Working better together

Executive Partner John Owen discusses genuine partnerships, transparency and trust.

Reactions to ISBA’s Evaluating Creative Agencies report last week were a bit mixed.

The headlines focused on the negatives about agencies becoming “factories” lacking in ideas.

Agencies, in the main, responded defensively and evasively. In other words, either “clients are to blame” or “other agencies may be guilty, not us.”

Actually, given all of this, you might be surprised by some of the positives contained in the report, which was carried out for ISBA by the Advertising Research Centre. Nearly three-quarters of clients, for example, agreed or strongly agreed that “our agency delivers work that gets strong marketplace results.” And 80% agreed that “our agency contributes significantly to the standing of our brand.” Let’s celebrate that for a nano-second.

And then, let’s recognise that there are undoubtedly issues contained within the report which the industry needs to face up to. I say “the industry” deliberately, because neither the causes nor the solutions lie solely with agencies. Clients, too, must shoulder the responsibility for building better relationships.

The big issue: value for money

The most obvious issue of all is that of value for money. Notwithstanding the positive statements about agencies’ contribution to marketplace success and brand standing, only 33% of those polled agreed that “our agency delivers excellent value for money.”

I can’t think of too many other industries where such a schism exists between customers’ perception of quality and value. It’s worth spelling out one more time: 80% say the product is excellent; 73% say it’s delivering results; 33% say it represents value for money.

So, what’s going on?

Well, it’s 15 years since ISBA last carried out such a survey but the same schism existed then too. So it’s not a new issue, but equally it’s not one that’s being addressed.

If anything, things are getting worse. Last week’s negative headlines weren’t wrong: the report does contain clear indications of dissatisfaction with strategic thinking and pro-activity of agency management. This, coupled with doubts about financial transparency and deficiencies in “efficient administration”, create an unhealthy situation.

In a nutshell, a lot of clients think they’re being ripped off.

The value of transparency

Clearly, agencies need to respond. Tangible commitment to the client’s agenda and a willingness to be open about rates and hours worked would seem like a good place to start. The best relationships at Dare enjoy high levels of financial transparency, but this places a demand on both parties to do two things: first, put the best interests of the project ahead of their own marginal commercial gains; and, second, adopt a spirit of genuine fairness when it comes to recognising effort that deserves remuneration. It’s not easy. There’s a fine line between financial transparency and constant negotiation – and there’s nothing like the latter to destroy a relationship.

But, if you get this aspect right, it creates the conditions for delivering – and appreciating – quality output.

It’s a truism to say that remuneration and quality are linked. In the time honoured phrase, “you get what you pay for.” And the more transparent you are, the more literal that statement becomes.

In the past, agencies may have resisted such scrutiny. But now I’d argue it works in their favour. Pressure on costs shows no signs of abating, but this cannot be acceded to without consequences.

It’s not just that rates – and with them, margins – are being squeezed. Retainers are also diminishing and disappearing, with senior personnel routinely struck from fee schedules by procurement. This may have started with the legitimate aim of slicing fat, but it’s now in danger of cutting to the bone. One legitimate interpretation of this report is that pressure on costs is leading directly to a reduction in quality, which is in turn leading to a decline in value for money, leading to more pressure on costs. In this scenario, no-one wins.

Transparency is part of the solution, here, and agencies need to embrace it. Showing exactly what – and who – your money buys is a vital part of winning the argument about the level of investment that is required. Those twin issues of pro-active managerial input and strategic leadership both come at a price.

The fragmentation problem

The other significant cause behind the decline in strategic leadership is fragmentation. As the marketing landscape has become (and continues to become) more complex, clients need agencies more than ever. Unfortunately, this need is often mistranslated into a need for more agencies. And, actually, this creates more problems than it solves.

For a start, it gives clients more relationships to nurture than they can cope with, resulting in the failure to build trust with any. But it’s the fact that these specialisms are drawn along the lines of production output rather than strategic input which is to blame for the “strategy problem.” Under these conditions, agency strategists really just end up planning communications tactics in their own disciplines. No-one is seeing the bigger picture. Without real strategy, agencies aren’t much more than production companies. Hence, the soundbite in ISBA’s report about agencies becoming “factories”.

The need to think and act beyond comms

Is this retreat into commoditised production now irreversible? I don’t think so. The report also finds that newly appointed agencies are considered to be more digitally literate and media neutral in their thinking. This is something clients appreciate and want more of. It’s something more established agencies have really struggled with.

Logically, the more agencies equip themselves to think holistically and objectively in order to solve business problems, the more they’ll be trusted.

But this isn’t easy. It requires more than just superficial change. I’d argue strongly that true media neutrality involves going deeper than comms, into shaping the customer experience. Connected customers are your brand’s most important medium. Start there and work out. Don’t pre-determine channel selection, don’t focus solely on message, be prepared to apply creativity to any problem or barrier that prevents the customer from having a delightful experience of the brand, while simultaneously making commercial sense for the client.

This demands a different approach – more workshops, fewer briefings; more collaboration, less presentation. And a new set of skills – more experience planning, more data analysis, more design; less reliance on single, big solutions and more attention to making marginal gains across multiple touch-points.

It’s less sexy. But agencies which can do this will stand a good chance of becoming truly valued strategic partners again.

Of course, they do need the permission to work in this way. But, mainly, that’s going to come from them being able to demonstrate that they have the will and the know-how to do so. Because, seriously, what client today doesn’t need that kind of advice?

Genuine partnership

Ultimately, agencies need to start by recognising the pressure clients are now under – and working to help relieve that pressure. Marketing departments are more stretched than ever – as more is demanded of them, faster, in an environment that’s changing constantly. The last thing they need is a pushy agency salesman grappling for a bigger slice of a smaller pie.

Genuine partnership means working together, openly – not just financially, but strategically and creatively – to the same customer-centric agenda. It means understanding each other, respecting each other, trusting each other, charging and paying fairly and transparently. It means behaving as one team with one set of goals for which everyone is jointly accountable.

How hard can that be? Well, it takes time. The final – and perhaps most telling — thing to note from ISBA’s study is that trust increases in line with the length of the relationship. So, too, does efficiency, agility and pro-activity, according to the report. In the pressurised, results-driven world of today, time is becoming a luxury.

But perhaps we all need to take another nano-second, or two of it —to pause and recognise its value.

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