By Steve Fajen
During the summer of 2015 sixteen major advertisers had put their accounts in review looking for a new media agency. $30 billion was at stake and the agencies were hard pressed to handle all that new business activity. By mid-winter, the crisis had passed.
Now a recent survey conducted by Advertiser Perception concluded that approximately two-thirds of advertisers plan to review their agencies in the next year. The study canvassed 90% of the top 100 US advertisers, so once again the action was in the big leagues and related to all types of agencies.
At the same time all this action is taking place, the 4As compilation of recorded agency reviews in 2015 concluded that search consultants were involved only 14% of the time, which was a drop of more than 50% from the previous year.
Clearly, advertisers are managing their own reviews more frequently, oftentimes with Procurement taking a lead. In most cases client procurement does not have an understanding of the differences in resources, staffing, approach, heritage and business philosophy between agencies, be they creative, media or digital. Clients are conducting reviews without extensive and valuable benchmarks of norms for staffing levels, salaries, overhead and profit and media costs. They are conducting reviews without trusted templates to gather, organize and evaluate valuable information regarding competing agencies on subjects like a thorough set of agency selection criteria, an initial RFP, a business briefing form, a scope of work, agency staffing and compensation plans, presentation scorecards and transition checklists.
We believe it is time to re-introduce clients to the various types of reviews at their disposal, so they simply can manage a better-educated search and selection process. Essentially, there are three types of reviews – Traditional, Fast-track and Advisory.
The Traditional review includes a thorough process involving at least thirteen steps (see chart below) and generally takes 12-13 weeks, with a consultant participating every step of the way. The Fast-track review involves fewer steps and can cut at least a month off the process. It essentially disposes of the semi-finals and collapses credentials into the final presentation. The Advisory review involves a consultant only working behind the scenes, with the client managing the process. The consultant provides, guidance, templates, benchmarks and continuous advice. This process takes as much or little time ads the client wishes, but they are working with tools that will produce a more educated result.
We believe with the deluge of agency reviews impending, clients should pause for a moment before moving ahead and realistically assess what they can and cannot do without outside professional assistance.
Here is a sample of the steps in a Traditional, Fast-track and Advisory review. Of course hybrids of these three approaches are also available on a custom basis.
Note that each method has different costs and each can work effectively depending upon procurement experience with reviews and CMO requirements.
Originally Published in Media Village