Chaos or creation? That depends on your partnership

Find out what Bruno Gralpois has to say about the future of the advertising industry.

The relationships between brands and their agencies are bordering on chaos. A fierce debate is raging on about what the ideal client/agency partnership looks like. Advertisers are asking for more and wanting to pay less. And they’re using the option to bring everything in house as a bargaining chip. 

For agencies, the time to show value is now. No longer is the sacred role of being a trusted advisor enough to sustain the relationship with a brand. Agencies must showcase demonstrable value to the bottom line in order to stay in the brand’s good graces.

With all this change and scrambling to adapt best practices, it can be a challenge to identify what the "right" way to move forward is. By having a collaborative partnership model that is built on a solid foundation of open and honest dialogue, everybody can have success.

Pressure on brands and agencies

Advertisers can’t afford to work with agencies that fail to drive high-impact results. They cannot commit to agencies that are unable to anticipate needs or address challenges. Brands no longer want agencies that are exclusively paid by filling time sheets, without regard to business outcome or performance. They no longer have the patience to see agencies fight with each other over territorial issues when they need their entire marketing arsenal to work well together. 

In the end, consumers are too demanding, competition is too tough, financial pressure is too great, marketing is too important, and time and resources are too scarce, for advertisers to undervalue or underleverage their agency partners.

Conversely, agencies don’t have the means to jump from one review to another in endless pitch situations. They cannot afford to give away their valuable work or ideas. They cannot build sustainable value when the CMO’s office is a revolving door. They cannot act as banks for their clients. Agencies cannot rely on generalists to meet their clients’ specialty needs. They cannot credibly be all things to all their clients.

In a world of uncertainty, agencies don’t always have the line of sight and commitment from their clients to make wise long-term investment decisions in talent and technology. Agencies cannot afford clients who fail to understand that only reasonably profitable agencies translate into stronger partners that will contribute to their own success.

The clock is ticking

What will get agencies to take greater risks with their clients? Will agencies risk more to earn more? Under what circumstances will advertisers continue to in-source and build in-house agencies? How are disruptive technologies transforming the marketing value chain and agency offerings? What should agencies do less or more of to make themselves more valuable to their clients?

So many questions, so little time. It seems as if everyone is running fast to take the lead, with divergent opinions as to where this is all going.

In a lot of cases, these questions are a result of the relationships between brands and agencies being grossly undervalued and underleveraged. The opportunity is now to transform them into the powerful, fruitful, competitive assets they were intended to be. Only one thing is certain. Regardless of size or industry, savvy advertisers need the talent, creativity, perspective, knowhow, and services/tools only agencies can provide.

Data-driven success models

In the so-called "generation of conversation" where brands are also media channels, advertisers must leverage agencies as brand stewards, leading them in evolving, modernizing the way they reach, converse, interact, and exchange with consumers. Agencies, still shaken by the massive force of a business in continued transformation, are adapting by reinventing themselves, not once, not twice, but as many times as needed to find the best way for them to deliver sustainable value.

Critically, agencies are now increasingly competing to own data, content, and technology, in addition to key talent. They are designing agile, responsive, nimble, results-oriented organizations so that they can thrive and move quickly to take risks, adapt to client needs, and operate cost efficiently.

They cannot do this alone and clients must play their role. Advertisers must drive change internally to challenge the status quo in the tireless pursuit of excellence. Clients must empower marketing and procurement leaders to take full advantage of what their agencies can offer and turn those into valuable business partnerships that turbo-charge their business performance.

Advertisers must carefully examine their needs to come up with the right agency model. They must apply rigor and discipline when searching for the right agency partners and set up contracts that are fair and equitable. The opportunity to turn these relationships into partnerships is considerable.

Work toward a common goal to succeed

Following years of economic progress driven by human knowledge and intellectual capital, we are now entering an interconnected period of "partnership capital" where our greatest company assets are our business partnerships.

Clients and agencies of all sizes, from the boutique shop to the holding company, have heard the call to drive exponentially greater value. This can only be done through mutual understanding, mutual goals and priority alignment, shared accountability, and thoughtful consideration about what makes strong partnerships deliver results repeatedly. How do we make the most of those partnerships in this new era?

Moving forward, we will see new partnership models and best practices emerge. Regardless of their flavor du jour, they are likely to have one important thing in common: they will realize the transformational power of the multiplier effect that only strong partnerships can produce.

Bruno Gralpois is the co-founder and principal of Agency Mania Solutions. Recognized as a client/agency relationship guru and advisor, he is also the author of "Agency Mania 2nd Edition: Harnessing the Madness of Client/Agency Relations for High-Impact Results" due out in early 2019.

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