Pandemic puts indelible stamp on brand-agency relationships

If there is any lasting effect from the pandemic on the ad business, it’s the acceleration of the changing relationship between agencies and clients. Working from home has leveled the playing field for the industry, making it increasingly evident that shops do not need to be as physically close to their clients as once presumed. Take, for example, Procter & Gamble Co., which had been encouraging agencies to put outposts at or near its offices in Cincinnati, Singapore and elsewhere. That allowed shops such as Cincinnati independent Curiosity to receive new opportunities. But one of those new accounts—P&G personal-care brand Native—became a lesson in how the pandemic has rendered proximity largely meaningless. The brand’s marketing team was actually based in San Francisco when Curiosity originally got the assignment in late 2019. But Moiz Ali, the founder-CEO who started the relationship, left just before the onset of the pandemic. Curiosity then won over a new P&G team split between San Francisco and Cincinnati. And by last summer, the agency developed a new digital and connected TV campaign entirely within a virtual world where the folks in Cincinnati were as distant as the ones in San Francisco. Curiosity has since picked up 10 more new accounts during the pandemic, all with remote pitches and onboarding new clients via video, most of them out of town. At least some of that would have been unlikely to happen without the leveling effect of a pandemic that put all agencies essentially in the same place—on Zoom or other videoconference screens. “When we started the firm in 2010, location was a very big issue,” says Curiosity CEO Matt Fischer. “From a credibility perspective, for ease of work, location mattered. I would say that’s the exact opposite today. What this has shown us is you can tap talent wherever it is.” Power of proximity fades Remote relationships also have been a boon on the other side of the country for Portland, Oregon-based Opinionated, which was always a plane trip away from most clients. Opinionated has seen a host of recent account wins, with new work from PepsiCo, Peet’s Coffee, sports betting app Tipico, nutritional supplement Six Star and biologics manufacturer Zymergen. “We’ve had a couple of pitches where they’ve made remarks about location,” says Opinionated founder Mark Fitzloff. “But compared to a couple years ago, where we’d naturally assume they’d have to be open to a West Coast agency or specifically whatever town they were in, it’s really kind of a non-factor.” Opinionated has participated in pitches “we would have talked ourselves out of before, because they said they’d prefer someone close to New York or L.A.,” Fitzloff says. “We don’t think about it anymore, because I don’t think clients think about it anymore.” RSW/US, which handles business development and lead generation for many medium and smaller agencies based outside major coastal hubs, finds its agency clients have won 46% more business so far in the first quarter of 2021 than in all of the year-ago quarter, says CEO Mark Sneider. “It has helped break down this rational barrier marketers have had about wanting to work with big, recognizable agencies closer to home.” As it gets easier to envision a world where COVID-19 vaccination is nearly universal, offices fully re-open, business travel becomes an option and in-person schmoozing continues, the question is how much pre-pandemic practices and preferences will return and how much work will remain remote. But almost no one expects things to go back to quite the way they were. “By the time things get back to normal, I think we’ll all have forgotten what normal is,” says WPP CEO Mark Read, who hasn’t left London during the pandemic and has been managing his far-flung agency holdings and client relationships remotely. He expects many practices fueled by the pandemic to persist, with more remote pitching and relationships. Agencies and marketers will think much more strategically about how they connect with people and take advantage of technology, Read says. Working remotely has actually fostered improved relationship building in some cases, he says. “I’ve got one client where the CMO and chief creative officer meet every morning over their respective breakfast tables and discuss scripts,” Read says. “That would never have happened in the past. It would have gone through maybe several layers of account people. We’ve produced work in eight days that in the past might have taken eight weeks. And in the case of ‘GirlUp’ [a video by Ogilvy showing girls watching and celebrating the inauguration of Kamala Harris for the United Nations Foundation], it was eight hours.” Theories of a leveled playing field aside, WPP shops won 47% more business in 2020 than in 2019, Read says, “so we’ve been doing something right.” Less travel, more face-to-face Read hasn’t left London during the pandemic, but he notes that when he analyzed his diary, he’s spent 75% more time with clients the past 12 months than he had the previous 12 months. So while WPP plans to keep a lid on the amount of travel even post-pandemic, Read says, “we’re looking to spend more time with clients.” Travel and face-to-face meetings will come back, Read says, but it’s likely to be more meaningful trips. “I think what will change most are the day trips,” Read says. “I’ve seen statistics that a third of all business travel are one-day trips. And I think a lot of that will be replaced by video meetings.” Remote pitching has eliminated some excesses of the pre-pandemic business. “Three years ago, we did a pitch for one of the studios in L.A. and we sent 40 people,” Read says. “I don’t expect to do that in the future. In the future we’ll have three or four people in the room and dial in people from around the world. We’re going to live in a much more hybrid world.” And Read says it’s very much possible to start client relationships remotely, not just sustain them. “In many ways, it’s more personal talking to people in their dining rooms or kitchens or wherever people are working from,” he says. WPP’s VMLY&R recently won the Sam’s Club account on a virtual pitch with five contestants. Realistically, bringing five shops to Sam’s headquarters in Bentonville, Arkansas, an expensive air travel hub with