Agencies can’t put themselves first and most agencies know this. When the client benefits so does the agency. Not because the client is always paying the lowest price but because the client is receiving full and accountable value for what they pay and the agency is making a reasonable and accountable profit. This is where the client procurement/marketing partnership becomes critical.  Procurement people and their marketing colleagues must understand what media can accomplish and how a measurable return-on-investment is best achieved.

Emphasis on cost management has become increasingly important as advertisers pay closer attention to accountability. While client revenue and profits year after year have always been quantified the factors that specifically contribute to those goals remain difficult to measure.  However, in this digital age, measureable metrics for producing positive financial results have evolved.  And procurement working in conjunction with marketing now requires a better model from vendors and agencies that work with them.

Media pricing benchmarks and agency compensation methods are very important but often they are incomplete measures of accountability. For one thing, every advertiser has different needs and therefore different benchmarks. For another, there are a variety of ways for agencies to be compensated including commission rates (usually by medium), labor-based and value-based fees, or combinations thereof. Incentive programs are also now included in half of all client/agency contracts written.

When it comes to benchmarking, most of the data is historical and with the rapidly shifting, cross-platform media world, media pricing norms are unreliable and often inaccurate. Furthermore, today’s economic environment has dramatically altered agency salary, overhead and profit. We believe that the benchmarking process must be more current and comprehensive. Cost management is more than just media pricing and agency economics. It is just as necessary for financial control to understand scope of work, seniority and experience levels of the agency team, the media integration process, defined resources and analytics, accountability methods and monitoring procedures as well as real time measurement data.

All of these require the client and agency to agree upfront on the specific goals to be achieved and a monitoring system to continuously track their progress.

Over the past three years the number of agency reviews has doubled, while consultant involvement halved.  Today clients conduct 85% of agency searches in-house and the number is even greater for media only reviews. The expansion and involvement of client procurement has helped the advertiser control and manage costs, but because the typical client/agency relationship lasts only three years review outcomes have left much to be desired.  Media reviews especially require assessment of agency vision, culture, innovation and leadership along with new benchmarks and scope of work processes, which are more difficult to evaluate.

We believe that the process for selecting agencies has not kept pace with the demands of today’s marketplace and economic pressures.  Whether the client leads the process in-house or a consultant guides it, the evaluation process requires a new, more comprehensive model to increase the chances of an enduring and successful outcome.

Several important things are missing from today’s media reviews namely extensive media experience, the proper methods for clients to engage a search consultant and the most complete set of tools and systems to evaluate how well the agency can perform.

The right experience guiding a review results in a more informed and, more efficient decision. Media reviews must be led by media consultants who fully understand the dynamics of contending agencies and can uncover all of the pitfalls and values.

With digital advertising approaching one-fifth of all media investments, advertisers must think about   multi-media concepts and integration as an agency requirement.  How these strategies and structures are evaluated require practitioners who have lived the experience.

In order to insure value from consultants, a different financial model is needed. Consulting fees need to be more flexible.  Procurement should be able to control the cost of consultant involvement, whether it’s a full-scale review, staged process or adjunct to the client conducting their own in-house search.    At the back end, once a winner is selected a sound transition and monitoring process should also be installed to provide additional support and value over time.     

At the front end of a review the use of the most appropriate tools and systems allow a thorough   Diagnostic Needs Assessment for a client’s specific business and marketing requirements.   Media plans and buys as well as the current agency’s performance related to issues of discontent should be evaluated. These are often at the heart of an agency change.  Finally, a granular Scope of Work Model that characterizes every task in terms of timing, priority, complexity and re-work should form the foundation for a successful, orderly and honest search.

Agency compensation is also complex. A simple comparison of the agency fee submissions is not enough. Agency economics need to be benchmarked against the marketplace as well as the client category of business and the specific media functions to negotiate a fair deal. An agency granular staffing plan mirroring the scope of work should be appraised against the level of experience required, functions to be performed, as well as   strategic and tactical support and administrative backup.

During a final presentation client and agency teams should face each other for an improvised strategic discussion.  This allows the client to watch key agency players in action.   It reveals how the agency thinks, how they work together and yields a good sense of chemistry.

Giving an agency a buying challenge can be misguided if it is built on promises of what they will do in the future.  Buying challenges must be fact-based.  They should reflect the agency’s strategic and buying prowess including budgets and performance metrics, which have been delivered and compared against appropriate and relevant norms.

Taken together, these steps constitute a new and more rigorous approach to agency media reviews.   They will result in a more informed decision when it comes to selecting a winning agency and securing a more lasting client/agency relationship.

Over the past three years the number of agency reviews has doubled while consultant engagement has halved.  This is even more acute with agency media reviews where the issues are more complicated.  The trend reflects Procurements growing influence in the agency review process and the drive to control costs.   

Drexler/Fajen & Partners offers necessary value added features for agency media reviews that cannot be found elsewhere.

1. Cost controls: We will work for a flat fee, hourly rate or ala Carte    to help Procurement control costs.
2. Convenience: When necessary we will work in the client’s offices behind the scenes directly with the client review team.
3. 3. Experience unequaled: We are the only review advisors with as much media and review experience.  Between the two of us we have been the chief media officer at eight agencies, a digital agency, CEO at two media agencies, President of an advertising agency and a research company, research chief at two companies, founded a media talent recruiting firm, ran a management consulting company, two media consulting firms, taught at the Harvard Business School, been published in the Harvard Business Review and by the Harvard Business Press, been twice acknowledged by the trade press as among the top 100 most influential media people and participated in or conducted scores of agency reviews.                                                  
4. Faster Reviews: Because of our experience our proprietary screening technique directs the review to just those agencies that are the most serious contenders, bypassing the initial round of time-consuming credentials presentations.
5. 5. Unique Scope of Work Grids: Our SOW grids are the foundation for assessing the amount, complexity, timeliness, and re-work factors involved in the new agency’s assignment and subsequent staffing estimates. 
6. Compensation, staffing and benchmarks: Agency salary, overhead and profit benchmarks, as well as unique staffing benchmarks on seniority and experience.
7. Talent roundtables: One-of-a-kind strategic discussions between client and contending agencies designed to discover agency team depth and breadth as well as client/agency chemistry.
8. 8. Fact-based buying challenges: Our agency buying challenges are fact-based, grounded in real buys, not hypothetical promises of what could be delivered.                                
9. 9. Anonymous industry panels: Along with out media pricing benchmarks, our identity-protected panels of senior executives verify agency media pricing promises, as well as staffing and compensation submissions.                                                                                                    
10. 10. Independent accountability monitoring: Once the review is completed and a winner selected, DF&P does not stop.  Every quarter for the next year we will monitor the various aspects of the new agency’s performance for improvement.

These ten unique features represent our competitive edge.  They are not available at other review firms and we are proud to offer them as added value to client marketing and procurement.

For more information you may contact us