MARKETING FOCUS: Divided they stand

New research shows that the rift between clients and their advertising agencies is as deep as ever - and below-the-line agencies could be heading the same way

New research shows that the rift between clients and their advertising

agencies is as deep as ever - and below-the-line agencies could be

heading the same way



Clients and agencies are at last managing to smooth over their

differences - or at least that’s what recent public pronouncements might

suggest.



The past month may have seen Bartle Bogle Hegarty’s less than saccharine

split with Cadbury, and Ryvita eating through agencies at a rate that

would have other clients worrying about their waistlines, but at least

clients and agencies now acknowledge each other’s problems.



ISBA and the IPA got together for a conference in November for the first

time to smooth the relationship. They also issued the first joint

guidelines on the pitch proccess, which has been a major bone of

contention with agencies for many years. ISBA’s director general, John

Hooper, went so far as to invite the ad agencies to report to him if a

client should stray fom the straight and narrow.



Some clients, such as Grand Metropolitan, have made public their

intentions to shift the buyer/seller relationship to a more even keel,

while others, such as Rainey Kelly, have tried to tackle the problematic

issue of remuneration.



But despite all this new evidence suggests that, in too many cases, the

marriage between agency and client is as unhappy as ever.



Research from the annual Marketing Forum conference, published here for

the first time, shows that behind the smiles, feelings still run high.



The research was put together from a series of qualitative research

groups representing more than 250 key figures from both sides of the

divide.



One of the first things it proves is that, behind closed doors, the

criticisms come thick and fast.



Advertising agencies are still widely attacked for being ‘too precious’

creatively and for failing to appreciate the commercial realities of the

90s.



It’s a concern that has been exacerbated by the recession and the main

issue remains cost - whether to pay by commission, fixed fee, by the

hour or even by performance.



Complaints about accountability, which have become common since the

start of the decade, still ring true.



‘Is there a disparity between the way we operate and the way the agency

operates?’ asks one client. ‘All the other hours I put in, I don’t get

paid for. But with the agency, you have to pay an already expensive

hourly rate and every extra minute. And there is a kind of angryness in

there: I would love to earn their money.’



A second adds: ‘If you brief the design agency or brand development

agency, you agree a project. They don’t show you all the hours before

they agree a fee. The time sheets that the ad agency shows you are their

problem, not yours - as long as you have agreed the project fee. More

and more we are trying to push our agency to agree it up front.’



When it comes to relationships breaking down with agencies, the main

cause seems to be a perceived lack of professionalism: unreliable

delivery is given as the top reason, ahead of lack of personal chemistry

and poor creative performance.



Agencies, on the other hand, feel desperately insecure because of

budgets being cut at short notice, poor-quality briefings, the rapid

turnover of client personnel, and the lack of professionalism and

honesty in the pitch process.



‘I get the feeling things have got promiscuous with the squeeze on

money,’ complains one agency.



Another, somewhat optimistic agency, describes the ideal situation as

Fred Astaire and Ginger Rogers ‘Because when it does really work, you

really enjoy being together and doing it well.’ It’s worth noting,

though, that Fred and Ginger lost their sparkle many years ago. That

there is the need for change is just about the only thing both sides

seem to agree on.



What is clear, though, is that agencies won’t be able to ease the

relationship by developing a through-the-line approach in order to take

a closer and more strategic role. Comments from clients on the subject

include: ‘My feeling is that you can’t be a brain surgeon and a

chiropodist’ and ‘It’s a lovely dream to have one supplier that can do

it all. I don’t know how realistic it is’.



The Forum research suggests that clients prefer to work with a group of

specialist agencies; to get them into a room and encourage them to work

together.



So what is the solution? The answer is depressingly simple: to

communicate properly and discuss problems with honesty; to have

transparency of costs and profits from both sides; to have clear

objectives from the start; and, finally, to develop some personal

chemistry. If it’s so straightforward, why aren’t we all getting it

right?



A working example of one relationship which does seem to click is that

between McDonald’s and Leo Burnett - now celebrating their tenth year

together.



John Hawkes, vice president chief marketing officer for McDonald’s,

says: ‘There are no secrets as such.



In our case I believe that McDonald’s and Leo Burnett have quite a

similar culture. It was a lucky coincidence. It’s like a marriage. If

you have fundamental beliefs then you remain married even if you have

arguments.



‘Leo Burnett has worked hard to match our thinking,’ adds Hawkes. ‘We

view the agency very much as part of the department. They are involved

as much as we are. They come to all the meetings. It helps

communications immensely. And we don’t just see the account managers.

The creative people are exposed to us too.’



