How to improve client-agency relations: whose responsibility is it?

New media and the economic challenges have changed the landscape of marketing forever Richard Pinder argues that clients must take the lead, while Camilla Honey (panel, opposite) offers tips to agencies

Our future needs reinventing. Of that there is no doubt. Agencies need to change out of all recognition in the next generation to provide better service in the new marketing landscape. And to succeed they need senior clients who are visionary in reshaping their own organisations to lead some of the change.

There are good reasons why much of the ‘heat’ in the marketing debate is focused on agencies’ perceived inability to change.

For one thing, it's partially true. The advertising industry has been a simple business, where the required management skills have been primarily client service, staff development and a minimum of simple financial control. Few senior managers have broad experience of marketing disciplines, far less a deep understanding of change management.

These areas of management are far better developed on the client side – consider the skills needed to manage an HP or a L'Oreal for longterm growth – but they are slowly seeping into the communications industry, often through research, media and digital businesses.

A less obvious reason why the finger is so often pointed at agencies is that, quite simply, it's easier. As a chief marketing officer, changing agencies in search of a more integrated, more digital line-up is a relatively straightforward process. However, remodelling your marketing organisation is much harder. It requires reimagining the marketing dynamics in your industry and gaining acceptance among your management, peers and stakeholders of a vision of how marketing will be in the future.

And, of course, you need to do all this while delivering results. Small wonder, perhaps, that some CMOs try to avoid wholesale restructure of their functions, and focus on delivering short-term sales out of flawed marketing departments.

WHY CLIENTS NEED TO BE THE LEADERS OF CHANGE

I'd like to argue, though, that there are at least three good reasons why clients truly need to be leaders of change.

Changing the agency model or capabilities without changing the client operating system simply doesn't work. Over 50 years, clients and agencies have developed a shared set of expectations, a shared language, a shared set of tools. You can't change one side of a shared conversation.

The future will belong to the innovators. It is highly unlikely that you can be a winner by squeezing more miles per gallon out of the current engine. You need to design a machine that can manage fully integrated communications, is ahead of the curve in digital, and manages the conversation about your brand holistically.

More pragmatically, changing your own organisation is the best way to make your current agencies perform better almost immediately. If you ask different questions, and lead in a different way, then almost any agency or set of agency partners will start to act differently. Agencies are service organisations and react fastest to changed service needs.

WHAT CLIENTS NEED TO CHANGE

So, what do agencies look for in visionary CMOs? How do we need them to act differently to help us to produce the campaigns that will reinvent the future?

Consciously create a new marketing model from the top down. Marketing reinvention must be led. If it percolates upwards or is allowed to drift, your organisation will send conflicting signals, and won't run smoothly. Juniors will reject the sort of work you want them to buy; research will kill the ideas you think are best; talent will leave.

A great CMO has a vision for how to integrate conventional marketing, social marketing and other techniques in a rapidly changing marketplace.

Be true partners in reinvention. This leadership process is, without doubt, daunting. Reinventing a marketing model so that all the pieces fit together is a time-consuming and difficult process. It involves rethinking assumptions built up over decades. You won't get it completely right first time.

But your agency partner can be a true help since they are likely to have 20 other clients with similar problems.

Put the consumer back in the middle. Tactics, measures and metrics are now in huge conflict. As we reintegrate, each discipline, on both sides of the client/agency fence has its own set of processes and standards. There's only one way to reintroduce objectivity: go back to the consumer and view the communications world through their lens, not ours.

Take silos out of the structure. From a consumer point of view, there is only one brand experience.

But there can be many barriers to agency integration. Do different departments handle advertising, PR, CRM, digital? Our overwhelming experience is that it doesn't work to integrate the agency structure if the client structure remains fragmented. The Brand Agency Leadership structure that we pioneered with P&G works because P&G has one point of contact.

Brief by objectives, not means. Increasingly, there are many roads to Rome. Sadly, agencies are usually briefed to produce a particular result by using a particular medium, such as TV – even today.

Remove perverse incentives. Equally, the way agencies are compensated tends to create incentives to do the most expensive thing. It's still true today that agencies usually suffer if they suggest anything other than TV, which is the most expensive (though perhaps still a costeffective) way to market.

