In April 2016, Ebiquity France’s Nathalie Taboch and Laurence Delaye addressed a seminar on media efficiency run by the French Institute for Research and Study of Advertising (L’Institut de Recherches et d’Études Publicitaires, IREP). Their talk was designed to illustrate how to build effective advertiser/agency relationships in a changing media environment.

Advertiser/agency relationships demand simplicity and clarity in all aspects and for both parties. But today’s multimedia, multichannel media environment is increasingly complicated: a situation driven in part by growing complexity in advertisers’ organizational structures. This means that, both internally and when interacting with their agencies, there are barriers to be overcome if relationships are to be harmonious. Here are four.

Agency relationships 4

  1. Advertisers’ organizations have become Polytechnical

The ever-changing digital landscape, and the need to innovate to keep pace with peers, is driving advertisers to develop in a wide range of different skills and techniques. New expertise client side is not always matched agency side, and this is disrupting relationships like never before.

DEFINITION: Polytechnical – poly + technical: ‘many skilled; possessing many skills’

  1. Advertisers are becoming Polygamous

Before the digital revolution, a media agency was typically an advertiser’s principal agency of record (AOR). Leaving behind the simplicity of a single global partner, advertisers are increasingly fragmenting agency rosters. Many do not hesitate to engage specialists in particular channels or platforms to secure more control or transparency. Multiple relationships are harder for an advertiser to control than a single partnership with an AOR.

DEFINITION: Polygamous – poly + gamous: ‘having more than one mate; with many partners’

  1. Advertisers become Polydirectional, agencies consolidate

Paradoxically, while advertisers share their relationships with multiple partners, the big agency groups are integrating and consolidating service offerings to serve their clients’ needs. This is further motivated by big agencies’ desire to expand internationally. Agency consolidation helps to integrate diverse skillsets into complex networks – from data analytics to data management platforms (DMPs), from consulting to content creation and curation. While advertisers diversify, agencies consolidate, and these opposing trends are creating disharmony between advertisers and their agencies. It’s what we call ‘the Polydirectional Paradox.’

DEFINITION: Polydirectional – poly + directional: ‘facing in many directions at the same time’

  1. Internally, advertisers must become Polycephalous

Because of the increased complexity of client organizations – organizations that have become Polytechnical, holding Polygamous relationships with multiple agency partners – and the accelerating consolidation of the big agency groups, decision making within organizations has become necessarily more complex and conflicted. So the principal challenge is how divergent ways of thinking can accommodate shared advertiser/agency objectives when targets are not aligned.

DEFINITION: Polycephalous – poly + cephalous: ‘having many heads or brains; capable of thinking in many different ways at the same time’

Here we outline our recommendations for addressing the challenges of the emerging media ecosystem in three critical areas: procurement, silos, and global/local execution.

A) Procurement

Marketing procurement teams are growing in frequency and importance in advertiser organizations, although the objectives of marketing and procurement are not necessarily aligned.

Procurement’s watchwords of enhanced productivity, agency remuneration, and transparency are not always marketing’s first priorities. Marketing frequently focuses on brand strategy, impact, and visibility. Experience suggests five golden rules that can reconcile this apparent incompatibility.

  1. Business and media objectives should be shared, discussed, and agreed.
  2. Marketing and procurement must both commit to upskilling and enhancing their digital understanding.
  3. Project management and a clear demarcation of responsibilities should be enshrined using Responsibility Assignment Matrices. Everyone needs to know who’s doing what.
  4. Mutually acceptable monitoring tools and methodological rules must be put in place to avoid loss of control and misunderstanding.
  5. Advertiser/agency contracts need to accommodate the latest trends and developments in media – particularly digital – and set clear objectives, scopes of work, remuneration, and incentives.

B) Silos

Marketing and procurement come from different worlds and frequently exhibit misunderstandings and incompatibilities. They have different – sometimes conflicting – business objectives and separate expertise. They often fail to communicate and there is little pressure from management for the departments to work together.

We suggest not that silos must be broken, but that we need to connect departments and foster a culture of collaboration. Respective expertise is valuable and needs to be both consolidated and valued by both sides. What’s more, by integrating the departments which have shared responsibility for marketing’s success, we stand a better chance of delivering better business results.

Siloed departments must communicate and be able to understand one another, but to do this they must share common business objectives in addition to their specific objectives. This is our prescription for integrating silos:

  1. The CEO should set and drive governance rules.
  2. Operationally, it is necessary to establish a function which brings together diverse yet complementary data sets to enable relevant inputs from both sides and seamless decision making based on rounded, blended analytics.
  3. For advertiser/agency relationships to work, client organizations must take control of each relationship and to define – clearly – the parameters and scope of each agency. What’s more, agencies should share intelligence and data.

C) Global and local

This internal global vs local battle in advertiser organizations is often not mirrored agency side, and this impacts ways of working negatively. As a result, all parties work less effectively in partnerships. Also, different advertisers operate different organizational models – driven centrally, locally, or even glo-cally – and this creates confusion as agencies attempt to second-guess client structure.

To reduce friction here, our golden rules are:

  1. Global agency partnerships mustn’t ignore the fact that implementation and execution are often delivered locally.
  2. Clear monitoring and reporting processes must be set up in the same way as best practice in brand strategy is shared across advertisers’ organizations.
  3. The scope and roles of global and local must be clearly defined in advertiser/agency contracts.
  4. The right roles and responsibilities must be allocated at central and local team levels.

Advertisers and agencies are moving in different structural and organizational directions – advertisers more diverse, agencies increasingly consolidated. The motivations for advertisers are to take the opportunities the new, ever-more digital media ecosystem offers and to drive efficiency and effectiveness; the motivations for agencies are to address and meet perceived clients’ desires and needs. For advertiser/agency relationships to flourish, both sides need to understand these changes and the reasons for them. Our golden rules offer both sides the chance to flourish and grow.

What single change do you believe would make relationships between advertisers and their agencies more harmonious?

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