Five pain points in the marketer-agency bond


by adage.com

Tony Palmer
Tony Palmer

Kimberly-Clark CMO Tony Palmer said he’s got a healthy rapport with his shops — something both sides work hard to maintain. But as he looks across the industry, he sees several spots where strains can arise. Some of the problem areas he sees:

 

1. CREATIVITY HAS BECOME AN END VERSUS A MEANS TO AN END. In doing so, agencies and marketers have fallen into what I think is a destructive and binary debate — “creativity vs. business” vs. “creativity as a means to driving business.” Both must return to this thinking. Agencies need to rearticulate their value equation in terms of ideas — ideas that are designed to build business and are commercially driven — and then deploy their creativity against the delivery of those ideas.

2. AGENCIES AND MARKETERS HAVE NOT FOUND A MEANINGFUL WAY TO USE MEASUREMENT TO ELEVATE AND EMPOWER CREATIVITY AND COMMERCIAL IDEAS. Measurement, instead of being a powerful enabler, is becoming a source of tension, particularly when viewed through the lens of the false construct above. If agencies embrace, lead, drive, integrate and make measurement an intrinsic part of their product, they will immediately change their value perception to marketers. However, today it seems that research and analytics (most notably in creative agencies) is seen as the enemy designed to kill the opportunity for creativity.

3. AS AGENCY SPECIALIZATION CONTINUES, THE HOLDING COMPANIES HAVE NOT WORKED TO FORCE AND ENABLE COORDINATION, DE-DUPLICATION AND VALUE CREATION. Instead they have allowed creative agencies to be marginalized. In my view they have enabled massive inefficiency driven by duplication and, sadly, have enabled open strife and conflict in full view of marketers, which only serves to diminish the value of all agency parties in the eye of marketers. The holding companies need to confront this issue fast or they risk being marginalized. Agencies need to collaborate amongst themselves to create client-focused value vs. playing out strife in public view of their clients. This, in my view, is killing agency credibility and value among marketers.

4. THE ECONOMIC MODEL OF AGENCIES IS BROKEN. They are not set up to make a respectable margin and as such, instead of rethinking their model, they make short-term, superficial cuts that only serve to exacerbate the declining sense of value they offer marketers. It is easy to make client procurement the villain. To be fair, there are many cases where client procurement is executed in a destructive way — yielding no value to either the client or the marketer. Agencies need to seriously re-examine their model. They are becoming transactional with clients, which can destroy any chance of a long-term business partnership, and they are not able to attract and retain top talent, which helps in driving a destructive cycle.

5. THE INDUSTRY IS OUTSTANDING AT PUBLIC PRONOUNCEMENTS AND DEBATES ABOUT TRENDS AND THE IMPENDING NEED FOR CHANGE. Yet, they are unable to take action against this in a way marketers would expect a creative agency to. There are looming issues on the table now that agencies appear to be ignoring. Take, for instance, the expansion of production costs, driven by expansion of media and only to be compounded by real-time data. With this issue on the minds of marketers, there has been no material move by agencies to find ways to drive down production costs and improve cycle time. In my mind, this is either going to be an opportunity to lead or a basis for value erosion.

In the simplest of terms, agencies need to look deep within and ask themselves who their customer is, what their value equation is, how they are going to stay relevant and how they are going to ensure margin expansion, revenue realization and growth on behalf of their clients. These are the issues marketers are focusing on every day.

Agencies must stop being inward-focused and insular. They have to look at themselves, their models, their measure of success through the eyes of their clients. However, I will also say clients are part of the problem, as they (we) enable agencies to act this way. We as marketers need to place the pressure on agencies. We need to be clear with them and ourselves what we value. We need to make it clear we want change and will enable this change, as well as reward this change. If we don’t, the cycle will continue and we as marketers will get what we deserve.


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