Archive for the ‘Agencies’ Category

I’ve been thinking a lot about “partnerships” lately. We tend to throw that word around freely, and I’d posit that it has even become a buzz word among agencies and clients. But partnership IS a powerful concept and in today’s business climate of fragmentation and complexity, partnerships are a key component to success for any business. The client/agency relationship is a great example of a partnership, but often it becomes a dysfunctional relationship for many reasons.

I’ve tried to narrow down the top 5 attributes to a successful partnership.

  1. Common Goals
    A partnership is predicated on both parties working towards a common goal. That said, see point #2. If both parties do not benefit appropriately, a common goal does not a partnership make.  
  2. Both Parties Benefit
    While many of us can claim that we are passionate about what we do for a living, we are all ultimately in business to make a profit – and to maximize that profit. A successful partnership is one where both parties feel that they are getting a fair shake on the financial side. If this is not the case, the partnership is destined for failure.
  3. Third Parties in the Ecosystem Benefit
    This point may be subjective, but the output of a partnership usually must also benefit third parties such as customers, supply chain participants, or other parties of influence, in order for it to satisfy points #1 and #2.
  4. The Whole is Greater Than The Sum of its Parts
    So many successful and productive partnerships operate based on the collaborative efforts of two (or more) parties becoming a force greater than the individual efforts of eachhis is a win all around. This point is not relavant for all relationship-types – for example, without some level of vendor-customer relationship, the individual parts of the client/agency relationship would have no relaqtion to one another in the marketplace. However, when clients and agencies work closely together, the whole is indeed greater than the sum of its parts.
  5. Internal Champions Exist on Both Sides
    Partnerships don’t just happen. Like any relationship, personal or professional, relationships take work. Embrace the challenges that come with the opportunities. A good partnership is well worth the effort – ask any happily married couple.

Any good relationship is secured more by intentions and the people behind the the handshake than by contracts. Of course, don’t minimize the importance of handling your business either. We are in the age of the partnership. Whether explicit or implicit, partnerships are part of today’s business environment. Take some time to analyze your relationships and determine whether they exhibit the five points above. I they don’t, it’s time to revisit your approach to business relationships in general.

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The main objective of the Client / Agency Therapy series is to help address some of the fundamental causes behind the changing client-agency relationship, and to offer some insight and guidance that can facilitate more productive relationships. Even at digital agencies, most brand / agency relationships are being challenged by factors both internally within the agency organization as well as externally based on increased client demand and expectations, and changing market conditions.

The symptoms of many less-than-stellar agency relationships are often misconstrued as “the agency model is broken”, which is a broad stereotype statement and in many cases a misnomer – albeit a great headline. Granted, the agency model is being challenged. Granted some agencies are just broken – forget the model. But there are some great agencies out there as well.

However … The “big idea” is rarely big and impactful. The media landscape has become fragmented, and breaking through the clutter has become difficult. Digital channels are evolving and social actions have made discoverability and sharability mandatory strategies. Technology has disintermediated certain agency services. Influence, engagement and sentiment have replaced more subtle branding measures of the not too distant past. The shades of gray have multiplied.

The “agency model” usually being referred to as broken, has BEEN broken for a long time – one where a full service agency builds a strategy from the brand outwards. But that madmen model has also already been replaced, for years. So what model is broken now?

The new agency model is not per se broken – dollar for dollar it is just a lot harder to influence consumers than ever before. The range of agencies is so vast and there’s no way to bucket them all together. They range from  ‘cut them some slack’ to ‘you gotta be freakin’ kidding me’.

I put together a list of what I feel are the top 10 agency challenges and/or opportunities that hopefully shed a little more realistic light and are food for thought on the complex situation.