As an adjunct, below-the-line agencies seem to think that things are

better now than they have ever been.



One comments: ‘I can’t think of a time that we have had better

relationships than we have now. I don’t think we have a problem. I think

that it’s the advertising agencies which have the problem.’



A second agrees: ‘I read all these articles about the breakdown in

agency/client relationships and I sit here and think, ‘It hasn’t

happened to us’. And it is probably the same in sales promotion. The

above-the-line relationship is more intense - you work solidly for three

months on a campaign, and then it is all quiet. For us, I should think

we talk to our clients anything up to 20 times a day, almost every day,

and you can’t fail to pick up if there is a problem.’



The reasons behind this cheerful state of mind among below-the-line

agencies would seem to be simply that they’re not yet big enough to be

too arrogant.



As the direct marketing and sales promotion industries take a larger

slice of the marketing budget (see graphs, left), they are talking to

higher ranking clients and taking an earlier role in strategic

decisions. As such, they tend to be moving from supplier to partner in

much the way that advertising agencies have been for many years.



Evidence of this change can be found in the slashing of rosters held by

some of the larger clients. In recent months, the RAC has reduced its

shortlist to one (GGT Direct) while Barclaycard cut its 20-strong roster

to just Barraclough Hall Woolston Gray, and Osprey.



‘There is a growing maturity in both agencies and clients,’ says Alan

Bigg, deputy chairman of the Direct Marketing Association and chairman

of agency Brann.



‘Handing out direct marketing on a project basis is a dwindling

practice. Five years ago, agencies would be commissioned to do a

specific mail pack but they are now looking at a client’s data and

covering a far broader programme of initiatives.’



But below-the-line agencies should enjoy it while they can. If their

relationships are moving closer to that currently occupied by

advertising agencies, they could have a thorny future ahead.



------------------------------------------------------------------------

THE BAD NEWS

------------------------------------------------------------------------

Factors likely to result in a breakdown of relationships with suppliers

of marketing services

                                       Delegates 1995

Unreliable delivery                          48

Lack of personal chemistry                   44

Poor creative performance                    40

Lack of proactive thinking                   34

Poor communication                           26

Lack of strategic input                      24

Going over budget                            23

Poor business results                        19

Inability to learn from experience           19

Overpriced production                        14

Short-term project approach                   7

Withholding information                       6

No regular appraisals                         2

Uncompetitive media buying                    1

Other                                         3

Not stated                                    1

Total answers                               311

Total delegates participating in survey     100

Client opinion



‘What I get aggravated about is that we started off by saying, ‘This is

the budget. FULL STOP. Everything included - production costs,

everything. We are being totally open with you, but don’t spend a penny

more.’ And then you get suggestions coming back that are totally

unaffordable. Is anybody out there hearing me?’



‘If you start off on a bad footing, where they think they are being

screwed, it is not going to work well for you either. We are caught.’



Agency opinion



‘The client not thinking through what they want in the first place,

which affects the clarity of the brief, and then changing either brief

or budget half-way through. Yes, the chairman’s politics and the

chairman’s wife rejecting something just because she doesn’t like it.

Changes in personnel on the client side. Unrealistic deadlines and

appreciation of time taken, and not allowing the agency to get involved

enough in the business.’



‘The commision system has virtually died. There is no currency to

replace it and most clients haven’t got a clue.’

------------------------------------------------------------------------



------------------------------------------------------------------------

AND THE GOOD...

------------------------------------------------------------------------

Factors likely to result in promoting a positive relationship with

suppliers of marketing services

                                       Delegates 1995

Mutual trust                                 51

Creative excellence                          47

Understanding the brand                      46

Proactive thinking                           38

Long-term partnership                        23

Working within budget                        20

Continuous improvement                       20

Planning effectiveness                       19

Senior management contact                    16

Respect for deadlines                        15

Full sharing of market data                   7

Two-way annual appraisals                     4

Financial transparency                        4

Media buying clout                            2

Other                                         3

Not stated                                    1

Total answers                               317

Total delegates participating in survey     100



Client opinion



‘The issues are many, so I think the key thing is the regular

communication of big and small issues. Talk. Be tolerant. Understand

each other.’



Agency opinion



‘A good partnership is transparent. A good partnership is where both

sides know where they stand on every issue, and that transparency of

information has to include money as well. I think most clients will say

that they really like their agency to make money. A good partenership is

where they do have an understanding of exactly what is involved.’



‘Having quantifiable, measurable results and actually doing the

measurement - not just saying the right words, but actually doing it -

and understanding what went right and what went wrong, and actually

facing up to problems.’

------------------------------------------------------------------------



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