developing the right agency structure for your needs

Considering your agency resources and structure? Do you have a single supplier, a panel of agencies, or a main agency with smaller ancillary providers? Do you segment the responsibilities by discipline, by product, by segment? There are so many options and the current wisdom seems to follow cyclical trends. So what is the right structure for your business?

size and volume The first issue is to consider the size and volume of your requirements. Having a number of agencies can be inefficient if you have low volumes for any one agency. There is a base cost for each agency just to have your account, even when the volume of work drops to almost nothing. This is the base cost that is duplicated across all the agencies on the roster and the cost that is realised when advertisers consolidate from a panel of agencies to one provider.

segmentation If you have a large number of brands or audience segments then it is often justified having a range of providers working on different product segments and different audience segments. One of the advantages is that each agency is focused on managing those brands. Of course one agency could have a number of different teams within the agency working on each product or audience group. But the other advantage some advertisers prefer is the ability to play one agency off against the other and to not have all their “eggs in one basket”. But again, this has to be balanced with the cost effectiveness and the resources required to manage a number of suppliers.

specialist skills Where an advertiser requires a number of specialist disciplines, such as retail, B2B, agribusiness and CRM, often these are difficult to source from one supplier. While many agencies will offer a range of services, it is difficult to find a wide range of high quality specialist services within one agency. But again, it is important to really consider the volume of work required in these specialist areas and balance this against the need for the specialist services.

current agreements Some advertisers do not have concerns regarding the structure of their agency relationships as they are locked into multinational agreements with a particular agency network. Yet even within these seemingly rigid agreements, there can be opportunities to create a more dynamic creative relationship through the appointment of a second independent agency for project work.

the ideal structure As stated, there are a wide range of possible structures and combinations. The right structure depends on the specific needs of the advertiser. P3Biz has extensive experience and benchmarks to be able to assess your current arrangements and model and highlight the strengths and weaknesses of a number of structural options for your consideration.

To find out more on this topic, book your place at next weeks Webinar on “Trends in Marketing Communication & Collaboration” – Wednesday 25th October, 2006, 1pm AEST. Log in over the web to see Darren Woolley present his ideas on new management techniques and tools to allow you to better manage your marketing portfolio. Click here to view a trailer for the webinar or to register now. Or to find out more about the right agency structure for your needs, contact biz@p3.com.au or call Sydney 02 9279 4997 or Melbourne 03 9682 6800.

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