Opinion: Agency reviews won’t drive growth in turbulent times
The definition of insanity is doing the same thing twice and expecting a different outcome. Yet, we see this frequently when brands conduct agency reviews before first addressing issues with their internal structures and overall marketing model.
When asking around the virtual event circuit, you will hear that almost all brands are satisfied with how their agency is handling the pandemic. If you keep talking, however, you will also pick up that about half of brands are considering an agency review in the next 12 months. At face value, this doesn’t make much sense. But when you consider the time warp of 2020, spring might seem like “years ago.”
Our industry is more data-driven, more specialized and more outcome-focused than ever. Over the last few quarters, consumers have evolved the equivalent of more than five years when it comes to media consumption and purchasing behavior. Overnight, products’ value propositions changed. Hand sanitizer, for example, went from a nice-to-have luxury to playing a critical public health function. Compared to the tectonic shift in consumer behavior during this same time, most brands have changed only a bit—if at all.
Going into 2021, brands know they need to evolve fast to win, so many of them are looking to their agencies. Brands instead must address how their internal teams are structured to match the new marketing landscape and then consider the role of the agency within that model. Only after that reflective work should brands evaluate their agency against new requirements. When brands define how agencies can be part of a strategic, holistic solution, they can win big.
This internal work provides the opportunity for brand marketing teams to drive real growth for the business in 2021 and beyond, rather than short-term savings that might actually negatively impact the brand. We’re seeing this play out live. Many agency reviews recently were driven by a desire to achieve savings through securing cheaper media rates—particularly for big TV advertisers. But today, consumers are shifting to streaming and other digital platforms, so brands are pulling back budgets for traditional TV advertising and shifting more to performance media that is likely to be bought on a bid model. Securing better TV pricing from a review process won’t have the impact it used to.
Marketers should flip the script a bit. Conducting a review should be less about getting more for your dollar, and more about bringing more dollars in—growth and increased revenue—from strong, holistic marketing and media capabilities. The need for this is largely being driven by consumers engaging more directly with brands. The classic customer journey was already fading into memory before COVID-19, and now it’s been turned on its head. Within this new context, media reviews, for instance, might be done as an outgrowth of broad capability building.
Moreover, in today’s digital-centric era, brands require the data science know-how and organizational agility to cross-sell to customers as needed, deliver timely messaging, produce thousands of custom experiences and engage and re-engage accordingly. Ultimately, we’re all becoming performance marketers in some fashion, and the pandemic is accelerating this transition. The new reality requires marketers to invest in new types of talent and to reorganize with a focus on measuring success based on business goals. Disconnected silos—media, creative, shopper marketing—will make less and less sense.
Optimize for future growth
This is a time to focus on optimizing for future growth. With that in mind, I’m spending more of my time advising clients to spend their energy and resources in 2021 to rework their internal structures and reevaluate the roles of their partners, rather than endure a time-consuming review.
In the coming months, CMOs and procurement departments would be best served by aligning with one another and coming to a sense of mutual understanding. For these individuals, that might mean marketing executives need to think like economists, and procurement folks should embrace brand strategy nuance.
In the long term, marketers have the rare opportunity and capacity to help brands level-up their agency needs and help their agency partners to evolve and serve the current needs of the marketplace. Procurement teams can take an active role in helping to design the right in-house/outsource mix. They can also help to weave data and analytics into everything a marketer does.
The results will be far more transformative than yet another review.