Relationship troubles


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As might be expected during an economic downturn, agency remuneration is a strained topic of conversation, and it's impacting the client-agency relationship.

“It's a big hairball,” said Blocklin. “Absolutely there are clients who have experimented with pay-for-performance models based on hard and soft measures. It's not a panacea, but it keeps the agencies hungry.”

Blocklin added that the new digital landscape may actually produce greater revenue for agencies dependent on the results of their campaigns. Targeting carefully identified, small pools of b-to-b buyers may cause budgets to shrink, she said, but the greater specificity of those narrow pools of interest can produce higher conversion.

“The agency is doing the same work to reach a narrower audience,” she said. “But now you get them. That can mean you'll have a positive ROI.”

Adding to remuneration pressures is the rise of procurement departments overseeing marketing expenditures.

“Sometimes you get these hilarious RFPs,” Miller said. “I got one from a New England bank asking for the cost of a full-page color ad. That just shows they don't know what they're talking about. Professional procurement departments like these are used to buying steel, not ideas and services.”

The Four A's' Finneran agreed, but said he sees improvement ahead.

“There is an unproductive focus on costs rather than on the benefits of marketing, but I think people will begin to refocus,” he said. “People don't market to save pennies. They market to earn dollars. Procurement is in its heyday now, but that will change as growth returns.”

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