Brands and Agencies:The Fine Line Between Love and Hate

2 Brands and Agencies: The Fine Line Between Love and Hate

Current Realities � Greater content need (more places to place it)

� Difficulty in attribution; brands’ expectations may be technologically impossible

� Clarity in agency organizational team structures

� Questions of transparent practices between the partners and the supply chain

What Works Well TodayBrands believe that long-term relationships are the most successful if both the agency and client understand the broader business goals and work together to achieve them.

REQUIREMENTS TO MAKING LONG-TERM RELATIONSHIPS WORK:

� Agencies must be honest about the services they can offer. Marketing is getting more complex. Sometimes a brand will need highly specialized tactical skills -- a vendor who understands the complexity of a platform -- for a near term execution. If agencies don’t have those skills, the brand will need to engage another partner. This isn’t bad, it just is.

� A clear definition of the work -- and ownership of that work -- between brand, the primary agency and any additional partners.

� Challenges to be aware of when working with multiple agencies:

O There is a risk that the brand story may become confused or diffused;

O There is an inherent tension between the customer experience team and the traditional content/marketing/advertising teams.

O Situations in which one agency provides a service that another agency can perform, which creates competition, not collaboration, between the partners. Partners on a plan should never be in competition for an agency’s budget.

� Everyone wants a longer term relationship, but defining the work (or ownership) is the real challenge. Agencies need a clear roadmap of who owns what.

The board found consensus on the following five points below, which will serve as a starting point for a conversation to move the industry forward. The goal is to gain meaningful feedback as to where there is both agreement and room for improvement.

3 Brands and Agencies: The Fine Line Between Love and Hate

1. A mixed model, with a lead agency to own the messaging and establish key differentiators, along with additional agencies with specialized tactical skills as needed. Conversely, assigning the primary agency responsibility for global implementation, but leveraging smaller, unique specialists doing very specific tactical projects or even the high level thinking.

REQUIREMENTS FOR A SUCCESSFUL MIXED MODEL:

� Primary agency relationship should be long term, at least 5 years.

� Realization and acceptance that brands might not be able to afford to pay their primary agency for all of the tactical tasks required. There are a lot of tactical agencies emerging from a new business model: freelancers coming together in a shared workspace to offer highly specialized and tactical skills. Brands want to use them. But they must follow the core direction defined by the agency.

� Big-thinker agencies know the human side of the brand, while the specialist agencies are tactical. Having the right stable of experts on hand is essential for a balanced and successful brand.

� Willingness to work together and collaborate on part of all agencies, and an understanding that the collective success will feed all players in the ecosystem in the long term.

2. Working project-by-project can be successful, as long as the various agency partners can understand how all the pieces are tied together in the big picture.

REQUIREMENTS FOR MAKING PROJECT-BY-PROJECT WORK:

� Brands communicate the high-end goals to all people who work on projects. A strong understanding among vendors is particularly important in an era of high turnover of agency employees.

� Clearly define strategy, as well as a lead project management role/agency among the service providers.

� Flexibility in SOWs. Brands currently write super tight SOWs to save money, which doesn’t allow the agency to go the extra mile.

� An understanding of how all the projects connect, so that projects are completed in the broader context of the brand’s goal. Proof point: “We wanted our agency to continue working project by project, but to do so in the broader context, to see how the projects connect. But it was hard to get them to see that.”

� Projects are tied to the bigger brand health measures, rather than a short term goal, such as a Super Bowl campaign execution.

� Giving agencies time to do deep thinking. Typically, agencies want to minimize the timeframe of each project, while brands want to maximize brand affinity and the projects that them serve them over the long term. This kind of deeper thinking takes longer.

3. Transparency in roles, expectations, KPIs. People need to know who will handle what, on both the agency and brand side. Agency needs to know who the project owner is, and the brand’s organization structure. Brands need to know the agency structure, and which resources align with their needs.

4 Brands and Agencies: The Fine Line Between Love and Hate

REQUIREMENTS FOR TRUE TRANSPARENCY BETWEEN AGENCY AND BRAND:

� Sharing of the big picture, KPIs and incentives between client and agencies. A mixed model is like a puzzle in that each agency has a part in creating the bigger picture. To succeed, each agency must has a clear understanding of the marketing questions the brand needs answered. Brands and agencies need to discuss specific business objectives, and identify the KPIs that will move the needle. Next, all agencies should have visibility into the KPIs and the incentives of the plan, which means brands must be willing to share data with their agencies.

� Brands are selective in what they send to the agency, so the agency doesn’t spend the first few months of an engagement weeding through a Box folder of hundreds of documents. Send only materials that align with the objectives of the RFP.

� Incentives are aligned to the role each agency plays. Not every agency should be held to the same performance standard.

� All players share their plans among one another. For instance, the media agency needs to share its plan and rational with the creative agencies and so on. This will prevent misalignment.

4. Attribution is a challenge due to the state of the industry. Brands must have realistic expectations as to what is possible, as well as be willing to share data, and attainable alignment with business outcomes.

REQUIREMENTS OF SUCCESSFUL ATTRIBUTION:

� Brands need realistic expectations of what the data can tell them. At this point in time, the industry can’t meet expectations about attribution, measurement and correlation of spend to conversions. Brand expectations are unrealistic. Matching marketing KPIs to real sales data can be a challenge.

� Agencies can provide multitudes of data in dashboards, but what really matters is the story it tells and the questions it answers. We need alignment between the expectations of what the data should tell us, and what the data actually answers. Without this alignment, brands may perceive that the agency isn’t sharing data.

� Consistent A/B testing is critical to determine campaign success and to distinguish the channels and strategies that drive results. That said, brands should provide input on what is working well, and not just point out failures.

� There is a industry-wide need for a method or system for attribution of efforts and results, today this is done based on instinct and feel

� Client team needs to be aligned to share data in a single voice.

5. Access and control of the data itself

We believe that marketers should own the data and a third party should keep track of data validation.

5 Brands and Agencies: The Fine Line Between Love and Hate

Acknowledgements

Ori CarmelDirector, Data Products Partnerships

Nelson CatarinoDirector, Data Products Partnerships

Natan CohenCorporate Vice President, Agent Marketing Programs

Michael ConstantineHead of Marketing, Americas Region

Jackson JeyanayagamChief Marketing Officer

John MilitelloPrincipal

Sean MillerPrincipal

Joe PapaDirector, Channel Marketing

Anna PapadopoulosVP, Media, Sponsorships and DTC Advertising

Rafael SulitHead of U.S. Brand and Channels

6 Brands and Agencies: The Fine Line Between Love and Hate