In a recent Ad Age article, some agencies cried foul with marketer led reviews. That's absurd. There's nothing "foul" about a marketer led review because even when a consultant is involved, the advertiser often leads the review while the consultant sets the guidelines, develops the process and establishes the appropriate value based parameters to select a winner from unique knowledge, understanding and experience with agency/advertiser relationships. What is difficult to deal with, however, is the way some advertisers, as well as some consultants, choose to conduct a review and the role procurement and their marketing colleague play in the process.
In another article, a few weeks ago, a reporter from Ad Age quoted a consultant as saying "it's not about savings" whereby the consultant put the emphasis on digital growth and expertise. Clearly there's a need for digital knowledge and integration in most marketing plans. But it is also very definitely about savings that can be produced in the right way. Why else would procurement have a front row seat at the table? The consultant had it wrong and the reporter brought the article to the wrong conclusion.
There certainly are reviews that are not conducted properly to create, develop and sustain an efficient and enduring relationship between the advertiser and the agency. And some of the quotes from agencies do support the benefit of a knowledgeable and experienced consultant.
Take a look at savings. There are several ways for savings to be achieved where the advertiser will receive full benefit. Agency operating efficiency is a key element to any review. What resources are brought to the client's business? How does the staffing plan match the necessary scope of work? How are salaries, overhead and profit benchmarked? What monitoring procedures are in place to measure media effectiveness and efficiency? What metrics are used to establish ROI? And how is the agency being compensated?
Let's get back to agencies cry foul to marketer led reviews for a minute. First of all, agency work is not a commodity. They are not all the same. You would think so when you look at the way agencies have been compensated over the years, however. It's an industry where agency compensation has gone down, not up (unlike lawyers, doctors or accountant fees). It's an industry where agencies are all pretty much compensated in the same way whether the work is good, bad or indifferent. What's wrong with this picture?
Agency reviews certainly do need improvement. Response time to prepare an RFI should be reasonable. Not only for the agency to show good work, but for both parties to understand the best way to work together going forward. The RFI should pertain specifically to the client's business with relevant questions and answers. Not a data base encyclopedia. Transparency is always necessary. It leads to trust.
Should an agency be paid for its work during a review? Here's my take on it. If a client will not pay for any work it should be known upfront and the agency needs to make a decision. Simple as that. Also, I don't necessarily believe an agency should be paid for time spent on a review. But I do believe that it is not unreasonable for a client to pay for a creative asset that could be used going forward if the agency is not chosen. And if an incumbent is not a serious consideration in a review, don't have the agency continue to think so.
Finally, let me say that agency compensation needs further review. Commission or fee structures should be more thoroughly evaluated. Media budget is a consideration. Media type is a consideration. Resources applied are a consideration. Scope of work is a consideration. Performance is a consideration. Labor is not an outcome, it is an output. Value and accountability are important measures to help guide the compensation arrangement which may create new incentives. Maybe the ANA and the 4A's can work this one out too.
Mike Drexler is currently a Managing Partner at Drexler/Fajen & Partners, a media agency review firm that works with advertisers to evaluate their agencies’ performance. He can be reached at firstname.lastname@example.org.
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