The creation of a relationship contract, a standard ad-agency post of head of retention, and a 100-day charter committing agencies and clients to working practices within the first three months of their relationship were voted the most important measures to improve agency-client relationships, at the IPA’s "Alliances Adaptathon". This was the first in a series of Adaptathons – hackathon-style events – as part of IPA president Ian Priest’s agenda to drive commercial creativity through cross-industry initiatives.
The inaugural day-long Adaptathon was held on 3 October at Altitude London, hosted by BBC TV and Radio 4 presenter Evan Davis. Senior clients and their agency counterparts attended, talking about the benefits of a strong, long-term working relationship and the virtues of empathy. Participating clients included Avis, Aviva, Sainsbury’s, Eurostar, Marks & Spencer and Unilever.
Priest, a founding partner of VCCP, believes it is time to get serious about relationships. During the past 20 years, client-agency partnerships have fallen from an average of 7.2 years to just under three. Pitching is hugely wasteful; statistics show that agencies can spend up to £178,000 on any one pitch. It costs clients money, too, and distracts them from their everyday business. Added to that, agencies can take between six and nine months to "bed in".
A recent survey by relationship audit consultancy Aprais showed that great relationships create great work. There is a massive 37% improvement in output and performance for creative agencies when the relationship is good, and 21% for media agencies.
A poll at the Adaptathon asked the 200 delegates present whether they thought that clients got the agencies they deserved – 46% agreed strongly, 48% agreed and just 5% disagreed.
Priest was enthusiastic about the diversity of the audience. "It’s great to see not just agency people here, but clients, intermediaries and media," he said. "For the past few months we have been talking to individuals and organisations about the industry."
Stakeholders in the Adaptathon include an IPA Client Council comprising 12 senior marketers; the IPA Agency Council; industry bodies such as ISBA and The Marketing Society; intermediaries including the AAR and Oystercatchers; relationship audit firms; and the media, including partner Marketing magazine.
Following presentations from marketers, agencies and a behaviourist and psychotherapist expert, the audience was split into three groups to participate in hackathon-style "AdaptLabs", in which ideas for improving client-agency relationships were conceived and examined against three scenarios: start as you mean to go on; continuous improvement; and managing for changing relationships. The groups presented their key findings and the audience voted for their favourite.
Three key pledges were voted in to be carried forward, kick-starting 100 days of experiments between clients and agencies:
The key pledge to come out of the day was the concept of a relationship contract signed by both parties. Agencies and clients have legal contracts as well as annual fee agreements, but no agreed contract on how they work effectively together. The pledge was inspired in part by a precedent set by car-rental firm Avis, said a client spokesperson in one of the AdaptLabs. In the 1960s, Bill Bernbach, chief of Avis’ then ad agency DDB, sat down with the CEO of Avis and drafted a contract suggesting how both sides could work best with one another. The seven-point contract was founded on mutual respect and included an acknowledgement that Avis knew more about car rental than its agency, and DDB more about advertising than its client.
In the modern era, a relationship contract would not fight shy of articulating common goals and shared ambitions, expectations from both sides of what good behaviour looked like, how to manage the relationship with honesty and openness, what processes needed to be put in place to manage and monitor performance, and how to motivate and incentivise performance and build team-working, in the expectation that positive relationships offered incremental value to the joint business outcomes.
Head of retention
Another winning idea was the creation of an agency head of retention role, a subject that came up repeatedly. Priest argued that the existing agency models’ focus on new business – epitomised by the importance placed on the role of head of new business – was perhaps to the detriment of existing client relationships.
"Having a head of client retention would put a long-term value on client relationships," he said. "The idea is to change this slightly macho idea of new business." A head of retention would constantly assess the strength of a relationship, with periodical evaluation taking place on both the agency and client sides.
The concept of a 100-day charter was born out of a desire not to focus too much energy on the pitch process, and save some for the three months following a pitch. The charter would denote exactly what an agency and client should commit to in the first 100 days. It would examine aspects of the fledgling relationship, including managing the expectations of both parties and acknowledging the importance of open communication. Measures would be put in place to smooth the induction process, and form a consensus on working practices and social development. An interim letter of agreement would assure an understanding between the parties, while a more formal legal contract was under discussion.
What the attending clients said
In one of the opening debates, Gavin Patterson, BT’s new chief executive, described strong long-term client-agency relationships as "absolutely critical" to effective marketing. In another, Dominic Grounsell, personal marketing director at RSA Group and ISBA executive chair, supported the assertion that relationships should be long-term and not subject to constant pitching.
Tim Male, head of marketing at Lloyds Banking Group, agreed, adding that while getting the best price on marketing services was crucial, it should not be to the detriment of agencies. "Any client would want to get as good a deal [on price negotiations] as possible," he said. "But we are in a relationship where we want our agency to succeed as well."
Aside from the three key pledges that were voted on by delegates, other ideas to gain real traction included the appointment of a head of transition by clients and agencies to help establish the basis of a new working relationship after a successful pitch. The involvement of client procurement departments from the beginning was also popular, as was studying best-practice models in managing multi-agency models to reduce tension, conflict and lack of clarity. Above all, it became clear that joint training in relationship management skills should be provided for client and agency staff.
The aim of the game
"Where are we hoping to end up?" asked Priest. "Really, the whole idea of client confidence in agencies is to demonstrate what creativity brings to the party, to increase the standing of marketing and communications in the boardroom and boost the confidence of the industry."
The aim of the first Adaptathon was to set the "agenda for a programme of experiments", added Priest. "Lots of small ideas could be making a difference in how we manage relationships. We kicked off ‘Adapt for Commercial Creativity’ earlier in the year, but this is the first actual event; we are now looking at turning those ideas into actions."
The key themes that emerged from the day were based on creating a culture of honesty, open communication, recognising mutual interests and ensuring people are skilled in the handling of personal and organisational relationships.
The IPA is also offering free relationship counselling with counsellor and psychotherapist Alison Bone.
Looking ahead to the rest of Priest’s presidency, he will address diversification, agility, profit/payment, a call for less time-based and more value-based remuneration, and talent/training, with a focus on evolving the agency-client business model.