After hiring three agencies this summer following a competitive review, Ally Financial summoned its new partners to its corporate office in Charlotte, North Carolina. There, about 50 employees from Anomaly, R/GA and MediaCom had a weeklong "immersion session." The agenda included interactions with Ally's CEO, as well as business leaders overseeing human resources, the call center and corporate social responsibility.
"We wanted them to understand [our] culture," says Andrea Brimmer, Ally's chief marketing and PR officer. "You're in a bit of a hot seat as a CMO and I [wanted] partners I could scheme the business with, not just go to to make great ads."
CMOs are under pressure to solve business problems often beyond the reach of traditional marketing solutions. In the case of Ally, that includes creating tools that help customers more effectively save money. As a result, agencies increasingly must commit to hard metrics like sales or profitability rather than solely using soft metrics like awareness or "brand health."
"Marketing chiefs grow the business or they're out," said Mirren, which advises agencies, in a recent report. "It's becoming black-and-white for agencies: You play a role in this pursuit, or you don't."
But few clients and agencies, it seems, put the processes and metrics in place to get the job done. So we gathered tips from industry players on how to be successful in this new world.
Open your doors
Clients, say experts, need to give agencies access to their business. Anheuser-Busch InBev, for instance, has the Agency Assembly, a daylong meeting that includes all its agencies and participation from across the brewer, including corporate affairs and finance. The first event, held in June at a Brooklyn hotel, involved 138 agency employees across 50 shops.
Get to the point
Dana Anderson, chief transformation officer at MediaLink, which runs agency searches, says "nobody reads" RFPs. So instead, "we sit down with the CMO and say, 'What's most important to you?' " The response is converted into four questions for agencies. If an agency "doesn't know retail and can't answer one of your basic questions about how it works … it becomes evident," she says.
Pay for performance
One challenge for agencies is they don't control all the variables. Maybe the marketing is top-notch, but a distribution problem craters sales. Also, because shops are being pressured to offer cheaper rates, senior strategic thinkers aren't always put on assignments.
Casey Burnett, managing partner of agency search company Burnett Collective, advocates setting up two teams per client: one with junior people who oversee daily marketing churn like digital ads, and charge basic fees; and one with seasoned staffers solving longer-term business problems, compensated based on results.
Some agencies say an arrangement with a fixed fee plus incentive-based payments works best. Anomaly includes a performance metric in its contracts that accounts for roughly 30 percent of its total pay on average, says partner Jason DeLand. "If we don't get the 30 [percent], our margin would be almost nothing," he says. Siltanen & Partners uses the "S&P Guarantee," which defines business objectives up front and states that the company will not accept payment unless goals are met. (Clients still pay production costs and media buys.)
Set category-specific metrics
Most shops are focused on "the metrics of old," such as awareness and social media engagement, said Brent Hodgins, a Mirren managing director, in materials his company has published for agency CEOs. Agencies, he wrote, must set category-specific metrics. For instance, a shop that handles a lodging brand should focus on the amount each guest spends per stay.
Avi Dan, CEO of agency search consultancy Avidan Strategies, sums things up: "Agencies need to live in the same foxhole as the clients and often they don't."