Research from DataXu makes interesting reading. Brands generally want to look at conversion rates and likes, whereas agencies are keen on measuring ROI and Web visits. Both realise that KPIs are important, but each side claims it is difficult to get KPI feedback and agreement from the other. Ultimately, it means that brands and agencies know they have to be able to show they have delivered something tangible. Quite what that is and how you define whether it has been reached or not is a matter of contention.
I was talking with the marketing director of a household name just the other day about agency and brand relationships. One answer really surprised me. A lot of brands talk about how an agency is their partner, but it often rings hollow. It just sounds like a pointless PR term put out to make it seem like they're working more closely or getting on better than they actually are.
So it was interesting to hear that a brand, whose iconic ads are on the tv most nights, takes a different approach. The brand actually means it when it says its main agency is its partner. How so? Well, it actually incentivises its agency to share in its success. If targets are surpassed, an extra fee is due.
There's no hiding that it took a lot of organising and took a lot of faith on each side, but now that the two are accustomed o setting targets, the brand is in the unusual position of hoping that it will need to write a bigger check at the end of a campaign.
As far as the brand is concerned, however, it's happy with the arrangement because the agency is incentivised only to buy media that will add value to its campaigns and to ensure that its messages are not seen in unsafe places. The brand's success is the agency's success.
Seems pretty simple, doesn't it? It took a lot of work, trust and culture changes to get there, but apparently it works very well and the CFO is rumoured to be excited when asked to approve a bonus payment because it means a key KPI has been surpassed.
So while many agencies and brands can disagree on KPIs and find different ways to measure them, perhaps the solution is to become partners. True partners, that is -- who share each other's objectives and prosper when they have mutually surpassed expectations.