edition 62 october 20, 2006

selecting agency structures


With increasing complexity and opportunities in marketing communications channels, a rise in specialist providers in each of these channels and a disillusionment with integrated offerings, marketers are finding themselves managing more and more providers in their portfolio of agenies.

In this edition of P3-news, we look at the considerations that go toward deciding the best structure for your agency arrangements. With increasing options and requirements, one size does not fit all. But making the right decision can greatly improve efficiency and effectiveness.

In this P3 e-news...
developing the right agency structure
P3Biz running hot
- woolley's words
- new Top 10 music and more

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.


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.

p3biz running hot 


P3Biz is the business unit of P3 responsible for providing advertisers with cost benchmarks, remuneration and contract negotiation advice relating to their agencies.

Our most popular services include:
1. P3Biz Job Reconciliation Service
2. P3Biz Agency Rate Card Development
3. P3Biz Remuneration Modelling
4. P3Biz Advertising Cost Benchmark Service

Email georgia@p3.com.au for a proposal outlining the processes, costs and outcomes for any of these services.


woolley's words


Looking for a speaker to present at your next company conference or event? Do you belong to an industry organisation that needs a relevant commentator on industry practise?

For the past 7 years, Darren Woolley has been working with Australia's top advertisers and their marketing departments, and brings insight and entertainment to every speaking role from procurement to production.

Email people@p3.com.au for bookings an enquiries.


new Top 10 music and more



Our latest range of Top 10 lists has been released and will be mailed out in coming months. We have worked closely with Mushroom Music to bring you important insights into how to make music work better in your marketing.

New Top 10's to look out for are: Top 10 ways to get greater value from music in your marketing. Top 10 ways to avoid trouble when using music. Top 10 questions to ask a consultant before you engage them. Top 10 tips for procuring advertising services.

Make sure we have your mailing address, email georgia@p3.com.au

P3 - helping people achieve commercial purpose through creative process

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