Let’s be upfront about it – the client/media agency relationship is under the microscope like never before. In some instances, trust has been completely broken down.
Lately, media rebates have been dominating the discussion of client/agency relationships. Media rebates are the practise by which media agencies take payments from media owners in return for guarantees of volume or share of their total trading budget.
Furthermore, there are questions over additional hidden costs/charges for more services, technology, data, and research. For example, Flock recently helped a client who thought they were paying the equivalent of 10% media commission for paid social/PPC advertising, but were actually paying 29%. A ‘clarification’ of the terms that they had contracted saved over $250,000 per annum.
Whilst we know what the issues are, and of course will address them, we much prefer to celebrate positive best practice rather than focus on the negatives. Below we’ve listed some of the fundamentals that underpin a great media client/agency relationship that ultimately enables great work:
- A strategy for media: Above all, there needs to be a clear marketing strategy and a clear role for the media platform (client, agencies, auditors, and media owners). Without a strategy for media, objectives cannot be set. Please note this is not the same as a media strategy, it is a strategy for media – what are you trying to accomplish, why, how, where, when, and by whom.
- People: A strong relationship between leaders at all levels is imperative, and holding key talent to the client’s business is essential. We are an advocate of key man clauses and other means by which clients can ensure that key talent is committed to their business. More important is making the client ensure that their account is a great place to work so that good agency talent is more keen to work on it.
- Objectives: A clear set of goals and deliverables is critical to drive the relationship and build alignment. If the agency and client are aligned, it is far more likely to be a productive relationship. The KPI’s should be simple and unambiguous.
- Contract: A contract that outlines the detailed requirements of both sides and is constantly refreshed is an important foundation to the relationship. As the media sector is very dynamic, the client may seek specialist advice from consultants and lawyers for an annual review to ensure the contracts remain clear and up to date. These are low cost refreshes, and often client share these costs with the agencies.
- Remuneration: There are a number of different means to paying media agencies for their services: fee, commission, gain/value share, and performance related fees can be combined to best reflect the strategy for media and objectives. Naturally, the remuneration should be fair and flexible and the structure of the scheme support the strategy for media. Sadly, there is often a mismatch between objectives, remuneration type, and actual amount!
- Measurement & appraisal: An evaluation of the media agency/client relationship should be measured against the strategy for media and resulting objectives. These can include sales, intermediate measures, savings, service, and strategic deliverables. The evaluations should be frequent enough to lead strong action plans to build on strengths and correct issues. Without a good appraisal system, misunderstandings can and will occur, and issues will not be solved. Different schemes can be created for different strategies, and can also be linked into remuneration.
- Integration: Media is increasingly central to modern marketing, and may have numerous overlaps and hand-offs with agencies whose primary responsibilities range from creative, digital, CRM, PR, SEO, customer service, and more. It is very important that roles, responsibilities and processes are set, and that they are reflected in contacts, appraisals, measurement and pay.
- Culture & Team. A smart client will give focus to the role of relationships and invest in building a strong team and culture. They will run workshops, strategy sessions, build understanding and alignment, and make time for fun. It can be shocking when some media clients know how to build a sports team or an arts ensemble outside of work, but do not use that knowledge at their work!
Our consultants have been media clients at places such as Coca-Cola, ABInbev, Sony, Disney, Universal Pictures, and Dorchester Collection. They have run agencies and had assignments at Dentsu Aegis, OMD, Starcom, Mindshare, and Zenith. Recently we have helped clients like GORE-TEX, McDonald’s, Ford, Sage, EY, Dixons Carphone Group plus confidential top ten and twenty global advertisers in managing their agency relationships.
We have the experience and the knowledge to help build or restructure media agency/client relationships. At Flock, we have developed the Flock Agency Appraisal Tool, a proprietary platform that provides two-way feedback and identifies issues that need to be addressed. Both positive and negative. All Flock appraisals can be tailored to your needs with qualitative feedback supporting the quantitative scores.
For more information on our Agency Appraisal tool, click here.
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