Last week\u2019s Cog Blog post, on what the agency of the post-pandemic future might look like generated some interesting feedback. This week\u2019s post tries to provide some suggestions (answers would be presumptive) to the points raised, based purely on my own experience. I\u2019ve grouped these around four of the most popular topic areas.<\/p>\n
As with anyone buying any service, advertisers want many things from their agencies, and certainly good value is one. But increasingly there\u2019s a recognition that value is not the same as cheap.<\/p>\n
Agencies should promote this sentiment, although they far too often fall into the trap of pitching cheap. This Forbes piece<\/a> on what they see as the forthcoming decimation of the business makes the point well.<\/p>\n Over the years BJ&A has conducted several consultancy projects for different organisations that have involved face-to-face, one-on-one interviews with a range of advertisers.<\/p>\n What we\u2019ve found, time and time again is that advertisers want their agencies, of all shapes, sizes and specialisms to be open and honest on what and how they charge.<\/p>\n One large financial institution recalled how they were taken through the detail of how a research supplier charged out its staff\u2019s time, and subsequently monitored time spent, and out-of-pocket expenses.<\/p>\n The advertiser\u2019s point to us was that they appreciated the open-ness explaining the agency\u2019s business model and how it was applied in their case. At the end of what was admittedly quite a lengthy but informal \u00a0process they felt confident that they were paying a fair rate for the service supplied.<\/p>\n \u2018Transparency\u2019 isn\u2019t only a contractual matter concerning rebates and kickbacks, it\u2019s as much about open-ness and honesty in all aspects of the relationship. That\u2019s what builds mutual respect and trust.<\/p>\n Clients want to understand the benefit from any service they buy.<\/p>\n If the agency can\u2019t explain the benefit how can the client understand it?<\/p>\n This is in large part a problem of the agencies\u2019 own making \u2013 for years they charged low fees knowing full well that they would make their margin from media vendor rebates and kickbacks.<\/p>\n The agencies now have the unenviable task of trying to charge for something they used to give away.<\/p>\n One solution is the menu approach. The agency clearly lays out from the start what it will provide for the base fee; and attaches a priced menu of additional services.<\/p>\n If the client really only wants the basics, then that\u2019s what they pay for; but inevitably over the course of the contract extras are requested, added, and paid for.<\/p>\n It takes organisation, commitment and a confidence in what\u2019s being charged but I\u2019ve seen this applied successfully in several agencies and across different geographies.<\/p>\n\n
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