Is The AOR Dead Or Alive?

The average client relationship now lasts under three years. As marketing to companies becomes a central function with CMOs involved in every part of the business, official agency relationships (AOR) are evolving. Some stick with their exclusive shop, others forgo agencies entirely and the remaining use a hybrid model with numerous relationships.

Hill Holliday's Karen Kaplan and Sonos' Joy Howard joined moderator Fast Company's Bob Safian during the final presentation at Advertising Week 2016 to discuss whether an AOR is irrelevant in today's landscape.

Hill Holliday's Kaplan believes AORs are critical for the "need for curation. Somebody has got to map out all specialist agencies and take into the customer perspective to map out entire customer journey." The only party that is seeing everything that a brand is putting out is the customer. "Someone needs to curate those experiences," she says.

Sonos' Howard offers a different perspective. "It is almost impossible to curate," she says. Rather, outside agencies offer "a deep relationship and strategic leadership. Part of what you are paying for is the deep knowledge across communication space." She says it is less curation and more integration. Ultimately, "We are partnering with whoever can do the best work."



She sees too many pitches of shops trying to expand beyond their expertise. Sonos, for instance, will never be good at film. And video is critical to reach consumers. "So that is we look for that capability in our agencies. And we can learn together and work well together as collaborators."

However, Howard says in-house capabilities are making agencies less important. This is especially true for data intelligence. The biggest challenge is that AORs just can't close enough data internally to be responsive in today's real-time world, she says.

Online platforms have eroded the agency relationship as well. "We can't talk about this without talking about Google and Facebook and what they provide," says Howard. These low cost options provide many tools that agencies used to handle. "They are great partners for us and have a role alongside our agency partners with us."

All of these factors have helped to evolve Hill Holliday's AOR relationships over the years. Kaplan notes a tone of cynicism have seeped into CMOs. "Don't tell me that you do 15 things well. Tell me you do eight things well and partner with other seven. They don't want to hear they do everything well," she says.

Hill Holliday "literally has a matrix" guiding its future plans. The first dimension focuses on positioning and vision. "And what we think we are all about." The other one is whether we know how to make money of this, she says. "We are good at partnering with specialist agencies." Twenty years ago, by comparison, all relationships were exclusive. "If we are not providing services, [the client] will pay for you to build it. I called it, 'you buy, we fly.'"

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