By Mike Drexler and Steve Fajen
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.