1) People Make The World Go ‘Round
Many agencies are trying to change their cultural DNA in order to ride the next wave of marketing and consumer influence. Likewise, many new and specialized agencies have emerged in the last handful of years to fill the perceived void of “the agency of the future”. Ultimately an agency’s proficiency is based on one simple thing –  the caliber of their people. Passion can only get you so far. Technology, process, and resources all mean nothing when the weakest link is the team. Let me not cut clients any slack here either –  the client team needs to own up to the responsibility of being collaborative with their agencies, including owning some of the strategy. Your brand teams must be knowledgeable enough about their own businesses and the market opportunities at-large, in order to work closely with your agencies. Don’t just be the squeaky wheel to get the grease, but rather become a valuable voice in the collaborative effort to grow your business. It IS much harder work than ever before.

2) Agencies Get The Short End of the Stick
Agencies today struggle with several key organizational challenges, all requiring executive level commitment to step outside their comfort zone and facilitate change. Clients do need to recognize that agencies are marginalized every day, remembered only for what they did yesterday, and are expected to do more with less and to often perform against unrealistic expectations. This brings us to a significant organizational challenge – fostering a culture of realistic aspiration and breaking the mold of “saying yes and figuring out how to do it later”. While a noble intention to want to always please a client, agencies set their teams up for failure by over-promising and under-delivering. The art has become refined to the point that sometimes the agencies don’t even realize that they are doing it. This is a symptom of trickle down management styles – sometimes trickling down from way up top, and other times from supervisors. Often this stems from the fear of losing a client; the fear of a supervisor losing their job; the fear of an account person having an uncomfortable conversation with a client about unrealistic goals. Breaking the cycle of fear and being honest with clients can go a long way, particularly when the relationship commences with that attitude. If being honest with a client means that you lose the client – you should be happy to lose that client.

3) Mo Money, Mo Problems
Margins begin eroding the moment a new client engages an agency. Most agencies are always on the hunt for new work, and often pull their best and brightest minds into the process. It’s usually not the day-to-day teams, but some of the brain-trust that you would rather have supporting your brand’s account team, rather than impressing a new potential client. Your day-to-day team isn’t immune from the process either. Sometimes account managers or planners get shifted to new accounts based on specific experience. Other times staff is shifted because other clients are simply more profitable. Unless you’re one of the top few clients of an agency, you would have experienced this several times by now (which means most clients). This doesn’t necessarily negatively affect account performance, but needs to be meticulous managed and monitored by the internal brand team. Remember, the agency team working on your account will make or break performance.

4) Fostering Business Savvy
This is not an agency-only issue. Both agency and client teams can benefit from teammates that are a little more business savvy. We need to ensure that we are fostering a culture that stops to take the blinders off, and takes breathers between tactical executions to think about how our efforts truly affect our businesses, looks at the bigger picture from time to time and cares about how to make a business grow, not just how to complete a list of tasks. Yes – focus on creating efficiencies and increasing output, but the best work comes when people understand the real world dynamics that impact the spreadsheets that they work with day-in and day-out.

5) Embracing the Iteration Generation
We are surrounded by data. Each year the applications of marketing data become more sophisticated – some more actionable than others. Data should not be thrown around for data-sake. We have the ability to iterate based on actionable key learnings. Every brand should have a measurement plan that includes cycles of iteration that result from actionable analytics. Agencies need to staff key individuals to lead the charge, but also foster an environment where all team members understand how to craft the right questions that data can seek answers to. Clients also need to collaborate in this process.

6) Great Creative is a Rare Commodity
Can you name a handful of recent memorable online ad campaigns? With so much creative talent in the world, you’d think that we would have re-emerged in a creative renaissance by now. Sure – there are often limitations from a budget perspective, and digital media efficiency and the costs of doing something out-of-the-proverbial-box can be staggering. The industry gets that and is slowly but surely changing to adopt new and more impactful creative formats. We’ll get there. But the lack of proactive creative innovation is rampant.

