7 May 2012

Inside the post (“brand-agency-vendor relationships” on iMedia) - the angry R-rated version


My most recent post for iMedia (A manual for the brand-agency-vendor relationship) was like therapy; the output of many years working for multiple agencies and vendors. A polite nudge to all parties that times are changing and the current models are broken. This is the not so polite ‘between the lines’ version.

The media planner is too busy
In agency life I was primarily measured on the margin I could generate from the team I had, and could only hire new team members behind the curve, never ahead of it. The outcome was predictable and repeatable – media planners with too many accounts having to also deal with the agency’s new wins whilst we looked for new media planners to fill the gap.

And did you know a media planner commonly has between 7 and 12 accounts to deal with? Think about that – each client insists on an hour long weekly call which requires an hour long internal team prep meeting having spent at least an hour pulling reports and screwing around with Excel. If a media planner has 8 accounts then that’s 24 hours of their working week gone leaving just 1.5 hours to be ‘innovative’ for each client.

That simply doesn’t work!

Pay up or shut up
One the biggest problems that faces any vendor, and frankly almost any business, is cash flow – the books have to balance and that means getting paid promptly. I have a client today that is spending healthy amounts for prospecting with search retargeting and happens to be running it through their agency. From the client’s payment schedule the agency is receiving payment in full within approximately 45 days of invoice, we however are being paid between 90 and 120 days.

The client themselves has expressed concerns that the agency has become redundant for them, and has been reaching out to vendors to ask if they will work directly. It seems those vendors have taken this opportunity to vent their frustration at not being paid to the client, making them even more certain of their decision.

Everyone has become motivated to not work through the agency because of the behavior of the agency. Clearly this is a maddening situation, and not one that is ideal for anyone involved, but whilst the agency treats the vendors like crap, they shouldn’t complain when those vendors start to take action.

Agencies shouldn’t be treated like crap either
“Our agency” is a common phrase and whilst efficient, forgets that an agency is a collection of real people who have the same wants and needs as anyone else. And within an agency there are teams who work on specific accounts for their entire working week. The volume of the work, the level of interest these individuals have in their client’s business and the people with whom they share the task define their happiness. As does the way in which the client treats them - but so many clients seem to forget about this. They feel they are paying a fee for the service and that they can demand what they will.

In a recent discussion with a media agency executive they said that they walk around the office talking to the different client teams; some are uplifted, excited and engaged while others are quiet and disinterested. Those two teams don’t know how much the client is being billed or what the gross margin is, all they know is how the client treats them.

One of those two clients happens to pay a lower media management fee and has the less experienced agency team, but the client is fun to talk to and says thank you once in a while! As a result their media plans are better and their emails responded to in a timelier manner.

The response I got to this point from an old agency client in the UK says it best (us Brits have a way with words)!

“If you [the client] want the best possible service then don’t be a dick to your agency team. Are you motivated to get the best from your agency? Are you motivated to get them to be innovative, creative on your behalf? Don’t piss in their Cornflakes every Monday morning. Don’t be the source of their stress. Say ‘thank you’ once in a while. It’s a relationship like a marriage. What smart executives know about managing agencies is that they don’t do it to be nice, they do it because it’s good for them.  It’s not about how big your…” and we’ll leave it at that.

Quite.

Too many douche bag sales people
I would be amiss if I didn’t point the finger at the vendors for their part too. I often feel vendor execs think they are selling used cars, not media solutions. Why do you think some kid in a badly fitting suit, 16 slides of PowerPoint and a credit card to fund a night at a jeans bar is going to either represent you well or lead to long term relationships?

And with perfect timing, Andrew Ettinger just wrote an awesome piece on iMedia about these things that salespeople get wrong, saving me the job!

Come on then, what’s the answer?
I worked for a great guy several years back who used to drill into us the concept of Win/Win. It’s nothing new, but feels like it is many days. Enter into relationships with clients, agencies and vendors with the attitude of win/win and everything gets easier.

If you’re a client, don’t screw the agency down to the last possible percentage because the reality is your team will suck, not care and have higher turnover. Include the occasional thank you in your compensation the next time the team busts a gut for a media plan or creative unit that you insist you need for Monday morning but will then not use at all.

If you are the agency, make sure the vendor has room to breath and can make some money on the deal – we aren’t charities. The next time we have something innovative that could make you look cool, you are going to be bottom of the list if you pay the lowest amount.

And for vendors – realize that what you ultimately sell to the agency or client will reflect on them as individuals. Don’t cheat or bullshit your way to an IO or to a higher fill percentage because reputations develop fast, and with the rate media planners move around, you are soon going to be struggling for revenue.

Be nice people, we aren’t saving babies here, just pushing pixels around.


2 comments:

Andrew Girdwood said...

Always enjoy your post. I too feel there is a shift coming. Wait. Wrong. The shift is underway.

Here in the UK the affiliate network (technology) Digital Window entered a popular award as a Performance Agency (the category once called Affiliate agency).

They're owned by publishers (money from content) Axel Springer and PubliGroupe (not Publicis).

This raised questions; "What's the role of the agency?" We had a stab at answering that: http://blog.bigmouthmedia.com/2012/04/30/the-real-value-of-an-agency-in-affiliate-marketing/

At the same time, the DSP MediaMath also moved into the agency sphere. In Germany, MediaMath's agency expansion is backed by none other than PubliGroupe.

Forrester is marking "marketing technology" as the next $1B exit business. There's only been one so far; Omniture dodging the bullet and selling to Adobe.

If VCs are being geared up for $1B exits then there's going to be a tonne of cash coming towards the tech party. Agencies need to add value or suffer.

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