limited direct flights, wouldn’t have been easy. And the virtual experience has the benefit of putting the emphasis on each individual speaker, which can sometimes get lost in a pitch room with 20 people, says Tony Rogers, senior VP, chief member officer, Sam’s. “We’d rather be in person, but what we found is that you really got to test chemistry,” says VMLY&R Global CEO Jon Cook. “The final meeting felt like an exchange of ideas, not a presentation.” Flexibility rules While co-location was driving agency decisions and relationships pre-pandemic, flexibility is a key watchword now and in the future, says Procter & Gamble Co. Chief Brand Officer Marc Pritchard. “We won’t be going back to how we worked pre-COVID,” Pritchard says. “We want maximum flexibility based on the job/work to be done. From there, we’ll bring the right people together to get to the best creative outcome in the fastest, most efficient way.” Collaboration with and between agencies has been key to delivering work at a much faster pace over the past year, Pritchard says. “Without the ceremony of everyone flying in and out for the big ‘Presentation’ (with a capital P), our brand-agency teams are connecting with less formality, sharing ideas earlier/more often and having more open conversations. This can actually lead to better work and better relationships.” That doesn’t mean P&G and agency executives won’t physically get together post-COVID, he says, but “we want to see this flexibility, speed and step change in our level of collaboration continue.” Ultimately, Read believes agency talent will increasingly work from “the best places to live” with less regard to where the agency is based. He says locations like that of CPB in Boulder, Colorado, “will be easier to do in the future, and location will have to do with where creative talent want to live and work.” He does believe that means less of a rationale for in-house agencies. “I think clients are rethinking what that really means,” Read says. “I think they want people who are faster, have access to the same data, and actually if we can achieve a lot of that remotely, that will be good.” “People collaborate best when together in the same place,” says Simon Martin, founder and CEO of Oliver, which provides staffing for many in-house agency operations for Unilever and other clients. “Co-location of agency and client is one way of getting the best collaboration between the two. But sometimes that is not possible, as we know all too well from the past year.” But he says co-location is only one aspect of in-housing, which also means client and agency operating from one organization model with streamlined communication and goal sharing. “There have been many in-house agencies that have never co- located with their marketer colleagues,” Martin says. “The differentiator is not co-location, but how the in-house agency integrates with the organization.” ‘We have to get back on planes’ Omnicom Media Group certainly has learned that video is more effective for interpersonal communication than conference rooms and speakerphones, says Chief Operating Officer John Swift. And he adds: “I think this could be the death of the Polycom as something teams sit around” to teleconference with remote clients. But ultimately Swift believes agency people and clients need to meet face to face. Rather than big teams getting on planes for one-hour meetings, “Microsoft Teams will be more effective,” Swift says. “But collaboration is really important. There are some things you just can’t replicate in remote environments. We’ve felt thirsty to get people together for more innovation and creativity. We have to get back on planes to start talking with clients.” Opinionated may have done well at winning and on-boarding new clients remotely, but something is still missing, says President Trish Adams. It was never particularly easy to meet some clients face-to-face, particularly in the East. For example, there are no direct flights and limited one-stop options between Portland and Burlington, Vermont, where Unilever’s Seventh Generation is based. But sometimes client and agency people would meet in New York, and the trip was worthwhile, Adams says. “There will continue to be [remote work], especially with project-based clients,” she says. “But I do think with our AOR clients, we’ve all talked, and we can’t wait to be together again. There’s something about when you’re super close with clients, so much happens outside the meeting room in terms of the side conversations.” Clients have accomplished a lot without traveling, and it’s unclear how much the loss of travel has hurt revenue or profits, so justifying increases in travel budgets for marketers themselves is going to be hard and even harder for agencies, says consultant Nancy Hill of Media Sherpas. “But the agencies will want to have that face-to-face, because it’s just the nature of agency people,” she says. “You can do a better job of trying to express what you’re trying to express in person.” Bridging the divide While the pandemic has inevitably put more distance between agencies and clients, in some ways it may have made them closer. While disputes over rebates and other non-transparent practices haven’t gone away forever, they’ve certainly been less public or pronounced. And cooperation has been more of a norm during the pandemic than it originally looked like it would be. Some agencies, for example, initially resisted remote, electronic audits for complying with marketer contracts, but that has faded and remote audits have become the norm, says Manuel Reyes, CEO of media consulting firm Cortex Media. The leveling effect of the crisis and remote work may have spawned an era of relative peace that ideally will linger, as OMG’s Swift sees it. “A lot of things have gone on in this industry between agencies and clients,” Swift says. “But when the rubber hit the road and everyone was facing this crisis, I do hope that the value of a strong agency partner was something that popped out of this. We’ve all gotten closer. We’ve all been in each others’ homes [virtually]. There’s an intimacy of how we’re communicating with each other. It was a good reminder to everybody how much we all mean to one another.”

Pandemic puts indelible stamp on brand-agency relationships

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