7) Social Media and Engagement Agencies Are Darlings
The new kids on the block are always the coolest. I remember the early years of digital when my team would accompany the traditional media or agency team to a client meeting, and it was a love fest. The client loved the digital guys (and gals) – everything about us – our ideas, our passion, our energy, even the way we dressed. It was new and exciting, it represented change and hope and the future. Well, the social media agencies are today’s darlings. But remember – social media is not a replacement of traditional media, or digital media for that matter. It is an additive component of a well rounded consumer engagement and communications plan. Understand the benefits of social actions – sharing and discoverability – this is huge for brands. Social media falls under the larger bucket of consumer engagement. It’s important…but right now it’s also the shiny object in the room. Clients need to be reigned in a little and strategies need to be practical in addition to aspirational. Traditional agencies (and even many digital agencies) took too long to embrace social media and an entire industry to emerged. These agencies are already being acquired and merged into bigger shops. Today, agencies need to be able to speak to their ability to engage consumers, period.

8 ) Mobile Is Here, Really it Is
We’ve been joking for year about how “next year will be the year of mobile, again”. Well guess what folks, it snuck up and bit many of you in the ass while you weren’t looking. Mobile is such a powerful platform because it is a digital channel in a real world environment. The volume of mobile shopping, reviews, scanning and comparative shopping  in retail locations this past holiday season blew retailers minds, and most did not take advantage of the behavior. I can’t wait until holiday 2011. Mobile strategy will play a significantly bigger role. Mobile payments are coming soon. Check out the Starbucks mobile card app, now rolling out nationally after tests in Seattle and New York. This is just the tip of the iceberg of the future.

9) Money Matters
There was talk for sometime about how agencies need to change their compensation models to some type of pay for performance structure. Agencies acted like politicians and when facing the press claimed that they would love such an opportunity, while in actuality they loathed being marginalized and expected to be paid based on so many factors out of their control. Why isn’t pay for performance the norm? Because it is simply unrealistic to ask an entity with intellectual property (in theory) to be paid this way. Agencies are running businesses. Like any industry, some are better than others. Clients must perform a more rigorous due diligence when selecting agency partners to ensure that they are working with the right ones – and then pay them for the work that they do. Good agencies that help further clients’ businesses deserve the big bucks for their work. Short changing agencies only leads to lackluster work that lack passion and

10) Thought Leadership and Trend Spotting
Clients hire agencies for multiple reasons, but one vital component of being  a valuable business partner is providing an ear to the ground and an eye towards the future. Agencies must provide thought leadership, spot trends and memes as they are happening, separate the hype from reality, and identify the true opportunities amidst a world of fragmented distraction. Specialized agencies must be experts at what they do, they must live, eat , breathe and sleep their specialty and help their clients stay one step ahead of their competition and consumer behavioral shifts. But they must also have a general understanding of the interrelationship between what they do and the overall marketing communication strategy employed by their clients, and even more importantly – how what they do fits into the evolving life of the consumer. While execs often have this understand – you can be sure that the day-to-day team working on your business does not. A narrow focus is great tactically. An amalgam of specialists has become the solution to the “broken agency model”. But there is usually a missing component. But client must ensure that there is a cohesive overarching strategy and dissemination of learnings and and thought leadership across all the specialists in their roster into a bigger picture. Otherwise you are left looking through multiple narrow lenses and missing the forest for the trees.

When looking up the definition of generalist vs specialist, relating to animal species, the crux of the definition comes down to survival and thriving of the species, not benefit to the environment.

A generalist [species] is able to thrive in a wide variety of environmental conditions and can make use of a variety of different resources. A specialist [species] can only thrive in a narrow range of environmental conditions. Most [organisms] do not all fit neatly into either group, however. Some [species] are highly specialized, others less so, while some can tolerate many different environments. In other words, there is a continuum from highly specialized to broadly generalist.

Agencies will always be a vital part of the equation – but clients must take ownership of their businesses. That’s part of the new model.

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Today I’m going to kick off a multi-part series that addresses some of the challenges facing the changing client/agency relationship, along with some solutions that clients and agencies can work together to implement. Let’s just call it – Client/Agency Therapy.

