The Vision Thing: What It Means for Marketers

Itamp8217s no secret that the relationship between advertisers and their agencies has deteriorated This has occurred for many reasons including service staffing alignment with client goals and objectives and of course compensation But transparency has now become the breaking point of trust between the partiesMany attempts have been made to correct several of these issues but invariably they keep coming up again and again because no one really has been able to make radical changes necessary to the system The system is broken because it continues to rely heavily on the status quo and on certain new methods that donamp8217t always work for both parties But the way the system is going now itamp8217s a slow crippling death anywayThe future really does require major changes in the way we think about the advertiser and agency relationship For example Is the agency truly an agent in all respects for the client or a principal when acting as a reseller of inventory Is the client really first priority or does agency business come first amp160When clients do come first it really does elevate agency business amp160Are compensation methods geared to meet revenue and profit goals for the agency even if client objectives are not met and value is not received amp160And if the agency does come up short on their financial goals are undisclosed methods used to leverage client income to make up the difference Has transparency gone far enoughThese concerns must be resolved if we are to restore client confidenceThere is also another transformation taking place that is destined to disrupt the status quo Precipitated by the digital world who should control the trading desk and how should private first party data be disseminated Is there an element of mistrust that agencies aggregate first party data across clients to build their own database amp160Should ad tech companies work directly with clients and who should handle Data Management Platforms Will the agency continue to be the primary client strategist and a full partner or be relegated to data analytics or negotiating media pricing These things are being evaluated now And they are adding to a disconnect of the clientagency partnershipA model thatamp8217s been considered for an agency and client to operate in a real partnership is for compensation to be implemented on a pay for performance basis That may be a legitimate argument although itamp8217s often been difficult to implement because there are so many marketing and creative variables to pinpoint performance leading directly to sales results And now with more digital players involved in many aspects of every campaign effort and more project based assignments offered itamp8217s even more demanding to draw specific correlations The idea that a pay for performance partnership can be created to reward both the client and the agency by achieving certain performance goals is possible by setting reasonable goals agreed upon in advance by all parties In other words a model that attempts to establish a proportional reward that allows agencies to profit even more from their performance when clients succeedAgencies raise a good point when they advocate the strength of advertising investmentsamp160 But if clients are encouraged to spend more and the agency makes more money on commission as the budget goes up but only rarely adds to staff even when needed thatamp8217s unreasonable And when advertising budgets are reduced and agencies cut back staff or put juniors on the business to keep the margins up that doesnamp8217t seem like the right way to have a strong enduring client relationshipOne of the most fervent arguments in favor of feebased remuneration has been that scope of work for a client is the determining factor for judging compensation That sounds reasonable and it certainly is a factor But workload is not necessarily related to business outcomes And any additional incentive bonus that may be offered based on performance metrics doesnamp8217t always go directly to the staffers on the account Oftentimes it goes to agency corporate overhead instead That doesnamp8217t seem entirely fair either and probably deflates employee moralMy vision is to see a compensation model that works best for all parties Not only commission or fees but KPIs key performance indicators including hard and soft measures tied to business results amp160A model directed to client success and business improvement that also reveals where and how the money is managed and how it contributes to smarter strategic and innovative thinking amp160And yes one that also reduces waste and maximizes efficiency at all levels operationally in staffing and with media pricing It can be done and itamp8217s not just imaginedThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillagecomMyersBizNet management or associated bloggersamp160

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The Vision Thing: What It Means for Marketers

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Mike Drexler

AARP and the Ad Council Encourage People in Their “Pretirement” Years to Take Key Steps Toward Saving - Ad Council InSites

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The Vision Thing: What It Means for Marketers

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Mike Drexler

AARP and the Ad Council Encourage People in Their “Pretirement” Years to Take Key Steps Toward Saving - Ad Council InSites

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