$2.2B Experiential-marketing agency revenue
When it comes to the evolving media landscape, advertisers have more choices than ever before with new formats, devices, platforms and data. They also require more specialized expertise from media agencies to help them navigate this rapidly changing media landscape. Often, there's a temptation to switch agencies in order to get more specialized services, or a different relationship with a new partner.
But pulling the plug on a media agency relationship involves much more than just switching providers -- it's more like pulling out the plumbing, ripping out the circuit board, and then trying to put it back together with incomplete instructions.
Is media really any more complex than creative? With its varied web of technologies and ecosystems, combined with a relatively limited choice of agencies, the media account is increasingly less portable. Conversely, in the creative world -- where there has been an exponential increase in high-caliber (and low-cost) creative and content providers, the prospect of change is potentially less daunting.
Agencies are highly focused these days on client profitability and cross-selling. The exercise of pitching is costly for clients and agencies -- with more compliance and legal processes involved for all parties. For advertisers, there could come a point at which the total cost of pitching (resources, business disruption, fees, etc.) will begin to outweigh the value of potential outcomes.
The fact is, pitches are not a one-night stand any more. They never really were. They require careful planning and extended governance beyond the life of the pitch process. A beautifully packaged "cherry-on-top outcome" can quickly unravel if the process is not underpinned by rigor and careful attention to detail.
Advertisers therefore should take on the question of whether to pitch or fix with great care. There are often valid and valuable alternatives to pitching, which involve advertisers having grown-up business conversations with their agencies -- where they refresh the existing relationship through a thorough review of the scope of services, value offerings and capabilities. Typically, such reviews would embrace what services are required and how they should be aligned; the best strategies to deploy in order to achieve more for the same; and what new or different capabilities can be applied to drive better outcomes. In our experience, proactively managing agency relationships can deliver up to twice the value of a pitch, based on a combination of real savings and improved outcomes.
Even better, matching communications needs to an organizational strategy helps advertisers decide what to keep in-house and what to outsource, and in what combinations. Having an organizational strategy will ultimately deliver longer-term and more robust relationships than a one-size-fits-all approach. Easy to say but challenging to deliver. Tto develop such a strategy, advertisers need to understand the role of media in all its paid, owned and earned forms, and strategically plan different models to determine the optimal solution.
Deciding whether to pitch is a moment of truth for advertisers. But they need to face up to the reality that they can no longer rely on leveraging agency suppliers when those suppliers have become bigger than their clients, and are now market-makers themselves. In this new world, clients must learn how to negotiate with their own agencies for a better market position and service. Most responsible agencies will respond well to a well-managed conversation, as it gives them cause to innovate, freshen up the team and recalibrate their service proposition. If all fails, there's still always the option to pitch.