Thoughts

The Times They Are A-Changin’: Evolving Client/Agency Relationships

May 17th, 2017   |   Jennifer Spire Gove

Each year at the SXSW Interactive Conference, Preston Kelly finds great value in our discovery of new technology and new approaches to connecting with consumers. This year we decided it was time for us to not only observe, but share our thinking as well.

We submitted four proposals for SXSW daytime conference programming. We were thrilled to learn that one of our proposals was chosen as a Meet Up. A SXSW Meet Up is where professionals from the marketing and technology industries talk about new ideas, new collaborations and get to the heart of an issue in a more casual, interactive setting. Our session “Can Agencies Lead Again?” explored the changing agency/client relationship.

The number of agencies reporting client/agency relationship improvements fell from 70% in 2015 to 53% in 2016 (Forrester/SoDA Report, 2016). This topic is top of mind for many. We were over capacity with attendees spilling out into the hallway, and craning their necks to hear the dialogue.

How can agencies and clients have better, more productive relationships that lead to more effective work? What can agencies do to become more relevant and regain their position as experts? Those were some of the questions we raised during our Meet Up, and here is what participants had to say:

1. Re-Defining Creativity
The slippage of agency leadership would say that creativity isn’t as valued as it once was. We are left questioning what happened to the power of a marketing idea. With the extensive amount of data now available to us, creativity now spans art and science.

Raising awareness of the product was typically the answer, and the best tactic was a creative advertising campaign. But brand awareness is not enough today. You need to also create a great customer experience and drive purchase behavior. Marketers have realized this and are now using data to see what entices customers and what doesn’t.

Consensus was that data and technology are starting to take precedent and are being considered the new creativity. The solution to a creative brief isn’t restricted to advertising channels. “It’s about doing what’s never been done before, being solution-based versus message-based.”

2. Full Service vs. Specialty
When asked for a show of hands, most people at the Meet Up were from full-service agencies. Only a few were from specialty shops, offering digital and CRM. It was obvious from the discussion that the full-service shops are trying to figure out if they’re going to stay full-service or move to a specialty.

A recent Forrester study showed that agencies providing both traditional and digital services were more likely to have client/agency relationship struggles than agencies providing digital services only. 38% of full-service agencies disagree that things are improving compared to 25% of digital-only shops.

“The environment is causing agencies to try to transform every time another client needs another type of creative work done. The agencies are jumping up to say they can do that, but not thinking about whether they should.” This approach of being all things to all clients is becoming more and more difficult to pull off and can lead agencies to lose their differentiation and focus.

3. Marketing Outcomes
With disparate agencies, internal and external, working on a business, it is difficult to determine who is responsible for the outcomes or effectiveness of a marketing campaign. Is it the client? The lead agency? Or the agency that is responsible for that one project?

We talked about how the agency of record used to be responsible for the outcomes. Now frustrated, agencies feel like they can get blamed for poor work that they didn’t do without getting credit for the good work they actually do. “Freelance work is also part of what’s undercutting the agencies.” And now consultancies are in the mix, continuing to play a bigger role in marketing.

There was consensus that the business models of consulting and creative agencies are converging. Consultancies with deep background in business strategy and technology are adding creative agencies to their arsenal of solutions. Additionally, large creative agencies are expanding their offerings too.

4. Talent
For the agency, the group acknowledged that it is crucial to retain top talent and have a consistent team on our clients’ businesses. Clients are used to having long-tenured employees who know intimately about their business and products, as well as internal processes and politics. Many agencies struggle with tenure, as it is common in our industry for talent to bounce around. Clients are then forced to constantly onboard new agency partners, struggling with breaks in momentum.

It was also acknowledged that clients are improving their ability to recruit top talent because of the level of strategy and creative that is now needed in-house. However, there was discussion about how the best talent in creative, planning and account management still wants variety in the work they do. That variety comes from working with different teams on different brands with unique challenges. They also want a faster paced culture; all of which is typically offered at external agencies.

The group concluded that more focus on recruiting, retaining and training talent on both sides can have a positive impact on the agency and client relationship. “We need to work on training and retaining talent before they head over to the consultancies.”

Even after the official Meet Up had concluded, discussion about the session continued in the hallways and through social media. We invite you to add to this conversation on Twitter by tagging @prestonkelly and #buildtrust.

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