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Children of the evolution

The desire to evolve is key to determining whether an agency will continue to prosper

In May of this year, the three leading associations for marketing, procurement, and agencies (ISBA, CIPS and the IPA) published the White Paper, Magic and Logic. Its aim was to redefine business practices to produce profitable growth for all. The document poses some crucial challenges for all parties.

Magic and Logic encourages marketing to: pursue the benefits of longer-term relationships with agencies and to be more open about objectives, facilitating greater creativity; take more responsibility for the management and direction of its relationships; and plan more effectively, enabling agencies to achieve more meaningful objectives.

Procurement is seen as key to policing marketing, a means of ensuring there is an appropriate remuneration framework to reward quality and creativity, and to enable efficiency. The document challenges procurement to be more open and to develop its understanding of agencies, in particular to gain a better understanding of an agency's contribution in terms of value creation.

But what of the agencies themselves?

They are urged to stand up to clients more, stop giving away their ideas for free and to put an end to undercutting the competition only to win unprofitable business. To do so, they are asked to change their thinking by concentrating on a client-agency relationship that secures greater trust and value.

In essence, agencies are being asked to reconsider the very substance they con-tribute to their clients' brands. With the future also presenting its own challenges, what are agencies doing to meet these new demands?

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Living in a box
The basic necessity of an agency is to ensure delivery of the next campaign. It is the single most important demand made of them. It is also the key expectation placed on the brand manager, whose state of mind will, inevitably, be defined by how smoothly they get there.

Following implementation, simple evaluations ensue to confirm that delivery achieved the desired measures of excellence. How well the campaign met the challenges of the brief and whether or not it was on time tend to dominate at this stage.

Latterly, post-mortems may look at whether it was greeted with satisfaction from the field, before the subsequent detail follow-up asks to what degree the messages were imprinted successfully on customers' minds.

With the brand manager at the sharp end of such a relationship, responsibility for managing the agency can often lie with them, particularly if their true expectation of the agency is campaign implementation.

From an agency's perspective, a life confined to implementation is fraught with danger. Under such circumstances, an agency should keep a watchful eye, for challenge may be just around the corner.

While an agency is restricted to delivering on a predefined list of materials (a list that is compiled by, and for, the client) the agency is unlikely to be able to do any more than meet with basic expectations. Exceeding that requires greater scope for response.

Satisfaction (I can't get no)
As launches become more infrequent, and thereby precious, and brand revitalisations become more competitive, it is crucial that agencies challenge clients' demands. It is key that they redefine clients' expectations upfront, to position themselves more favourably, and to bind themselves more tightly within the business unit.

The pitch arena dictates that an agency differentiates itself from its competitors in answering the brief and delivering on the set objectives. The client will work to see whether the agency has shown an understanding of the market, the brand and the challenges faced in attempting to overcome the customer apathy that drives their habitual behaviour. In this regard, the agency is on its own.

However, relationships work to a different set of rules. In a partnership, the client has an ongoing series of demands that must be met. How the agency delivers on these can be heavily dependent on the client's ability to arm the agency with the information it needs to meet those demands.

But is true partnership what is really on the table? Could it be? Should it be?

The simple truth is that partnership enables the agency to work to the best of its abilities. This is imperative, especially when the expectation is for something altogether more rounded from the agency. However, to be accepted as a partner, you have to qualify, showing the client what you are made of. You need to sparkle and shine, in essence, to demonstrate real value. For example:

  • Can the agency really create - are its solutions truly unique?

  • Can it deliver true insight - on the brand, on the customer, on the market?

  • Is it multidisciplinary - does it think cross-functionally?

  • Is it versed in new media - can it talk `digital'?

  • Is it a corporate asset - can it add value beyond brand?

  • Can it truly plan - does it inspire and help prepare for the year ahead?

Does not every agency aspire to have relationships based on partnership? In the end, the question is academic. So many agencies co-exist in the marketplace because there is no single dominant model of excellence. However, each agency must manage the client carefully, to create an environment founded on partnership that allows the agency full expression.

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Can you feel it?
Whatever the expectations of the agency, marketing and procurement (and also procurement and the agency) will undoubtedly have conversations upfront (and in review) to discuss `adding value'. Beyond the hours invested, can the agency quantify its contribution to the brand(s)? What is the intrinsic worth of the agency's input? Is its contribution a commodity to be haggled over, is it easily replaceable, or is there an inherent value to what it does that sets it apart from the competition?

Current attitudes may vary (probably based on individual experiences with different agencies). On the supplier side of the equation, every agency has clients they have worked with for many years. This suggests that either apathy reigns or there is intrinsic value placed in that relationship that exceeds the temptation to go prospecting. Both may also exist to some degree.

Without doubt, agencies could assist their clients more by helping to identify meaningful measures for the ideas they propose. That is not to say they should seek the impossible and take the uncertainty out of marketing, but rather, if an agency can demonstrate that its solutions aim to secure a particular, measurable advantage for the brand, then it aligns itself neatly with marketers who need to justify their actions with a clear return on investment.

Agencies need to explore new ways to quantify their impact. In doing so, they will inevitably forge more positive working relationships with procurement and ensure marketing has a strong voice when budgets are allocated. In the end, everyone wants to feel that they are a necessary part of the process. By devising more meaningful measures, they will be able to protect their businesses from the commodity arguments that persist.

Times, they are a-changin'
Agencies that show consistent growth (in terms of size by client numbers) demonstrate the desire to re-evaluate themselves, to ensure that they do not just continue to satisfy market needs but instead look to be a part of an evolution. Where this process is absent, you frequently see an agency in decline.

Technology plays a key role here. Biotech products represent solutions to ever more specific conditions and diseases. When marketing such products there is an increasing requirement to understand the science, making it understandable. Effective promotion must be sympathetic to the high-end science it works with. While these products may be greeted with open arms by the innovators who will be quick on the uptake, other customers may need gentle encouragement to fully appreciate the progress such products represent and the subsequent benefits they provide.

Moving forward, agencies must be comfortable with advances in knowledge and nuances of communication.

Digital media is also impacting on the pharma industry. As a growing number of healthcare professionals use the internet to source information, and companies look to appoint e-commerce directors, agencies are quickly acquiring the skills necessary to stay at the forefront of communication. In addition, with patients playing a more central role in their own care, effective use of the internet and even closed-network television is challenging agencies to show experience beyond the use of conventional tools.

To stay on top, agencies need to look critically at the skills they have previously relied on and decide whether these competencies remain core. The need to expand on capabilities, in order to sustain superiority, is crucial. Beyond development of in-house resources, or importing externally sourced `talent', alliances can be a route to enhancement. It is here that networks are truly tested. Agencies should ask themselves: are they aligned, is there real synergy that can add to the delivery on the brands that they touch? Where there is strong synergy, there is true potential.

The winner takes it all
Nobody is going to define the challenge. In a way, it is obvious. As more agencies appear, the need to differentiate weighs heavily on the mind of any agency's managing director (even if the route to evolution seems less clear). If agencies wait until they are dictated to, it may be too late. Hence, the desire to evolve is a key deter-minant of whether an agency will continue to prosper in the future.

If agencies see an opportunity and grab it, through due consideration and planning, they can expect to stand out vividly within an increasingly crowded marketplace. If not, they may wilt and eventually fade to grey.

Craig Mills is the director of brand planning at PAN Advertising (www.pancomms.com)

2nd September 2008

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