Will the promiscuous relationship between clients and agencies ever end?
Don’t get me wrong - I love a great metaphor. But to be great it needs to work on a number of dimensions. When it does it has the habit of sticking around, becoming part of the parlance. Last millennium, when I entered the advertising industry it was common to talk about the relationship between a client and their agency as a relationship. As an industry we still do. Only recently I read a consultancy was offering matchmaking services. Another called themselves a client/agency relationship counsellor.
Most clients today are practicing polygamy with not one AoR, but any number of agencies, consultancies and suppliers.
Now I know around half of the marriages don’t last forever these days, but that means at least half do and that is significantly better than the typical client/agency relationship, which is destined to last the term of the pre-nuptial agreement or three to five years with roll-over options.
Yes, in the 20th century, I could see a reason for the marriage comparison. Clients were inclined to have fewer agencies and really only one main agency, known as the AoR or agency of record. These relationships were personal, significant and enduring in the best examples. Money was never a concern. There was a collective upfront agreement that somewhere better than 15% or more of the client’s spend would go to the agency without question because it was simply the way it was done.
But does that cozy relationship still hold true today? Or have circumstances changed so that the marriage metaphor is really no longer relevant?
Stepping into the 21st Century, certainly many of these relationships are still very personal, although we have heard some clients do not trust their agency partners like they once did when it comes to transparency. But considering fidelity, most clients today are practicing polygamy with not one AoR, but any number of agencies, consultancies and suppliers in their bed. Some have even opted for the convenience of having one more in-house into the back spare room.
Certainly, the relationship is no longer enduring. At least not like it was. Even in the case of longer-term relationships, it is routine to take the agency to pitch every few years just to make sure they are the one. Imagine turning to your significant other and suggesting that while you are both enjoying a productive and rewarding relationship you think it important to date other people for a few weeks, just to make sure you are the one?
Yet this is the practice procurement has bought to the marriage, with mandatory pitches at contract end, even when both client and agency are enjoying a productive and functional relationship.
Speaking of procurement, the loss of the commission system has moved the discussion of money from the background to daily consideration. Retainers, project fees, estimates, invoices, timesheets, reconciliations and more make it feel more like a transactional business than a marriage. Don’t be mistaken, finances can impact the health of any marriage, but what would you call a marriage where one partner pays the other for services rendered? I guess it depends on the services, but looking at the trend of agency fees in the past three decades it is clear to see who is getting screwed in this relationship.
Speaking of which, what type of relationship has a procurement process often hi-jacked by price? Extending the personal relationship metaphor, even sex-workers acknowledge that price is indicative of the quality of service or experience you would be procuring. So why should advertising agencies be any different? Would anyone choose a marriage partner based on the lowest possible price?
We are not saying that high performing client/agency relationships are non-existent. We know they exist, but they are not a marriage. More often than not they are a sound commercial relationship, built on mutual respect and trust, designed to meet the mutual needs of both parties. If the individuals on both the client and the agency like each other, or perhaps even love each other, all the better. At the core of every client/agency relationship is a commercial agreement that requires the maturity and mutual respect to discuss and negotiate as requirements and circumstances change.
By continuing to call it a marriage, we are effectively deluding ourselves to the reality of the relationship. Perhaps if we focus on getting the commercial arrangements right, then you can focus on making the personal (or personnel) aspects work. But expecting the agency and client personnel to overcome the failures in the commercial arrangements through the sheer power of their personal interactions and relationships means that often the commercial failures are never addressed.
So before you put your client/agency marriage in for relationship therapy, perhaps you should try an open and honest review of the commercial relationship first.
Darren Woolley is founder and global chief executive of TrinityP3