Archive for the ‘Client/Agency Therapy’ 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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