NEW 4AS DATA REVEALS THAT THREE OF EVERY FOUR AGENCY REVIEWS ARE NOW LED BY CLIENTS IN-HOUSE
To help guide clients, last spring, the ANA published an Anheuser-Busch InBev case history describing how to conduct an agency review. Their Marketing/Procurement Task Force should be commended for releasing this valuable source of information, but we found 12 critical steps omitted in this agency review case history.
We identify these steps and offer a long-term solution
that recognizes more reviews are going to be done in-house
12 CRITICAL STEPS OMITTED IN THE CASE HISTORY
(and in many client led reviews)
1. Diagnostic interviews to clearly identify what was wrong with the current agency relationship: So you can avoid making the same mistakes again and find an agency whose personality, culture and resources match your requirements
2. Detailed scope of work with priorities, complexities, rework and timing: So your new agency can more precisely understand your staffing, resource and timing needs and you are not over-charged for these resources
3. Proper screening criteria used to select contenders that fits with your needs as expressed in the diagnostic interviews: So you can avoid wasting your time and that of the contending agencies by only talking to those that really suit your needs
4. Relevant compensation framework that fits your work and budgetary requirements: So you can avoid unpleasant financial surprises by choosing the wrong framework
5. Benchmarks for staffing in terms of length and type of experience: So you are assured that the staff you are paying for is senior enough to handle your business needs
6. Benchmarks for salaries, overhead (by size, style and region of country) and profit margins: So you and the agency get a fair deal in terms of competitive bids and the marketplace
7. Media related incentives that encourage the agency to outperform averages: So you get a better return on your investment and the agency is invested in your success
8. Proper contract safeguards relevant to media: So you can avoid extra charges for critical media resources, have clear lines of liability, have explicit provisions for auditing etc.
9. Informed strategic challenge, not just buying: So your new agency doesn’t go down the wrong path because if the agency has the wrong plan, it doesn’t matter how efficiently or effectively they buy, messages will be misdirected
10. Independent panel of media experts : So you can tap into a reservoir of expertise to solve difficult issues
11. Handling agency transitions: So you can avoid having anything slip between the cracks as work and money transfers from one agency to another
12. Accountability dashboard to monitor progress over time: So you and the agency can quickly ascertain what needs to be improved
MONETIZING YOUR RISK
Since the average client/agency relationship lasts less than four years and change is very costly, you will want to make the best possible choice when changing agencies. By omitting any of the above deliverables, you run the risk of wasting your time and money, as well as underachieving in the marketplace.
Here are some observations by prominent sources:
“On average, 30% of an agency’s effort is wasted due to poor briefing” – quote from Association of National Advertisers in the preface to the 2011 ANA Financial Management Conference May 2011.
“The biggest cost of advertising is paying for ineffective campaigns. My estimate is that 35% of advertising dollars are wasted due to mis-targeted, mis-scheduled commercials.” – quote from Erwin Ephron: lifetime achievement award winner from Advertising Research Foundation after evaluating dozens of marketing models.
With an aggregated investment of over $1 billion in media modeling: “37% of advertising budgets are wasted.” – What Sticks by Rex Briggs and Greg Stuart
“The right media selection could save up to 15% on traditional media and 30% on digital “ – M-IQ and Double Verify
Drexler/Fajen & Partners are consultants with the necessary media expertise to support a client in-house review team “behind the scenes” to mitigate these risks and provide the necessary insurance for a successful and enduring client/agency relationship.
- We will meet your review team at your offices to set you up with learning, resources, media challenges and templates to run a thorough review.
- We will compare and benchmark agency compensation and staffing bids for all finalists.
- We will also make ourselves available for consultation, behind the scenes, during the entire review process if requested.
- Because we work behind the scenes, our fee will be considerably lower than traditional consultant led reviews and you are very likely to save multiples of that fee from our compensation work and the avoidance of misdirection alone. Of course, if you wish, we will conduct a traditional review.
GETTING TO KNOW DFP BETTER
To learn more about us call or browse our website.
Drexler Fajen & Partners
127 West 96 Street
New York, NY 10025