200 CHAPTER 7 THE ADVERTISING INDUSTRY

Agency appointments might not always result from pitches and as Jones (2004) reports, nearly one-third of clients move their accounts without involving pitches. One of the reasons for this is the increasing cost involved in running the whole process, as much as £50,000 according to Jones. Indeed, Wethey (2006) questions the whole validity and effi cacy of the pitching process. He argues that many pitches are a waste of resources (time and money), that too many agencies devote too much of their resources chasing new business, that pitches do not solve client problems and that the whole process is often unrealistic.

The agency selection process is fi nalised when terms and conditions are specifi ed in a mutu-ally agreed contract . Examination of trade journals such as Campaign, Marketing and Marketing Week will provide regular announcements of agency appointments.

Developing and managing agency relationships

Once an agency relationship has been established, the client and the agency will establish operational teams, systems, contracts and reporting lines. The key roles played by agency staff have already been outlined above.

A successful relationship is built on trust and commitment. As indicated earlier, agencies are often selected on the basis of personal compatibility between individuals in the respective teams. This requires mutual trust and commitment for the relationship to fl ourish. It is often

Some of the contents of a typical agency briefing Table 7.2

Topic Explanation

Current situation The history of the brand, previous campaign successes (or failures) and the reasons for mounting the new campaign

Promotional objectives

Having set your marketing objectives (often expressed in terms of sales volume), you then have to address the promotional objectives. These will vary according to your overall plans, but could include:

To encourage product trial

To raise awareness levels

To encourage direct sales

To increase distribution outlets

Target markets A good definition of the target market will include not only socio-economic details (e.g. age, class, sex), but also psychographic information on users. This will have a bearing on the nature and tone of the promotional activity, its overall focus and content

Product/service In providing your agency with a detailed brief, this section is very important. It should include any original research results or focus group research to establish what the perceived benefits are, so that these can be promoted strongly, both visually and in words

Budget The budget should be carefully planned with consideration given to your total budget as it often includes funds not only for the cost of the media, but also for the production of promotional material

Competitors You should know your competitors and their products as well as you know your own. Make it your business to find out and include the results of your findings in your brief

Timescales This should include the start date of the campaign and the period over which it is to run. Media scheduling will play a vitally important role at this stage, with the need to establish the consistency of the campaign in terms of the ‘drip–drip’ approach or indeed the necessity for a ‘burst’-style campaign

M07_FILL0894_01_SE_C07.indd 200M07_FILL0894_01_SE_C07.indd 200 03/08/12 11:40 AM03/08/12 11:40 AM

ADVERTISING AGENCY SELECTION 201

the strong relationships that exist between individuals that lead to agency changes when client managers leave one organisation and move to another and transfer their agency alliances.

Spanier (2010) reports on examples of agencies that have retained clients over long periods of time. These include Abbott Mead Vickers, which has worked for retail supermarket chain Sainsbury’s for over 30 years; and DDB, which has held the Volkswagen car account for more than 25 years. On a much longer scale, JWT has had Shell as a client for approaching 50 years, Rolex for over 60 and Unilever for over 100.

The changing nature of the advertising and media landscape seems to have driven many clients into seeking changes in their agency relationships, including the frequency with which they make changes. To some extent this results from a change in the way fi rms relate to and communicate with their customers, often in a more personal and direct fashion, which alters the basis for communication away from a mass context to an individual one.

As we have already indentifi ed, many agency–client relationships are based on the establish-ment of global networks requiring sophisticated communications between client and agency personnel. Advances in technology now enable such communications to take place rapidly and with signifi cant levels of complexity. Time spent in arranging face-to-face meetings to discuss plans and creative work can now be undertaken using fi le transfer protocol (FTP) sites which allow for signifi cant volumes of data to be accessed and worked on by a number of parties. Microsoft’s SharePoint provides secure platforms with collaboration tools for sharing ideas and business information.

Agency Assessments International (AAI), a consultancy operating in the advertising industry, have developed what they call an agency relationship optimiser (ARO). This service is offered to clients wishing to identify potential problems with their agencies. It can be applied in a number of different ways: as a diagnostic tool, as a best practice measurement device or for campaign management and control purposes. The ARO system provides regular and mutual evaluation, monitoring and feedback. It is an online process that can be tailored to match individual client needs. Figure 7.5 identifi es the key elements that the ARO system includes.

The client–agency relationship may be seen in the context of the network of organisations and structures, as well as the exchanges or interactions that occur within that network. These interactions relate to the activities that are undertaken with the resources available, against the agreed strategic, marketing and communications goals. The quality of the agency–client rela-tionship is a function of trust, developed within this organisational network based on mutual confi dence. Commitment is derived from a belief that a relationship is worth continuing and that maximum effort is warranted to maintain the relationship (Morgan and Hunt 1994). The changes in remuneration systems discussed below have also resulted in a new focus for the client–agency relationship, most notably the shift toward payment based on results.

• Skills set approach• 360-degree review• Identification of priority issues

• ‘Share of vote’ allocation to reflect most significant opinions• Web enablement for comparisons across brands, markets and agencies

• Automatic collation of qualitative commentaries• Aggregation of quantitative scores• Online action plans

The agency relationship optimiser (ARO) Figure 7.5

M07_FILL0894_01_SE_C07.indd 201M07_FILL0894_01_SE_C07.indd 201 03/08/12 11:40 AM03/08/12 11:40 AM