July 27, 2019

The following is republished with the permission of the Association of National Advertisers. Find this and similar articles on ANA Newsstand.

Relationships with agency partners can be complex. Marketers are not just buying widgets — they have a unique and constantly evolving need to build brands and communicate messages to an intended target audience. Agency partners must be able to adapt to meet those shifting needs while delivering a constant level of quality and service.

Adding to that complexity is the fact that such relationships can span multiple stakeholders, from marketing and finance to operations and procurement, even to other agencies. Each stakeholder plays a different role in the relationship, and each has its own set of objectives, but what unites them is the goal to increase brand value and revenue for the company.

Sometimes individual objectives may be in conflict with one another, but when all of the stakeholders are unified the group can elicit higher levels of value from the agency-partner relationship. One way to ensure stakeholders are unified is through an agency management program that's grounded in the functional aspects of the relationship.

A well-designed agency management program delivers relevant insights to all stakeholders for swift, effective decision making. Here's what it should involve.

Building Value from the Bottom Up

Like Abraham Maslow's concept of the hierarchy of needs, which describes how human actions arise from an innate desire to secure very basic necessities (i.e., food, water, sleep, shelter) before being able to satisfy their most complex needs (i.e., self-esteem, self-actualization), stakeholders must first deliver on the basic functional aspects of the client-agency relationship before they can deliver on higher-order elements.

Think of an agency management program as a four-level value pyramid:

1. The Functional Level

The functional level is the foundation upon which each of the other levels of value are built.

This base level includes functional aspects of the client-agency relationship such as consistency and standardization, data management, cycle times, and reporting. Compliance and adoption are also components of the foundation level. It's here that developing a robust scope-of-work process and establishing a performance-evaluation process may happen.

Once the foundational level is established, advertisers will see gains in process efficiencies and can begin to move up the agency management value pyramid.

2. The Procurement Value Creation Level

Once the scope and evaluation processes are established at the functional level of the pyramid, an advertiser will have greater data transparency and insight.

These quantitative and qualitative data sets can then be analyzed in tandem by procurement and marketing operations groups and used to drive optimization initiatives and achieve greater value for the organization. In addition, the scoping and approval processes can be expedited with the right tools and information.

While one of the roles of procurement is to negotiate cost efficiencies, it isn't only about savings; it is about optimizing value as well. Procurement now becomes an enabler for marketing during brand planning, by delivering insights and analytics based on historical activity and spend data.

3. The Brand–Agency Optimization Level

With the use of the combined power of qualitative and quantitative insights, advertisers can leverage both spending data and performance data to provide a more comprehensive understanding of agency relationships across the organization. Brand teams, for instance, can compare brand data from across their organization and identify trends associated with the agency partners used by the company.

Marketing teams can face complex decisions such as agency selection, agency conditioning, and business reviews using factual data with grounded insights rather than anecdotes or hearsay.

4. The Marketing Strategy Level

The pinnacle of the value pyramid is when advertisers use an agency management program to help inform marketing strategies.

Marketing and finance groups generally focus much of their time and energy on managing the brand's top and bottom lines, as well as evaluating media performance in the marketplace and understanding their ROI. The analytics and tactics for managing these aspects are highly evolved, but as agency management programs become more sophisticated and comprehensive, companies can pull this agency information into the equations to be able to provide a more accurate ROI at the deliverable or tactic level, thereby providing a total cost of ownership.

Traditional finance systems cannot drill below the brand level to evaluate ROI by brand tactic. This additional level of detail can help finance groups make budget decisions and can help marketing leaders make faster, more informed choices on channel mix goals.

Delivering Value on All Levels

Typically, marketing leadership sets its strategy and goals annually in order to inform the brand planning process in partnership with agencies. Ultimately, the aggregate of tactics any given agency partner delivers should drive and be aligned with the client's overall brand strategy.

A dashboard can alert marketing leadership in a timely manner if there is a misalignment between strategy and tactics. At a global level the agency management program should provide visibility into the work that all agencies are performing, allowing marketing leaders to identify synergies, duplication of efforts, or opportunities to use the information when quick action and communication is necessary for agency partners.

When leadership teams have accurate information readily available from an agency management program, they are better equipped to address business risks and opportunities.

For advertisers to optimize the value they get from an agency management program, all of the stakeholders need to be aligned to working toward the top of the value pyramid. Better marketing investments are possible when all of the stakeholders collaborate and optimize their agency management.

Robin Seasock (@seasockr) is the account director at Decideware, a partner in the ANA Thought Leadership Program.

 

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