Client/agency relationships

I read in the WSJ a couple days ago that agency/client relationships are becoming harder to sustain… not surprising as marketers are under increasing pressure to drive results. In the good old days, clients were happy with increases on brand awareness and preference metrics. But given that the average tenure of CMOs at top-branded companies is only 23 months, there’s an intense pressure to demonstrate results – fast – and often at the expense of the brand and its customers. 

Many times, a new CMO sends the current advertising agency into an unproductive frenzy when they, upon joining a new company, immediately question their predecessor’s strategy. If the agency isn’t immediately fired (which often happens), an incredible amount of time is spent on the re-education of the new CMO — oftentimes as much as three months. Also, because advertising campaigns are tangible, new CMOs have a tendency to quickly look to the creative for a change in direction. Clearly, these knee-jerk course corrections, designed to demonstrate that the CMO is making an impact, are not only expensive propositions, but, more importantly, force the consumer to accept yet another brand positioning.

Ad agencies have to shift their thinking from pure creative to advertising that moves products. If agencies don’t have senior staff that can speak C-level lingo and understand how to tie creative execution to business results, we’ll see more and more of agency/client relationships go sour. On the other hand, clients often fallaciously think that advertising is (or could be) a magic bullet. They no longer have the patience to stick with a campaign (or an agency) for the long haul. And lastly, most aren’t empowered to make the kind of customer-experience decisions that would actually move the revenue needle. So they lump all these expectations onto their agencies and expect them to work a short-term miracle. Clients and agencies both can take steps towards improving their partnerships to be more win-win.

Comments

[Internet Marketing Company]

Client/agency relationships are not easy. After 11 years in the internet advertising business, I am rarely shocked by anything a client says or does. There are so many forces at work in this type of relationship, it is nearly impossible to figure out how to make these relationships work every time. At Endai Worldwide, we decided many years ago that we would stay focused on three simple principals: ask "what's the value", do "whatever it takes to reach the goal" and "trust- our most precious commodity".

Stay focused on how you add value to the relationship. Amazingly when you are adding value and generating revenue, clients love you.

[Christina Gunn]

On the client end, I have to say that agencies tend to forget that their clients need to be profitable. So when their clients are not seeing bottom line results, they cannot continue to afford alloacting dollars that are not proven. Perhaps the agencies need to come up with better ways to demonstrate short terms wins rather than complaining their clients don't understand the long term impact and the cost of change in direction. Sure we get it takes investment in the long run - but there has to be some tangible gains along the way.

[Ted Heighington]

Ad agencies forget they are in the business development business and not the creative business! Too often agencies do not connect their clients' operating strategies to their creative recommendations, nor are their concept recommendations fee payments linked to resulting sales performance like those of a client Marketing Manager. Further eroding the confidence and longevity of agency relationships is their reckless recruitment of young, affable and attractive personnel who have very little or non-existent business depth or breadth. Compounding client relationship stress is the 'bait and switch' staffing strategy, where the senior partners pitch the account and then switch much of the daily servicing to 'hand-holding' juniors. If agencies want to be really clever and creative, and win 'awards of respect' from their clients, they need to bulk up their senior ranks and put them on the client front line more often.

[Pepita]

Very insightful post and it is good to have my Feedreader filled by your posts once again!

To this post I would like to add two of my ThinkingSparks:
1. What are the consequences if a sequence of CMO's and their respective new brand positionings for the internal branding perspective? I envision this zigzagging troupe of employees....
2. Related to that: With the employee being so important to the brand are ad agencies the ones to hire when building a brand? If they do not even have the senior staff for their conventional business, how can they have the insights to building a brand through employees?

[Daniel R]

Jennifer,

Great heads-up on the WSJ article.

Speaking with online marketers at the Web 2.0 Expo in San Francisco, this trend is all across the line with many client-agency relationship.

I think that that the ability to do analytics/ROI online has provided a false sense of the ability to conduct complete tracking and confusing short-term ROI against long-term ROI.

Agencies need to go a long way on trying to persuade/educate the client at all levels and to ensure that the agency understands the pressure coming to C-level folks from shareholders or other financial stakeholders.