So, you have a great relationship with your agency. But the contract is coming to an end. It’s amazing how quickly three years can pass. Procurement and legal are putting you under pressure to go to market and tender the agency. But your team is busy and while it is possible you could find a cheaper agency, you are not sure you will find a better agency than your incumbent. What do you do?
There is no chance of just rolling over the contract, because procurement and the CFO will want proof of the commercial competitiveness of the current agency arrangement. And while it is tempting to go to market to make sure you are not overpaying, the danger is you know that only one in five pitches results in the incumbent being reappointed.
The commercial realities of the market mean marketers are faced with doing more with effectively less budget, so any savings can be worthwhile as long as it does not disrupt what is working or decrease the performance. This is why in late 2019 we began offering our clients the opportunity to have an independent commercial review of their agencies without having the disruption of a tender or pitch. The results of the review are rigorous to satisfy all interested parties including procurement, finance and legal.
The agency pitch is no longer good governance
Too often we hear about marketers taking their agencies to tender on a regular basis. At the end of a typical three-year contract the advertiser goes to market to fulfil good corporate governance. Often this is mandated in the organisation as good procurement practice. But is this best practice for good governance when it comes to advertising and media agencies?
The evidence suggests that the tender process is a flawed approach for ensuring good governance. It is a way to select a new agency or supplier when the existing relationship is underperforming or broken. But taking an agency to tender when the agency relationship is healthy and performing well is a waste of time as it more often than not results in a poor outcome. Read why here
Time for a commercial review of your agency?
Rather than take you agency to pitch, find out how an independent commercial review answers all those questions you need to extend your agency relationship with confidence.
Getting the client / agency commercial relationship right is critical
Don’t get me wrong, measuring and monitoring the client / agency relationship is important. It is in fact the most basic activity both parties can invest in, whether through a two-way assessment, an NPS type feedback, or a client scorecard. Anything that provides a vehicle for regular reviews and relationship feedback is positive. It is far better to invest the time and money monitoring the relationship than simply crossing your fingers, wishing for the best.
But, when it comes to the success or failure of the relationship, it is important you go beyond perceptions and opinions and start to measure commercial performance. Perceptions and opinions are good indicators, but then politicking and ‘group think’ can often mask the real issues lurking below. Likewise, there are many examples where the relationship surveys describe a happy and perceived high performing relationship, only for it to be taken to a formal tender to test the commercial performance. This is when a more rigorous and quantifiable commercial relationship review is required. Read how we do it here
Looking for a better way to evaluate your agencies?
Wish you could measure, manage and maximise the collaboration, alignment and performance of your agencies? Find out how
The complexity of the new media and marketing landscape places increased pressure and demands on the role of the Media Agency. Media Agencies can now be required to craft intricate strategies for complex customer audiences, develop and manage dynamic automated trading models, work with data-driven modelling, deliver content creation and manage integration with other marketing service suppliers beyond the area of Paid in the Owned, Earned and Shared (POES) environments.
In our role as completely independent marketing management consultants we bring a holistic view to the veracity of the current relationship and performance of the agency partner. We benchmark and balance all of the factors that provide a platform for performance potential and delivery. The assessment examines structure and processes for efficiency, resourcing and remuneration for value, media planning and buying delivery for value and performance and assesses the contract to ensure it delivers relevant protections for both parties. Read the results here
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