'Thank you' and other tips in getting the best out of ad agencies

While chatting with a marketing veteran recently, the discussion acquired a 'those were the days' ring, recounting some of the best practices of CMOs of yesteryears. While some of them are eternal truths of business, applicable to any business relationship (not just that of a marketer-agency), there are a few which ring true more for the advertising industry.

A marketer can actually do almost all of what an ad advertising agency excels in, except one - actually create the ads. A marketer can commission and interpret research, strategise, bring together and orchestrate a team of experts and manage a process - he really does not need an ad agency for these. But the one thing which a marketer cannot do is actually come up with an idea or 'create' an ad. An external partner - a film maker or an ad agency has to be commissioned for such.

An agency - more often an individual comes up with a tagline, a script, dialogue or some other brand property which contributes to business growth. Sure, an agency is paid to do that; but in my view, the value of such creations go beyond monetary compensation. Some brand properties have remained in public memory for decades and helped enhance brand equity and revenue. Very rarely do marketers appreciate this and acknowledge it. Another aspect unique to the ad agency business is the ownership towards the brand if there is continuity in the agency team. It is not uncommon to see huge churn at the brand manager level whereas the senior team at the ad or media agency has remained consistent on the brand. Ad agencies also have their share of passionate evangelists in the account management team, believing in and defending the brand, sometimes even more than the brand team themselves. It always helps to motivate such passionate and committed teams with appreciation.

If one were to sum up the best practices of the marketer-agency relationship, they would be:

Treat the ad agency like business partners: marketers may deny it but many do view the ad agency team as vendors or suppliers, not as partners. The former leads to bossing and ordering around with expectations of 'do as you are told'. The latter leads to a more collaborative approach, involving the team in solving the actual business problem through creative thinking rather than as someone who suppliers creative material at a cost & specification.

Invest for the long term: many of the memorable, business-building brand ideas and advertising campaigns have come from long-standing client-agency partnerships.

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Of course, as the cliche goes - it takes two to tango. The agency too has to live up to the expectations and faith imposed, by delivering effective creative which produces results. However, the pitch process, criteria for selection are more conducive for working with the cheapest than the most optimal creative partner (more on that in a separate blog post, perhaps). The selected agency is quite likely to have undercut a competitor and at that fee might find recruiting good talent or adequate staffing an issue. Combined with a brand management team which thinks short-term tactics than long term strategy it often results in an unhappy client asking for a review in two years - rinse and repeat.

Reward them justly: the 15% agency commission driven by media spends is a thing of the past now. Over the years, procurement 'specialists' and bean counters from the client team have taken over fee negotiations which are linked to scope of work, staffing requirements and so on. The monthly retainer fee is the most commonly accepted method with some clauses for an upside based on meeting or excelling performance metrics. While I don't have details of commonly accepted fee structures and margins I am sure there is some arbitrariness and most agencies will accept a sub-optimal deal for fear of losing out. Also, it is common for marketers to feel they are overpaying while the agency has an exact opposite view.

Appreciate the good work: very often, a simple 'thank you' (and if possible a reward of some sort) goes a long way in keeping the team motivated. There are many stories of forward-thinking clients appreciating the agency account management or creative teams (sometimes just an individual who made a difference) with small gestures - a concert or sports event ticket, a holiday and so on. One such instance I came across recently is this: the Brigade Group is a reputed real-estate firm based in Bangalore. Marketing & advertising is an important function in this category as both individual properties and the corporate brand need to be positioned and promoted right. In this category , a tactical, short-term approach to selling is common and long term brand building is rare. In this context, it was refreshing to see a tribute from the brand to its long-time ad agency partner. Now imagine the motivation levels of the team after such a message.

As always, most of these are simple, easy-to-practice steps (except perhaps the remuneration part, which can get complicated) which all of us forget while chasing the short term to-do's. Any suggestions, thoughts or tips? Do comment in.