Advertisers are wasting up to 25% of the money they spend with their agencies through poor management and sloppy advertising briefs, says a UK report.
"There's huge wastage going on out there," says Stuart Pocock, cofounder of The Observatory International, a London-based consultancy that manages relationships between ad agencies and their clients.
According to the report, 75% of advertisers claim agencies routinely have to rework advertising campaigns after failing to fully understand the brief. That's hardly surprising, retort agencies, considering most advertisers also don't know what they want.
Advertisers don't deny it: they admit that inadequate briefs to their agencies are responsible for 40% of reworked campaigns.
It's a crazy situation, says Pocock. Instead of trying to shave off 1% or 2% from margins, agencies and clients should concentrate on their processes in pursuit of far greater savings. That many won't, indicates the uncomfortable relationship that often exists.
This is good news for the growing number of consultancies stepping into the breech as intermediaries.
Until now, most of their work has been at the pitch stage, when clients are looking for an advertising or media agency. The consultant's job is to manage the process, ensure the client's brief is understood, and help find an agency with which the client can work. "The relationship works best if there is a shared culture and chemistry," says Andy Rice, chairman of the Yellowwood brand agency.
Consultancies providing this service are often referred to as "dating agencies". Some companies want to take it further and become marriage guidance counsellors as well.
John Little, a former SA ad agency head and now The Observatory's SA partner, says: "Consultancies are normally pulled in when there's a problem. We say there should be an ongoing process. It's a question of maintenance, of managing the relationship."
Companies such as Yardstick, generally recognised as SA's leading "dating agency", already provide regular reviews as part of the service. Little believes there is scope for more. Many of the marketers dealing direct with agencies have no idea how to prepare an advertising brief. "I've seen three-line e-mails posing as briefs. They're not so much briefs as streams of consciousness. An inadequate brief means inadequate work by the agency."
Many marketers also have no idea how to judge work or provide feedback to their agencies. "Work is rejected, everyone gets frustrated and relationships crumble."
Mick Blore, group chief creative officer for Young & Rubicam SA, says agencies must share the blame when this happens. "We could all benefit from training in conflict resolution. From the agency side, we don't always try to understand client issues. I've known a couple of hot-headed creative directors who have completely lost their tempers."
Once this happens, it's probably best to part, says Nina Morris, MD of ad agency morrisjones&co. "Your relationship is stuffed. I've seen it happen and it's hard to fix."
Almost without exception, the breakdown is caused by chemistry or, as Blore says: "Agencies are hired for creativity and fired for service, which usually means the personal chemistry, or lack of it. It's the mundane things that make a difference."
With appropriate professional intervention, it's possible to stop this situation developing, says Little. Honesty would help. Agencies are generally loath to criticise clients. Rice says: "It's true that some clients don't write good briefs, but then agencies accept bad briefs. They shouldn't."
The Observatory report exposes the gulf that often exists between the two. More than 40% of clients think their evaluation skills are good, but only 25% of agencies agree. Only half of agencies think they fully understand the client briefing and evaluation process. In a further indication of the lack of understanding, many agencies believe it's not important for clients to understand how agencies work.
The report concludes: "More time spent on accurate client scoping, a unified approach to agency costing, the honing of briefing and evaluation skills, plus improved understanding of each party's internal processes, would radically transform cost inefficiencies within the partnership.
"The client community feels it's not getting great value from agencies. Agencies are eternally bemoaning the fact that their margins are wafer-thin. The fact that there is a problem in the first place suggests something is going wrong with the way the two parties work together. Most clients make a special effort to appoint the right agency when they decide to work together and, believe it or not, agencies don't go out of their way to annoy clients."
Little says: "The situation isn't unique to SA, but my hunch is that it is worse here because of the general skills shortage. I don't think enough attention is paid to the development of marketing skills." The economic climate doesn't help. "One of the first things that gets cut in a recession is training budgets."
Morris confirms: "We have some fabulous clients that understand the game, but there are also marketers who don't. Generally, I think there's a need for training in brand planning, marketing budgets and other skills."
The SA advertising industry has been slow to adopt professional intermediaries, but it is catching up. Intermediaries can bring impartiality and rigour to the process of selecting an agency. Yardstick has experienced a 10% increase in business this year. Johanna McDowell, MD of Independent Agency Search & Selection (IAS), also reports growing demand.
Rice says that if the client gets the right agency at the outset, many of the potential problems later will be avoided. "There is no set formula. I have a client who says he wants a traditional advertising person of the old school - someone he can talk to, one to one, and who understands where he is coming from. He doesn't want an over-clever youngster."
It's because clients and agencies often misunderstand each other that intermediaries can be helpful - but not indispensable. Blore observes: "When we get a new client, we have a process meeting at which we explain how they can get the best from their agency." Pocock says: "You must be aligned on expectations."
Part of the relationship problem may stem from the fact that many clients consider their agencies as service providers rather than as partners. It's generally acknowledged that the more integrated an agency becomes in the total marketing strategy, the better its overall contribution will be. There is a risk, Pocock acknowledges, that intermediaries may usurp that role. "Agencies are not always at the top table' and their strategic input is not always sought as it should be."
Rice agrees: "The best relationships occur when the agency is totally immersed in the client's business."