Since this is the introductory Client-Agency Therapy post, i wanted to set the stage with a few principles, disclaimers and caveats.

  1. My goal is to help clients and agencies establish better working relationships, not to bash agencies (or clients). There are plenty of agencies and clients who buck the trends, really have their acts together and should be an inspiration to their peers.
  2. We live in interesting times. We’re working in a difficult and quickly evolving business climate that has been less forgiving than in the past. We are all tasked with doing more with less. We need to cut each other a little slack sometimes and foster positive and motivating relationships that focus on improving the future rather getting hung up on past negativity. That said, due diligence should not be taken lightly, and complacency and inefficiency should not be tolerated.
  3. We must all strive to be the best at what we do and instill this characteristic in those we manage and lead; enter into relationships with the intention of a respectful partnership; and establish accountability and feedback loops that maximize business performance and ensure that expectations are being exceeded.

Here’s just a sample of some of the topics we’ll be exploring together in Client-Agency Therapy:

  • Collaboration
  • Culture alignment and culture clashes
  • Agency organization challenges
  • Client organizational challenges
  • The role of specialists and generalists
  • The vital role of process
  • The implications of efficiency, or lack thereof
  • Importance of the right marketing technologies
  • Accountability
  • How people make all the difference
  • Client expectations
  • Agency proficiency
  • A new era of procurement
  • Agility

I’m excited to address a number of topics that tend to get swept under the carpet or ignored because they are either difficult to deal with, nobody has the time to think about, or sometimes we just don’t know what we don’t know. As a veteran digital agency executive who has led and sold a successful digital agency,  managed the integration into a large agency culture, and moved on to train and consult agencies and clients, including some of the largest media agencies in the world and several leading brands, I have a variety of hands on experience to speak authoritatively on these topics. However, I also have enough humility to reach out to the community and ask you to chime in and augment and debate some of my concepts and statements. In fact, I very much look forward to the intellectual discussion and journey.

I hope that Client/Agency Therapy will also spark conversation within your organizations on how to become better digital marketers and partners.

 

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Hey direct marketers – guess what – you have an attribution problem. You may not realize it yet, but if you are running campaigns in multiple digital marketing channels like search, display, affiliate marketing, and comparison shopping engines, you are double  counting some conversions (sometimes triple counting), over crediting certain channels and under crediting others. Your model needs a fixin.

Attribution reporting tools have been on the market for several years now, but are potentially the most underutilized tools by agencies and advertisers today. In part this is due to the complex nature of the planning involved in making the data actionable – in other words planning to go from attribution reporting to media mix modeling based on the analysis. On the other hand, digital media planners and agencies have been working to the bone and have very little time to innovate and discover new and better ways to work and service their clients.

So when Hollis Thomases from ClickZ reached out to me for input on this important topic, I was more than happy to help. It’s a topic I am quite passionate about. I think she put together a great article that highlights the issue.

Under-utilizing great marketing technology is nothing new. As an industry we have a history of under-utilizing the capabilities of the marketing technologies that are at our fingertips. I’ll never forget when Doubleclick wanted to shut down their Boomerang product, the very first retargeting technology on the market. Our agency was one of a small handful using it, and although circa 2000 it was tough to scale retargeting programs, we managed to run some of the first successful programs for large portfolio companies like Cendant. Fast forward to today. Retargeting has not only become one of the most popular forms of behavioral / data-based targeting, but an entire retargeting industry has sprouted up in the last couple of years.

Granted, there are hundreds of marketing technologies and capabilities pitched to agencies on a regular basis. It’s hard to find the time to vet them all. But we do work in DIGITAL media and and it is important to  be on the lookout for tools and systems that can help provide bottom line impact for clients and agencies. Embrace marketing technologies in particular that help create efficiency in workflow,  accuracy in analytics, and provide better experiences to consumers.

I’d love to hear about any new marketing technology tools that you find useful.

