From RFP to Contract, How to Review Your Agency #EMPOWERBL16
From RFP to Contract, How to Review Your Agency
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Presenters
ACCOUNT DEVELOPMENT MANAGER
EMILY TUCZINSKIMANAGING DIRECTOR,
MEDIA VALUE
MARGARET LEWIS
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This session will cover…
Media Agency Review Trends
Agency Review Process
What Separates the Winners from the Losers?
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4
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Why Should you Review?2
Media Agency Review Trends
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Similar offerings
The Media Agency Business…
A very competitive business
A pitch presentation
Similar skillsHeavy scrutiny on cost of this large budget line item
important part of the process of choosing an agency, doesn’t generate sufficient insight to make a decision in today’s complex media landscape
The average client-agency relationship is 2.8 years…
Source: http://www.mediapost.com/publications/article/269966/top-reasons-agencies-lose-pitches.html
while the average CMO tenure has doubled from 2 to 4 years.*
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Media agency reviews have surged
“Mediapalooza”
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Typical trigger for agency review: Change.
Whether good or bad, it’s time to re-assess when there’s…
New leadership
Significant change in business results
Media Disruption
Disruption in Digital
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Transparency & IntegrationA more integrated approach between traditional and digital media
Advertisers are open-minded to programmatic buying – but with real concerns about financial transparency, data ownership and access rights.Not unusual for a majority of a digital budget to be in non-working media.
What’s in the advertiser’s interest?
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Elevated role of Procurement
Financial crisis in late 2000s
Work alongside media teams
More actively involved in pitch
Financial crisis in late 2000s
More actively involved in pitch
“A former Agency Holding Company executive who left the industry within the last two years
reported that, approximately ten years ago, client media pitches were led with discussions about campaign strategy and an agency’s ideas. He
reported that this dynamic has now shifted to one in which discussions about price take the lead.
He noted that “many” clients entering into pitches currently send out large spreadsheets asking
agencies to produce detailed pricing information in advance of a presentation on strategy. He describes
this practice as a “buying model, not a thinking
model.”- ANA Media Transparency Initiative, Part 1
Work alongside media teams
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Need for data-driven adviceConsultants can be a critical resource to assist in the pitch process which is often overwhelming.
Definition of Scope
Success criteria
Media pricing / incentive frameworks
Staffing & compensation
Shepherding the Process
What We’ve Learned About the Pitch Process
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The Pitch ProcessThe advertiser takes on an ever-increasing responsibility when launching a review.
Understand that it will be complex and time-consuming
Respect the effort that will be put in by the agency
Take responsibility for the outcome
Ensure stakeholder alignment
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Global vs. local
Recommendation:
Procurement has stronger role at the Global Level, while the Local market clients may favor an agency with better strategy and team chemistry that will blend well with the local team.
Understand each others objectives
Make an extra effort to engage procurement
Share your work
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The Chemistry FactorAn undervalued factor during pitches is chemistry.
Consider this as important as the pricing or the strategy tools and buying tactics being shown
Make time for getting a feel for culture; consider whether the culture & chemistry check should happen at the beginning or later in the process
Identify the specific people that might work on your business
Recommendation:
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Factors of a winning pitch
Chemistry
Answering the brief
Challenging the brief, with a strong rationale
Differentiation
Aggressive pricing, both compensation and media pricing
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Popularity of PRIPs Three main components of a Performance Related Incentive Plan that holds the agency accountable and incentivizes the agency to improve.
Agency Service
Media QualityMedia Cost
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Popularity of PRIPs Strong upward trend in use of Incentives; increasingly important to validate performance
*Note: Sample size = 98 marketers; 1,011 client-agency compensation agreements
1991 1994 1997 2000 2003 2006/7 2010 20130%
10%
20%
30%
40%
50%
60%
70%
13% 19%30% 35% 38%
47% 46%61%
Use of Performance Incentives
Importance of Contracts
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Importance of ContractsAs part of the ANA and Ebiquity recommendations, several factors to ensure a solid contract…
Expired/Unsigned Contracts
Contract Content
Contract Audit Rights
Contract Governance
Advertiser Responsibilities
As advertisers are held to a higher level of accountability every year, they need to be…
confident that their media agency partners can deliver on their promises
clear and realistic about their objectives
prepared to give the agency a genuine opportunity to be a partner in their success