We must all prepare for a world after media payment, a world in which content (embedded in social networks and mobile networks) and recommendation are the major parts of the marketing mix.

CHANNEL RESEARCH AND PROCUREMENT

No sensible agency head would contest the value of these important departments. However, too often they operate on a separate agenda, either because they are not fully briefed on the marketing director's vision, or because they are not under his/her control, or because they are incentivised to different goals. As they say, hang together or be hanged separately.

We live in a complex marketing communications landscape which requires fundamental change from both agencies and clients alike. I am optimistic and totally confident that, in partnership, the advertiser/agency world can drive this change to remain vital for the future.

Be true partners in reinvention. This leadership process is, without doubt, daunting. Reinventing a marketing model so that all the pieces fit together is a time-consuming and difficult process

FOCUS ON THE RELATIONSHIP

Arguably agencies have never had any other option than to change; in a service business, success depends on playing a long-term game. Adapt, evolve, or die. Track successful agencies more than ten years old and you'll see an evolutionary timeline of ownership, management team, competencies and clients. Some, such as AMV, CHI, Dare and Engine, are more adept at managing change than others.

The speed with which traditional marketing models are becoming obsolete is putting huge pressure on both clients and their agencies to evolve in terms of what they do and how they do it. The drivers of change are well documented – be they economic, technological or consumer behaviour – and in most cases are beyond the client's control. More than ever clients need their agencies to stand with them as they reinvent their marketing. A recent example would be Wieden & Kennedy Portland's advertising for Old Spice, a popular winner at the Cannes Advertising Festival, which took an ailing brand and helped to turn around its fortunes with a well-executed campaign, bringing together traditional and new media possibilities.

To enable them to do this, agencies need to create strong and enduring client relationships built on leadership, trust and added value. Without a relationship you become a commodity. It becomes unworkable. The announcement in July that BBH was resigning its Levi business after 28 years highlighted this.

John Anderson, president and chief executive of Levi Strauss & Co, said: ‘We're grateful to BBH for nearly three decades of inspiring work. Their talent and leadership helped create memorable and award-winning campaigns. Both teams decided that it's the right time to end our partnership!

SIX TIPS FOR SUCCESSFUL ENDURING PARTNERSHIPS

Know your client's business This starts with understanding the business issues they face and more specifically what brand communications can do to solve them.

Increasingly this means taking a more strategic communications planning view above and beyond execution. Some agencies are better equipped to do this than others and some only do the former. Effective communications means not just putting creatively expressed messages out there in front of the right people – now it is about creating conversations and experiences between brands and consumers.

Define your agency The best agencies realise that to be the catalyst of change for clients, they have to first change themselves. This means developing new skills and competencies. Too many agencies are over-promising and under-delivering. Separating strategy from execution and recognising when the client's best interests are going to be met by working with other partner agencies builds relationships.

Be a true partner Establish trust and respect at the heart of the relationship by listening, asking the right questions, anticipating and solving problems, meeting commitments, managing expectations, avoiding unpleasant surprises (particularly relating to time or money), bringing new and different perspectives, taking ownership, acting with integrity, being accountable.

Work with and within the client organisation You can't lead from behind a desk. Relationships take time to develop. You have to personally invest in them; spend some time in a client's shoes/in their business. See the world as they see it.

Great work is borne out of a great relationship The incentive for any agency is to produce work that meets its objectives and exceeds expectations. This kind of work invariably involves some element of risk for the client. The better the relationship the more trust and respect your judgment and recommendation will carry. The slightest hint of dishonesty, insincerity or manipulation kills any relationship.

The true value of an agency lies in existing relationships One positive to come out of the recession has been the rebalance of loving the clients you've got versus the allure of new ones. Knowing a client's value above and beyond the revenue they generate is the perfect starting point for any discussion with procurement people.

All of the above can be found in any of the ‘first generation’ agency founder books. The difference lies in the agency and client's ability to apply them.

Richard Pinder is chief operating officer at Publicis Worldwide.

[email protected]

Camilla Honey is managing director of jfdi, [email protected]