 

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There has been a lot of talk over the last couple of years about how the “agency model is broken”. While a sexy headline for marketing trades, and a great scapegoat for clients, I find this phrase a gross misrepresentation of what has been happening in the industry.

Lovers Quarrels

First – there is truth to the client-agency relationship changing – often uncomfortably. Sometimes it is the agency’s fault for over promising, staffing non-strategic thinkers at the helm of account strategy, not fostering proper collaboration, not nurturing a culture of discovery and innovation – and sometimes the client’s fault for having unrealistic expectations, pushing agencies to do too much more with less, and not taking the responsibility to understand their own business better. But truth be told, the client and agency need each other and they both know it. Agencies need to learn how to say “no” and set realistic expectations of the new labor intensity, costs and resources required to accomplish the objectives of a client. This does fly in the face of the “old agency model” of saying “yes” first and figuring out how to execute and manage the work later. The recent resignation of the sizable Home Depot account by MRM is a a prime example of an agency forced to take a stand to ensure a profit from their work. I say kudos! Of course I don’t know if the account was improperly scoped in the first place (a common agency blunder in the over-eagerness to win an account).

MRM New York managing director Corey Mitchell wrote that “for reasons based on a fair exchange of services and a mutual inability to arrive at realistic expectations, we are choosing to walk away from our relationship with The Home Depot completely.”

Embracing Change

Undoubtedly, the only path to success on the client or agency side is to understand the seismic shift in the way we communicate with consumers,  the fragmentation of the distribution channels where we reach them, and the desensitization to marketing in general. Strategy used to be about the creative platform and how to inspire, motivate and tap into consumer passion. While these   creative and messaging objectives remain prerequisite components of an increasingly difficult task of  influencing consumers, the strategic emphasis has actually shifted to understanding how and where to reach consumers and the mechanisms  and marketing attributes that influence them. Agencies have been focusing on reintegrating services and capabilities – to a degree creating jacks of all trades, while they should be focusing on integrating strategic planning, analytics and modeling  while allowing for the growth of specialized units for the disciplines that are increasing in specialization. It’s not a silo’ed approach if the head (strategy & insights) and the tail (analytics and modeling) are driving and fostering collaboration. IPG just announced such a restructuring of their digital agency assets. Of course agency announcements and intentions sometimes vary from actual practice and proficiency.

The Good, The Bad & The Ugly

Since leaving the agency world in 2007, I have been working with Laredo Group, training agencies of all sizes, including some of the largest media shops in the industry. I have seen firsthand the challenges faced and how some agencies overcome these challenges while others struggle. Additionally, I have been consulting clients and agencies, including leading client  agency reviews and selections for clients of various sizes. Big agencies get a bad rap sometimes from pundits. I must say that I have seen some impressive agencies who are embracing  and leading the charge of change, innovation and growth. I have also seen a lot of complacency, mediocrity, arrogance with resistance to change, ignorance with a desire for change, and in a couple of instances, even straight up cluelessness. It’s tough running an agency when margins are being eroded by the complexities of the marketplace and the world is evolving faster than your staff can keep up with. It’s also tough for clients who are looking to lean on their agencies for thought  leadership and executional prowess when you keep hearing how the “agency model is broken” and agencies are the bad guys.

It’s All About The Talent

The Stylistics and Michael Jackson got it right – “People Make The World Go ‘Round”. An agency IS its people. The best agencies have developed a culture that attracts and retains top talent. To a client, agencies are as good as the weakest team members assigned to their account. This is often where the biggest perception of “broken” lies. Clients – be sure to request to meet the actual team assigned to your account before working with an agency. If already engaged with an agency, take the team out to lunch, get to know them better, empower them and make them want to kick ass for you. Often times they are unappreciated and overworked. But keep an eye open for the weaker links – hey, everybody has to learn sometime – just make sure they aren’t on your strategic planning or analytics teams!

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Agencies behold! Today I ask you to look in the mirror and ask yourself one simple question.

