Long before WPP’s current woes, it has felt like the relationship between brands and agencies is in a state of terminal decline.
Brands have been complaining that agencies are not delivering on their promises and agencies are always saying that brands lack the strategic thinking to provide useful direction.
Can these differences of opinion ever be resolved? Or are brands and agencies doomed to forever be disappointed with one another?
To find out, Econsultancy recently held a Digital Intelligence Briefing in Singapore and invited Damien Cummings, CEO of Peoplewave, Entrepreneur-in-residence at Econsultancy and long-time marketing leader of many household-name brands to let us all know what brand marketers and agencies need from each other.
Damien summarized the problem between brand and agencies as a difference in understanding.
- Brand marketers don’t understand agencies and they feel that agencies only offer ‘solutions’ which don’t solve the brand’s real problems.
- Agencies don’t understand brands and agency staff feel that they are victims of unfair cost-cutting, bad briefs and bad clients
Damien summed it up by stating that the ‘business of marketing’ is not well-communicated by brands and, as a result, is not well-understood by agencies.
Taking a step back, Damien pointed out that what marketers are trying to achieve is really quite simple.
Brand marketers need to
- understand where their company is today,
- set short-term and long-term goals,
- agree upon objectives for brand value, sales, market share, profit, and customer satisfaction.
Marketers then have four tasks:
- Help set the above objectives
- Come up with a plan for how to get there
- Report on the progress toward these goals
- Put the right marketing capability in place to achieve the objectives
The business of marketing, he noted, is what the brand’s marketing team does on a day-to-day basis to achieve these four tasks.
What motivates the marketer
So, Damien continued, a marketer’s motivations (along with their KPIs and remuneration) are based on business goals such as:
- increasing revenue
- increasing market share
- cutting costs
- lifting brand value
- making customers happy
And while they may use advertisements to achieve these goals, marketers are not judged or motivated by ad campaign performance. The marketer’s job is much more about building internal relationships, getting buy-in from stakeholders and, perhaps most importantly, keeping within a well-defined budget.
So while marketers are keen to know about how agencies can help them, pitches based on new technologies, platform optimizations, or ad performance simply do not address the things that they need to achieve every day.
Damien feels that this fundamental misunderstanding of brand marketers by agencies is widespread and may explain why agencies, in general, feel that they are working with clients who are always irritable and only ever produce ‘bad’ briefs.
What motivates the agency
Agencies, however, have a different view of the world. Instead of being aligned with the goals of their brand partners, agencies are focused on two main goals:
- Increasing revenue
- Building the agency’s reputation
Consequently, agency staff are judged and motivated by increasing fees, attracting more prestigious clients and winning awards. And, as a result, the daily work of someone working for an agency is dominated by replying to briefs, selling in a new campaign idea or reporting on campaign performance.
This means that agencies typically aren’t made aware of the constraints of the marketing budgets or the difficulty marketers face when trying to ‘sell’ the agency’s work internally. Specifically, agency staff aren’t informed about corporate change management procedures which dictate that marketers need to make cuts in order to get the budget for a new campaign or tech platform.
That agencies do not understand how hard it is for marketers to manage change with internal stakeholders likely leads to the notion that agency costs are being cut unfairly by brands.
Regardless of these misunderstandings, brand marketers and agencies still must work together. But with so much distance between them, how will things ever change?
Damien’s advice for resolving the impasse:
- Brand marketers should share their marketing plans and budgets with agencies. Providing agencies with their motivations will allow agency staff to understand the big picture of what the brand is trying to achieve and give the relationship a purpose.
- Agencies should talk less about campaigns and more about how the agency will help the brand achieve their goals.
- Brand marketers need to tell their agency partners about the change management procedures at their company and that for every new idea proposed by the agency, something else must be cut. Transparency and honesty must be at the core of the relationship.
- Finally, agencies need to be paid fairly for the work they do, including pitches. Having cost as the most important factor in every meeting turns the relationship into a constantly renegotiating transaction. Once a good relationship can be re-established, both sides will be able to have a shared agenda for success and focus on the next steps toward achieving the brand’s goals.
So while brands and agencies are unlikely to suddenly become close partners any time soon, Damien laid out some clear steps both sides can take to move forward together.
A word of thanks
Econsultancy would like to thank Damien Cummings, CEO of Peoplewave, Entrepreneur-in-residence at Econsultancy for sharing his insights about the state of brand/agency relationships gathered from his years of experience in the field.
We’d also like to thank all of the marketers who took time out of their busy schedules to hear about the latest marketing trends from our panel of experts – and we hope to see you all at future Econsultancy events!