It was probably inevitable: as digital marketing exploded and created the opportunity for hyper-targeting, more and more agencies have emerged as specialists within each new media channel. These specialists have littered the CPG landscape with sexy propositions leaving brand groups everywhere vulnerable to what I like to call “agency creep.”
I’ve seen it with my own eyes. Over the last couple of years, I’ve suddenly found myself in several annual marketing planning meetings, sitting across from four or five different agencies, trying to cobble together to the best possible plan (traditional, media, digital, PR and shopper are an oft seen lineup).
Worse, the same lineup might exist whether the brand has a budget of $30MM – or $5MM. Is there an optimal model for CPG clients to consider when choosing one ad agency or a portfolio of agencies? No. But a dose of common sense would go a long way to helping clients get greater impact from their agencies than they do today.
The ad agency category has gone the way of the rest of the world – with the creation of both giant global behemoths to serve giant global brands and highly specialized agencies filling a particular niche as media has fragmented into thousands of unique channels.
The result, for the most part today, is an overtaxed brand manager who is supposed to create and execute integrated marketing campaigns with a stable of agencies who have different areas of expertise, but with just enough overlap to create a constant source of friction and infighting over who gets what chunk of the client’s budget.
The agencies are asked to play nice in the sandbox, but they have every financial incentive NOT to do so. Often the roles look something like this:
- The “advertising agency” usually has the biggest chunk of the budget and has the first seat at the client’s strategic table in developing brand strategy. And the top account person from the “advertising agency” is under serious pressure from his or her boss at the agency to sell the agency’s developing capabilities in the high growth areas of digital and social marketing.
- The digital agency has tired of taking its cues from the advertising agency, is looking to lead strategically, and is now producing most of its content for the client in video form and asking, “why not just run this great work on TV”?
- The PR agency is arguing that social media is truly in its area of expertise and should therefore be stripped from the digital agency’s responsibilities and added to the PR agency’s. And while they fight amongst themselves, the work isn’t getting any better, everybody is having less fun and…
- …the Shopper Marketing agency is probably laughing all the way to the bank.
Sound familiar? Here’s my common sense suggestion to cleaning up this mess:
- CONSOLIDATION: Consolidate with one or two agencies (I’m accepting that a media agency will most likely be an additional resource). Outstanding marketers do outstanding work across categories and media channels. And you can certainly find one, or at most two, agencies that can deliver the right expertise across traditional, digital, social and PR for your brands. More than two agencies to cover those responsibilities and you’re probably causing the problem – not the agencies.
- COMPETITION: Say you’ve consolidated down to two agencies. Now a little healthy competition can be a good thing. At the year-end performance evaluation, don’t be afraid to shift some responsibilities from one agency to another if they have overlapping capabilities to reward a job well done and keep both agencies on their toes.
- COMPENSATION: Get your agencies (including your media agency) into the same foxhole with you. Determine the scope of work and cost of desired staff for each agency. Build in a base level of profit. Then let your agencies earn significantly greater profitability when they help deliver market results. Make sure the agencies’ higher profit goals are tied to those top line results that enable you to earn your own bonus. Now they have a financial incentive tied to market results, not just to getting more of your business. All agencies must share your risk and rewards. Don’t let any of them off the hook.
Give your brand managers a better opportunity for success. Just as you might want to clean out the hall closet this spring so you can get to what’s important, clean up the gaggle of agencies that’s creating clutter and confusion and try on a more streamlined and efficient model.