Regular agency reviews can optimise the relationship on both sides.
There has been a radical shift in consumer priorities over the past two years – shaped by political, social and economic events. The knock-on impact on brands and marketers is huge, as they seek out new ways of connecting with their markets and creating innovative campaigns. Marketing teams have had to revise their strategies, and address how they engage with their agencies.
According to Accenture’s report ‘Shrinking wallets, growing consumer needs’, people are willing to make trade-offs in order to thrive during uncertain times. Consumers want connections, digital ingenuity, personalisation, visibility and wellbeing. Marketing teams need agencies that can deliver on these and provide the collaborative expertise needed to reach their customers effectively.
Which is why there has been a marked increase in brands reassessing their agency relationships, and that should not just be in terms of capability.
Big global names should be carrying out agency reviews on a regular basis, at least annually. It’s not a reflection on an agency itself, as agency reviews should be an unbiased assessment on the value and efficiency they are bringing. And, it’s of course, not just about the campaign results.
A smart agency review
While changing customer and brand priorities play a significant role in agency review, these are just two sides of a multi-faceted approach. It is important to review your agencies periodically – either annually or at the end of each project – as it allows for both you and your agency to unpack challenges, complexities, expectations and results.
Why? Because this is the route to create a best practice methodology that can shape how you build your relationship with an agency going forward, or how you engage with a new agency.
Regular agency reviews, looking at their performance against clear metrics gives you the opportunity to see what worked for you, what didn’t, and reassess your expectations going forward.
It also enables you to understand how your roster of agencies performed against each other – setting internal benchmarks – as well as how they performed against global market benchmarks both of which can quickly highlight areas for improvement, savings and efficiencies.
Perhaps the best example of the importance of agency reviews can be captured in one year – 2020. An agency brought on at the start of 2020 would have had no concept of how radically the world would change by the end of the year. The upheaval across business, people, wellbeing and markets was so stratospheric that everyone was caught on the back foot. Success lay in an agency’s ability to disrupt and adapt at a pace that was unprecedented, and without anyone in the office.
It’s times like this that brands are reminded of the importance of having your agency pulling together with you.
The relationship between brand and agency is really important. You want your agency to be doing well and making a profit. As one of our client’s says “we want our agencies to get rich on our business,just not stinking rich,” – and therein lies the secret.
A closer relationship with an agency review
Brands must embed an agency review process into their marketing procurement foundations, making it a normal part of the process. This will not only help refine how the two companies engage with one another and share information, but it will replace the perception of ‘agency has done badly’ with ‘how can we grow together’.
Without agency reviews there can be a lack of clarity around how successful a project or campaign actually was. And often, Procurement may start to question the value agencies are adding. Without visibility into how the agency performed and, even more so, how the investment in that agency performed, you simply don’t have the full picture.
Sadly complacency all too often comes into play, especially in long term relationships. Prices just increase year on year, possibly small enough to not raise any suspicions. But when you start to get into the detail the agency is considerably above benchmark, their agreed profit margin percentage has increased considerably and the value is just not being delivered as it should.
What are the key factors to consider during an agency review?
- What was proposed in the original campaign and how were these objectives met? Were the various campaign elements delivered and, if not, what factors on either side inhibited this delivery? This allows you to assess where the bottlenecks are on either side and to then actively implement processes that resolve them.
- Who was allocated to work on your brand versus who actually delivered the work and for how long? There is the risk that an agency will promise senior people on an account and not deliver on this promise. As senior people often cost more, this can directly impact your agency fees so it’s important to ensure the right people remain on your scope of work.
- Where was your project work completed? With offshoring and remote working becoming more and more commonplace, it’s really important you know where each individual on your project is seated. You do not want to be paying New York day rates for someone working in Brazil because the difference is vast.
- How did the campaign deliver? Did it achieve its KPIs? What did or did not work? This allows you to assess what the campaign produced versus expectations and strategy and to refine this moving forward.
- What was the agency’s profit margin or overheads? Did these align with the overall campaign deliverables and metrics outlined in the agreement? Did the campaign produce results or did things fall short?
- Do you have reliable benchmarking data? You need data to ensure that what you’re spending with an agency is aligned to the industry standards and what other brands are spending in the same markets for the same type of campaigns. Identifying excess in this area can save your brand a lot of money. Benchmarking is a foundation to all of the above points as it provides you with something to measure against and quickly identify anomalies.
- Do you get transparency from your agencies? This is relevant to both the agency and the brand. Was communication clear? Did people meet deadlines? Did the relationship work? How can things improve to smooth over any bumps in the road? Finding issues doesn’t mean the end of the agency road, but rather opens up opportunities to transform the relationship and embed transparency and clarity at the heart.
Done properly, the agency review process can identify efficiencies and areas of savings that can then be reinvested or redeployed into additional campaigns and growth.
RightSpend’s capabilities are designed to improve agency and brand relationships. Giving you the digital tools you need to carry out constructive and detailed agency reviews – back by data to ensure that your agency relationships thrive and your campaigns are a success.
Interested to learn more about an agency review?