Making sense of the madness – agency partnerships, convergence and in-house models

Should you rethink your agency relationships? Being honest with yourself about your reasons and goals will help you make the right choice, says Graeme Sanford.

This article was sponsored by Sanford Partnership to outline and explore the effective management of global campaigns.sanford headshot

Marketers constantly need to rethink their relationships with advertising agencies and consultancies. They need to get the correct brand message and overall strategy out there.

There used to be a big difference between advertising agencies and the large consultancies but now the two groups are starting to look more like each other. Furthermore, big brands like CUB are bringing many capabilities in-house, leading to the emergence of in-house agencies as a resource to drive marketing decisions.

 

In-house capabilities

The new landscape is largely driven by marketers’ desire to enhance their range of expertise to assist in their ever-expanding responsibilities.

In the recent ‘Make your in-house agency your digital agency’ report, a Forrester analyst recommends CMOs bring the digital capabilities they require in-house for four reasons:

  1. Advance digital maturity
  2. elevate customer experiences
  3. establish transparency and control practices, and
  4. detangle the multi-agency melee.

When it comes to creative agencies, however, it recommends leveraging external talent, saying “it’s not easy to replicate or maintain their storytelling expertise and detachment in-house.”

In other words, they bring perspective and creative talent goes stale in-house. “CMOs who attempt to bring brand and creative agencies’ responsibilities in-house deprive their talent of the inspiration that fuels creativity.”

New media, new digital and new data management are all adding to the pressure on CMOs to get results demanded by their various stakeholders. They are looking for something that is new, something that will give them a market advantage. They know their customers are changing, particularly in how they use technology and media, and the data it generates.

 

Convergence

Generally speaking, large consultancies have focused on improving their clients’ bottom line and have dictated changes to make that happen. Agencies, on the other hand, have traditionally focused on improving marketing and brand metrics such as awareness and brand preference.

Structures are changing, however, for both large consultancies and advertising agencies. Big multinational consultancies take on big global business problems and are gaining work by networking their existing relationships with the C-Suite. We’ve recently seen the likes of Deloitte, PwC and Accenture acquiring companies operating in the advertising space generally, with special attention given to the development of digital capabilities and full-service offerings for clients.

It’d be a mistake to assume, though, that all advertising agencies have been doing over the past decade is selling creative ideas. There are many agencies I know that also address their clients’ business problems, not just the creative development. Good creative agencies “act as a sounding board for their clients’ assumptions,” says the report. They cannot simply hand over a campaign and say ‘off you go’, they must collaborate to develop a rich understanding of the client’s business and their problems before addressing them and creating opportunities. This role of strategic planning within agencies is often to integrate the market and its competition and then develop a particular strategy which can help a client and add value to the business or solve business problems and inspire creative and media teams to produce effective campaigns, in many forms.

Traditional advertising agencies are growing their range of consultative services. M&C Saatchi and Ogilvy now have business consulting offerings. Also, the media proprietors are getting into the game of offering more services with News Corp now nominating itself as a marketing services company.

Consultancies, advertising agencies and media often take the path of buying a company or an individual star performer to expand their range of services. Sometimes it’s because they want that big client or to strengthen their personnel offering. It’s easy if you’ve got the cash resources, but integrating the cultures, personalities and ways of doing things is far more difficult. There’s nothing new about this.

When The Campaign Palace, acknowledged by many as the best creative agency, was bought by Patts, they tried to change its culture and MO – agency personnel left, clients left and ultimately the agency closed.

Where once the results and profits were recognised as the outcome of great creative work, results and profits became the number one goal at the expense of creativity and successful advertising and – ultimately – client business outcomes.  

Big consultancies that have ploughed millions into their acquisitions of digital personnel or creative agencies will want their ROI, and quickly. Beware the costs. As well, there is the strategy that the more integrated services a company can offer and sell to their clients, the more difficult it becomes for clients to leave.

 

The blended model

For those looking to re-vamp their agency model, the Forrester report recommends a blend, curating an in-house agency culture with help from external agencies. Continue to leverage creative agencies for their fresh perspective.

“Creative talent thrives on having diverse brands to work on, collaboration with other creative thinkers, exposure to ideas and unconventional working environments.” On the digital side, this blended model “elevates everyone’s game” by focusing on:

  • integrating core competencies with internal and external specialists,
  • re-apportioning accountability, and
  • taking responsibility for your marketing technology.

So what’s the challenge for marketers choosing between consultancies, agencies, specialist creative, media shops or in-house models? As an ex-client I know marketers need to invest a lot of time in educating their new business partners. Assess your goals and develop a single-minded proposition. What are you trying to achieve? Why are you running the campaign in the first place? These days, a very tight strategic brief is something fantastic.

Be clear with yourself and agency partners. In the case of an advertising campaign, for example, everyone thinks they’re running advertising to sell stuff, but this is not necessarily the case. What you’re really trying to do is influence your buyer – and this doesn’t always mean the end customer. It could be department stores or supermarkets or car dealerships. As a marketer, make sure your retailers, whoever they may be, notices you’re doing a lot to help them sell product.

Finding and judging new agencies is time consuming. While the pitch may reveal a new thought or a creative idea – be it strategic, creative or media – will they offer better service or merely match the incumbent? Will they put their best people on your business? Will your business really matter to them and will they be cost efficient? Can they contribute more than you’re currently getting?

Be honest with yourself. Are you considering a consultancy because of the capabilities they offer? Or are you merely dissatisfied with existing agency partners? There’s a big difference there.

 

Graeme Sanford, FAMI, CPM, is managing director at The Sanford Partnership.

 

Sanford Partnership is an independent full service creative advertising agency. To find out more about building brands and achieving results, click here.

 

 

Latest from Sanford:

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Everything a marketer needs to know about managing suppliers and partners in challenging times:

– Which functions should be addressed in-house?

– Which should be outsourced?

– What a solid agency relationship looks like

– Expert commentary from Sanford Partnership

– Convergence

– Global campaign case study

 

 

 

Further Reading:

 

 

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