for proposals, chemistry sessions, briefing meetings, market research, strategy development, campaign development and presentations. It’s uncalled for! We have all gone berserk by the time the direct and time costs of pitching have been quantified, let alone the time lost by both client and agency away from the real business of selling products and services.
Of course, the client reserves the right to review its agency relationships where there is patent non-delivery.
Costs of producing pitches
In many cases, the costs of producing a full strategic creative pitch means hundreds of thousands of rands in time and direct costs to the numerous agencies which compete for a short-term contract. Many agencies fail to return profits from those relationships of less than three years that were born out of expensive competitive pitches.
Let’s not forget that clients also commit valuable time and resource to pitches. It is also in the client’s interests to reduce the time spent on a prolonged pitch process that often asks the wrong questions. Also, it can take up to a year to fully integrate an agency into the client IP and way of working before the relationship can begin to deliver meaningful results.
Ours is a people’s business. We all want to work with people we like, people we know and people we trust to deliver commercial returns.
Many chief marketing officers (CMOs) agree that, once agency credentials have been reviewed, followed by a structured chemistry session, it makes sense to brief their new agency inside a secure and confidential relationship. In addition, many CMOs agree that the best campaigns are delivered via a collaborative client-agency process, vs some magical campaign reveal with no client involvement.
Towards long-term partnerships
A quick survey of the market leaders across various sectors of the economy shows that longer-term client agency relationships make business sense.
The UK’s Institute of Practitioners in Advertising (IPA) actively promotes an industry where there are less pitches and more partnerships. In addition, doing this in partnership with CMOs, the IPA is driving the industry towards less one-dimensional agency-client relationships but more diverse skill sets in order to promote more through-the-line thinking. That’s a lesson for all of us.
Fantastic client-agency relationships are characterised by the following:
- A clear role definition, where the client will master the core of its own business while the agency delivers mastery in brand communication;
- Great clients pay their agencies well, in spite of any prevailing difficult trading conditions, in the same way that clients expect their customers to pay a market-related price for their products and services;
- Relationships of partnership have no end in mind. If anything, there exists a genuine interest from both client and agency to establish a lasting, and winning, existence. As they say, “Start as we mean to go on.”
- Agencies have a genuine interest in contributing to the client’s business success and, in return, clients have an interest in whether its agency is profitable — more so because clients insist upon seeing a healthy set of financials when selecting or maintaining an agency relationship.
- Client-agency brand teams grow together because there’s an ongoing professional development programme in place that is actively pursued by the CMO and agency CEO.
- Client-agency brand teams have fun together. They run co-funded leisure activities that are hosted on an alternate basis.
As agency leaders, we have the responsibility to run fantastic businesses for all of our stakeholders, including but not limited to our staff and our clients. But we cannot do it alone.
Clients must come to the party
Our clients must live up to their own sets of values, and commit to ethical and fair business practice. While clients have a right to expect high standards from their agencies, the CMOs, however equally have a responsibility to take ownership of their agencies’ overall wellbeing.
It is true that better relationships lead to better work. The client which goes the extra mile for its agency cultivates an agency which will go the extra mile for the client. And, of course, it goes without saying that an inspired agency team will produce inspired campaigns.
Great brands are behind the top 100 shares across many stock exchanges, showing that long-term brand building does deliver commercial success.
Trust
A study conducted by the IPA shows a close to 40% gap between the best and the worst for creative output, driven by whether there exists a good client-agency relationship. And trust was the word most used to describe win-win client agency relationships.
Better client-agency relationships correlate with better work. And clients must come to the party, literally and figuratively!
Jerry Mpufane has executive experience in both ad agency and client organisations. He’s only got one goal in life, which is to be an inspiring leader. Jerry is currently group MD, Gauteng of M&C Saatchi Abel. His monthly column on MarkLives, “The Business of Business”, focuses on what it takes to run a great AND sustainable ad agency.
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