Four things Covid-19 has shown us on client-agency relationships
he past two years have been undeniably tough for advertisers and their agency partners. We’ve all been compelled to evolve new, more agile ways of working in the most challenging trading conditions for a generation.
A consequence has been advertisers’ fresh perspective on agency needs as consumer behaviour, buying patterns, target markets and budget allocations have influenced the marketing strategies. Thanks to a spirit of mutual cooperation, many advertisers and their agencies have worked together to solve both marketing and business problems but in other cases it has led to a parting of ways and pitching the account. To ensure rigour in the advertiser-agency relationship there are four focus areas advertisers should be mindful of.
1. Review and renew strong contracts for all marketing disciplines
Because most advertisers spend most of their marketing budgets on media, it’s easy to see why they’ve historically focused attention on media agency contracts – on transparency, audit rights, reconciliation, penalties, rebates and savings. Many advertisers are now looking to exercise similar rights in contracts with other marketing partners whether that be their digital marketing supply chain, specifically programmatic or e-commerce, creative and merchandising agencies. Just because media is the largest spend, there’s no reason for any contract to be less rigorously enforced and it is the marketer’s duty to their shareholders to mitigate risk, ensure contracts are fit for purpose and deliver the goods and services efficiently and effectively to achieve the marketing goals.
This enables brands to set clear expectations on performance and delivery, monitor and measure success by looking forward not back, and to drive an agenda of improvement in real time. The right contract keeps the terms and conditions of spend relevant, transparent, and enforceable and ultimately builds stronger trust.
2. Know the scope inside out
When the pandemic hit, many advertisers scrambled to cut costs and some were unaware of the basic obligations and rights under their agency contracts. Additionally, some contracts were difficult to understand and scope ambiguous as employees involved in originally had moved on or scopes of work changed over time. This led to some advertisers rapidly evolving their relationships, others changing them completely whilst others are in housing parts of their marketing activities.
Regardless of the catalyst that drives change it is the advertiser’s responsibility to understand what exactly they are buying. Marketers and procurement must obtain a thorough commercial understanding of the workings of more marketing channels than ever before – whether that is programmatic, ecommerce, influencers or gaming. No easy task, but they must be able to ensure they extract the services they need in the most efficient and effective way possible.
3. The right talent is essential
Many account reviews were paused, cancelled, or slowed down by the pandemic. This has created a bottleneck of pitch activity for 2021 which will continue into 2022 and beyond. In turn, this will impact the agency talent available to brands – star performers agency side can be pulled from the account work to new business, while they will also be lured to follow business if a prestige account moves to another agency. To be sure you continue to receive the level and quality of service set out in your contract, take time to review the teams allocated to your business and interview key talent. Ask challenging questions to guarantee that your account is being serviced by the best and most relevant talent available and with sufficient energy and rigour. An inexperienced account director can destroy a client-agency relationship even if the ideas and strategy are well thought out. An agency is only the sum of its talented individuals working within – creative thinking cannot be bottled and sold. Pitching is disruptive to both the advertiser and agency and futile if agency talent is not evaluated properly.
4. Advertiser reputation is reflected in all actions
One aspect of marketing that continues at pace is the increase in marketing dollars being diverted to digital media. However, the pursuit of so-called better targeting and reduced costs via cheaper CPM’s has created additional challenges.
Not long ago it was relatively easy for advertisers to avoid sleazy magazines, advertising during controversial radio and tv shows or advertising in inappropriate locations. However, the volume of sites in the digital space makes it far more difficult to authenticate whether any real people are actually viewing or whether the site reflects the brands value.
Customers are increasingly concerned that brands real actions on equality and sustainability amongst others reflects their corporate pledges. This is not only evaluated in hitting carbon emission targets or the number of females on their boards but also extends to ensuring they are advertising with publishers who run legitimate sites that reflect the brands values and not on conspiracy sites or other inappropriate sites.
Unfortunately, one side effect of digital advertising is ad fraud whether that be inadvertently advertising on fake sites, conspiracy sites or being a victim of any one of the numerous fraudulent activities. Ad fraud of all types is an estimated $50BN a year business and more recently many of the world’s leading brands have found their ads running on sites containing deliberate misinformation. Recent data from NewsGuard and ComScore found that fraudulent placement of programmatic ads alongside fake pandemic news or conspiracy theories cost brands more than $2.5bn in the past year.
One of the ways to tackle this is brands should set out an Inclusion list (‘whitelist sites’), rather than an exclusion list (‘black list’) with their agencies. An Inclusion list defines sites the agency can advertise on, whereas an exclusion list merely restricts some of the millions of sites available. This will ensure that ad dollars are spent on pre-defined sites that align with their values with real viewers.
These are just some of the simple but business-critical steps advertisers can take to ensure their partners provide the right teams to deliver against their contractual obligations. By applying rigorous standards to the advertiser-agency relationship no matter what marketing activity is being undertaken, there’s every opportunity to build enduring strong trustworthy partnerships.
Featured in The Media Online