Masterclass Notes: Why scope of work is essential for marketers
by Johanna McDowell (@jomcdowell) One of the most important discussions in our first Masterclass for 2016 next week will be regarding the practicalities of the contract between a marketer and an agency, with most marketers having had little experience in this area. The masterclass will demonstrate the importance of the scope of work — an aspect more important in many ways than the hourly rates discussions that agencies and marketing folk get locked into, often with disappointing consequences for both parties.
Why client/agency relationships break down is not news to many agencies and clients. Everyone knows what they should be doing but implementation, in practice, is not easy. And also knowing how to raise a contentious issue is difficult — often with emotional upheaval in the process.
The missing link
Often, we are finding, the missing link is the lack of a scope of work. A recent poll in the UK by our partners, the AAR Group, revealed that 65% of agencies did not have a scope of work from their clients for 2016. So, while agencies may well have a resource plan in place per the contract, it is impossible to know if this is adequate or overservicing a client without a decent scope of work in place.
A scope of work is not difficult to do. It is the broad plan for the next 12 months of what is going to happen in order to meet client objectives.
Some agencies are telling us that the days of a 12-month scope of work are over as marketers often do not know what will happen next in their companies. We are not convinced that this is true. Every business has to have a plan, otherwise it will fail. So, no matter how vague a scope of work might be, we believe it is possible to have an outline in place and to gradually populate this over a 12-month period.
Why is the scope of work important?
Time and resource planning
Agencies need to plan their time and resources. If they can see that client is going to be very active over a certain period in the year, they can ensure that they have sufficient staff and resources in place to meet the needs. This might affect leave plans, as well as supplier availability, and the sooner this can be known, the better.
From a media perspective, the media agency will plan campaigns according to the scope of work and will negotiate rates with the media accordingly; early booking discounts add huge value to the media schedule. The media agency will also make sure that its creative partners are fully informed of deadlines so that no insertions in the media are missed.
Briefing times for agencies can also be booked into diaries and scheduled along with reverts. Marketers’ travel schedules are often exhausting, and agencies need to know how to fit in with these, as well as deliver the scope of work on time and on budget. Without a decent scope of work, the danger is that agencies could end up over-servicing in the wrong months and using up all the budget available before the need for a major campaign might arise. Contrary to some popular beliefs, clients do not have unlimited funds — going over budget is therefore not an option for marketers.
I would like to see an end to time-based retainers in contracts, and a return to output-and outcome-based contracts which will reward agencies on results, rather than upon hours spent by various agency team members on a marketer’s business.
Modern marketing is moving towards this approach and we believe that agencies are capable of shifting to this method of remuneration, which will see marketers being much more approachable and amenable.
Johanna McDowell (@jomcdowell) is managing director of the Independent Agency Search and Selection Company (IAS), and she is one of the few experts driving this mediation and advisory service in SA and globally. Currently she is running the IAS Marketers Masterclass, a programme consisting of masterclasses held in Cape Town and in Johannesburg. Twice a year she attends AdForum Worldwide Summits.
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