Commentary

The New Normal In Agency-Client Relationships

For reasons you will understand, I can’t go into the details of the landmark solution that was engineered for McDonald’s with Omnicom. It also won’t surprise you that some of the peanut gallery commentary and assumptions were incorrect.

But what I can talk about is what I think the industry can learn from the recent “big” pitches. Let’s call that the new normal.

First of all, despite all the hype, I think most clients still want their agencies to be their trusted partners and allies. Jeff Winsper recently delivered a fierce call to arms suggesting that agencies should put a stop to the bullying from loathsome clients who are disloyal, unfair and only out to get everything on the cheap.

 Those clients exist. You know who you are.

These types of clients are also short-sighted and will lose out in the long run. If you are an agency, I can only suggest you don’t work with these types of clients. Or if you choose to do so, then don’t complain.

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But most marketers we work with are very cognizant of why they need an agency. They understand that they need certain service- and subject-matter experts, and they rely on their agencies to make magic happen.

Marketers have also seen that, despite years of griping by agencies about fees allegedly going down year after year, the agency holding companies are doing pretty well financially. We know this because they report so themselves each quarter as they are beholden to their shareholders, just like most of their clients are. Clients also understand the principles of a free market economy, and that certain exceptional performers can command an exceptional fee for their services.

However, in their quest for revenues, agency holding companies broke almost every service into a separate profit center and started charging clients accordingly, sometimes using somewhat “opaque” methods (reference the ANA report). At the same time, marketing as a whole desired an integrated brand story consistent across all touch points along the customer journey. And as the agency model does not seem to be changing any time soon, you are seeing more and more clients seeking to reintegrate the fragmented agency services themselves.

Clients today want the flexibility of an a-la-carte airline ticket from an airline, with the dependability of the Japanese railway system (I only use them as example because I know they’re very dependable). Clients want the flexibility to book an all-in first-class ticket when needed, or a no-frills basic economy seat if that is what the journey requires. And they want to trust the supplier to deliver both with the same level of trustworthiness. In other words, they want to trust their partner to get them “there," regardless of the kind of ticket they bought. “There” of course stands for result, however defined.

And so the new client-agency relationship will be built on a couple of principles that are not going to go away any time soon:
-- A la carte services and flexibility.
-- Integration across all touchpoints in story and touchpoint strategy.
-- A business-like approach to fees, overheads and other costs. Profit is not a given and must be earned.
-- Transparency into cost, earnings, pass-throughs and other contractual elements.
-- A monthly free lunch at a 5-star restaurant. (OK, that last one is optional.)

3 comments about "The New Normal In Agency-Client Relationships".
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  1. Kevin Lee from Didit, September 12, 2016 at 12:02 p.m.

    Lot's of good points (part of why Didit has made 9 acquisitions in the last 5 years to deliver an every-touchpoint execution to clients who want it.
    However, I would say that in most cases there is no free lunch, not at McDonads or at a 5-star restaurant.  Even if the 5-star restaurant is a client.

  2. Ed Papazian from Media Dynamics Inc, September 13, 2016 at 3:25 p.m.

    Agreed, good points. One thing that always bugged me in my years in the agency business and later, as a consultant to a number of advertisers was their oft stated desire to mine the collective experience of all of an ageccy's accounts, to stimulate new thinking. Yet whenever an "outsider" who could provide such knowledge was called in, the client bean counters questioned why the advertiser should pay for "that stranger" as part of its fee system. Small wonder that so much of the collective experience at a large agency is never put to use outside of the client by client silos.

  3. jeff winsper from winsper, September 14, 2016 at 11:58 a.m.

    Maartin - thank you for the Winsper call out in your article!  I already shared my thoughts so no need to take up too much space in the comment section.  The cool thing we wanted to do is have agencies support the next "ad" star too.  If agency stafff elect to express there feelings by way of http://www.cafepress.com/winsper then we will donate 100% of proceeds towards a high school marketing degree candidate.  So check it out, buy a coffee mug, and we will keep you posted on the progress. 

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