"Chemistry" with a healthy dose of "friction" is key to ensuring a client-agency relationship flourishes but the payment model needs overhauling, agencies believe. 'Time taken to understand each other's ways of working and challenges pays dividends in terms of being able to adapt to make the partnership work'.
The client-agency relationship is the fulcrum of the advertising industry and continues to be a hot topic. In short, agencies wouldn't exist without clients while agencies are pivotal to clients: powering their conversation with the outside world and fuelling clients' sales and marketing. While never out of the spotlight, the client-agency relationship is arguably under more pressure than ever amid factors such as reduced CMO tenure and a tough economic environment.
Currently, both clients and agencies are enduring a challenging time: agencies are being challenged to do more for less and facing more competition (from management consultancies and clients' in-housing) while clients' marketing departments are being squeezed by finance. While no client-agency relationship is perfect (they each like to play the blame game when things go wrong), marketing directors and agencies each extol the virtues of a challenging, open-minded relationship and how it makes their working lives easier.
The question about how to best foster a client-agency relationship was highlighted in a recent IPA white paper, called Partnering for Growth. The paper outlined the key "characteristics" and "contexts" that can create a "long-term, mutually sustainable client/agency relationship". The paper, authored by Neil Perkin, the founder of digital agency Only Dead Fish, says there are four fundamental building blocks to ensure partnerships for growth. Captured in the acronym, SOUL, "Shared Foundation, Organisation, Understanding and Learning", the white paper explains that these four fundamental elements are interdependent; if one element is missing, true mutuality in client-agency arrangements cannot happen.
It would be hard for clients and agencies to disagree with the IPA building blocks. Digging a little deeper, the key ingredients to make a client-agency relationship tick are "honesty, chemistry and a healthy dose of friction" said Jim Dyer, head of client leadership, Wunderman Thompson, the advertising agency. Dyer said: "The first one is pretty obvious, but if you can't have honest conversations as client and agency partners, then you don't have the requisite level of trust, and you probably won't make great work together. "Chemistry is an underrated element in the relationship – ultimately it's not just about casting your agency talent based on capability or experience, you need to understand your clients and the kind of personalities that will gel with them.
"And finally, the best client relationships I've ever had have always had moments of friction. It's how you get to great work, and it shows that both partners really care about the end result." Neil Henderson, CEO, St Luke's, the advertising agency, is singing from a similar hymn sheet, citing "trust, openness, commitment to partnership, keeping to agreements and a shared ambition to learn from each experience" as important factors.
Understand each other's pressures
Henderson adds: "The constant frustration on both sides of the fence is that the other side doesn't understand the pressures and challenges each side is under. "Time taken to understand each other's ways of working and challenges pays dividends in terms of being able to adapt to make the partnership work. "Regularly holding sharing sessions to discuss past and upcoming projects (some call it doing pre-mortems) is a great way to keep the discussion objective and cool rather than trying to sort out conflicts in the heat of the project. "Ensuring the remuneration model is fair and clear and built to reflect the true nature of the work and how it changes over time is critical." Meanwhile, James Rice, joint head of account management at Bartle Bogle Hegarty, the advertising agency, says the agency's long-standing client relationships are built on "clarity, honesty, closeness and a mutual respect".
Agencies often guilty of trying to solve all clients' problems
Amid budget tightening and heightened competition, agencies can at times be guilty of trying to overstretch themselves to please a client. Dyer says agencies must listen to what clients want, and not what the agency wants to sell the client. That said, Dyer points out that sometimes a client's problem is more "far-reaching' than what is on the brief and the client might have a myopic view as they are too close to the business.
"A good agency will look at where a client's business may be fractured, and identify it," Dyer adds. "At Wunderman Thompson, we strongly believe in our methodology of Whole Brand Thinking – whilst we may be working on a brand brief for a client, we'll make sure to look at the issue through the lens of the whole brand, whether that be CRM, tech, commerce, experience or any other component of the business. "That doesn't mean we try to upsell, or solve every problem on the agenda, it just means we understand that most consumers don't view a brand purely through an email or a TV ad – they look at the whole picture."
Henderson believes agencies are often "too eager" to extend themselves and prove their capability beyond their competency. Henderson says the danger is that "this leads to an undermining of the trust they might have built up and so it can backfire". Henderson adds: "That said, it's good for an agency to stretch itself; clients prefer partners they trust and who know their business to solve their problems but there has to be honesty. "At St Luke's we have put ourselves forward for work that is beyond our core competency but we are always honest about where we are learning and we charge accordingly."
Clients must set out objectives at early stage
Clear client objectives candidly and coherently explained at an early stage to an agency are a must, advertising folk say..Rebeccah Lowe, managing director, Amsterdam at MassiveMusic, the creative music agency, says: "Great work starts with a great brief. "Doing the strategic exploration and data analysis to inform objectives for the brief before the kick-off will ensure everyone understands what the job to be done is. It also helps unite everyone's vision." Sarah Rodrigues, joint head of account management at Bartle Bogle Hegarty, said: "Clear objectives massively increase the chance of the agency getting to the right answer more quickly-improving the relationship and boosting profitability."
Overhaul of payment model
There has been long-standing debate about pricing models, with compelling arguments on both sides. While clients are under increasingly heavier financial constraints, agencies feel the strategic input they provide can be undervalued and that winning agencies should be recompensed for their pitching ideas. Lowe says a payment model at the early stage of work "will deliver a healthier relationship between agency and brand". Lowe says: "If a brand can dedicate a budget to support proactive thinking it will always deliver exciting insights and opportunities." Rodrigues points out that her agency appreciates the "increasing number" of clients which acknowledges financially the amount of work that goes into a competitive pitch".
More focus on outcomes
Rodrigues says, though, that more focus should be on outcomes. She says: "Time spent is one important factor in remuneration, but does it need to be the only factor? The most effective idea is just as valuable to a client/ agency partnership, regardless of time spent to get there."