“Are you proud and confident of your digital services, or are you faking the funk?”

If you are truly proud of your digital capabilities, feel free to stop reading now…

Over the last three years I have trained and consulted  dozens of agencies of all sizes, from the small local shop to the largest media agencies in the world. What has become clear is how easy it is to get caught up in “bright shiny object syndrome” – focusing on the latest and greatest new media platforms or trends that hits the trades. We all do it from time to time, and don’t get me wrong – there are plenty of opportunities in emerging media. However, it is important to understand that it is not the sexy emerging channels and new technology that create the base of most digital marketing programs, but rather the tried and true digital staples that have shaped the digital ecosystem up until this point in time. Funny how easy it is to forget that simple fact.

The Future (Present) Is Bright

There is no contesting the fact that there is more evolution occurring before our eyes than ever before. But there are hundreds of agencies who are still working on catching up to the curve.  These agencies should be cognizant of how easy it is to lose sight of the fundamentals in the quest to skip to the head of the line,  which does not compensate for a lack of general digital capabilities. Offering clients a social media program or talking about locations based services (LBS), or making a website optimized for the iPad might prove that you know what the newest trends are – you might even get several small projects out of it – but it will not help you drive your clients’ businesses forward in an impactful and holistic way, nor will it help secure a longer term digital relationship with your clients.

Back to Basics

Mastering the ability to plan, execute and manage “traditional” digital media and marketing programs based on clearly defined objectives is a prerequisite to venturing into the emerging media world. Granted, today social and mobile programs are leaving emerging status and becoming a standard part of the mix, but without a proficiency rooted in best practices surrounding reaching, engaging and influencing consumers, optimizing search engine discoverability, and measuring and optimizing these activities, any efforts into the emerging media world will inevitably be shallow and incomplete. Emerging media is not a replacement of traditional media, but a compliment. This is as true for TV as it is for the internet and all of its evolving sub-channels (we’ll leave newspapers out of this conversation for now). Most digital and integrated agencies make their bread and butter from “traditional digital services” – digital strategy, media planning, buying & management, search engine marketing (SEM) & search engine optimization (SEO), web development and creative, and analytics. Only then can you truly maximize the impact of emerging platforms on consumer engagement as well as agency profitability.

Making It Work

Successful agencies have established specific processes to combat the labor intensity and lower margins associated with certain aspects of providing digital services. With proficiency across the board, agencies can determine where the margins exist and how to focus on making money in a cut throat and fast paced competitive ecosystem. As clients’ digital spending increases, the ability to generate significant revenues and profit will increase accordingly. Many technologies exist to help automate and centralize specific tasks, such as ad servers for centralized ad delivery, measurement, and reporting; bid management systems for bidding and optimizing search marketing programs; social media monitoring tools for aggregating buzz, sentiment and trends within the social sphere; DSP’s and data exchanges for second channel audience buying; dynamic creative optimizers for multivariate testing of creative attributes, just to name a handful. But keep in mind that technology is merely a tool to automate mundane and inefficient tasks and facilitate human-based insight generation. Technology requires management. There is no plug and play solution – no silver bullet to replace talent and knowledge.

Challenge yourself and your team regularly. Times have changed. There is a lot to learn, and it may be the time to pay your dues all over again. Embrace pushing yourself beyond your comfort zone. It’s all worth it. As the saying goes, knowledge is power.

A lack of knowledge is not a problem. However, not developing a plan to develop the knowledge, and focusing on bright shiny objects can be your downfall.

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Agencies have become commoditized. To a degree many may have deserved it. But a good strategically minded agency is a good partner and needs to be treated as such. Commoditized agencies have no problem doing spec work, or bowing to clients’ every demand. Clients – I love you, how can I not, but if you see yourself in this video, know that you are often hurting yourself more than your agency or partners. The reality is – good work is not cheap. As the adage goes: Pick two of the following: Fast, Cheap, Good.

Enjoy!