Client-agency Bhai Bhai

BE decodes the rapidly-evolving relationship status between

marketers and agencies

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We live in newer, stranger times. And more so if you're in theadvertising and marketing business. The `traditional media mix only'ship has sailed for brands and marketers and we hope that no brandmissed that final boarding call. Today, a television commercial, a pressad, a radio spot and a hoarding does not an adequate media mix make.

Especially with digital entering the fray, planning media has gottenextremely complicated there is branded content, social media, onlinerelationship management and mobile marketing that are a part of thedigital umbrella. The demands of the business are changing, newermediums are coming up. This simply means that the typical client andagency relationship is out of the window..

Show me the money, honey

The first fairly obvious consequence is that remuneration models arebecoming greyer, with the parameters on which agencies are evaluatedbecoming RoI-driven. In light of this, are agencies making the fair sumthat is due to them? Obviously marketers think they do.

“Agency compensation needs to seen in the context of what adds valueto the client and what ensures a reasonable profit margin for theagency,“ believes Sanjeeb Chaudhuri, global CMO and regional head,South Asia, Standard Chartered Bank. He further adds, “A traditionalagency ecosystem doesn't really need to be taken into consideration inevery campaign designing process.“

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What that really means is that cost structures should be planned wiselyaccording to the client's needs without the agency getting the short end ofthe stick. But of course, all of this can only happen when both parties areopen and transparent with each other, with clients appreciating that anagency's remuneration cannot be subsidised. After all, you get what yougive.

Kamal Basu, head of marketing, Volkswagen India agrees with Chaudhuri,further stating that the pay-per-performance model is becoming the order ofthe day. “As marketers, we shouldn't just evaluate agency associatesthoroughly but make sure they are also making a profit.“ Having said that,Basu feels that it isn't easy to handle multiple agencies for different services;it means that brand teams will have to scale marketing resources too,something that is easier said than done.

Relationship status: It's complicated

The bigger question is, where do holding companies stand in this big,bad changing world? An association with a network agency may seemlike a cushy proposition, but it needn't necessarily have thewherewithal to provide specialist services. With dynamic marketconditions come newer, different expectations from an agency.Marketers believe that only agencies that understand job processes,segment dynamics and the ones that create a knowledge base for thebrand will be the last ones standing.

The New Age Outlook

It is interesting to observe how the rule book is evolving for new businesses infledgling categories. In fact, Rathin Lahiri, CMO at Meru Cabs, believes that therehardly is a rule book in the first place. The onus of performance, he says, shiftingtowards the agencies as much as it was with marketers.

“E-commerce is seeing digitization at a crazy pace. It's consumers that are leadingthe brands into technology, by adopting it so fiercely. The sheer speed at which weneed to acquire new consumers needs communication partners that can keep upthey need to be talented, flexible and agile,“ Lahiri explains.

The media mix for start ups and e-commerce brands is quite different than the rest.The former incline heavily towards digital in its entirety, with just about 30-40% ofthe spends being diverted to traditional media. In this scenario, agency partnersneed to be accountable for performance delivery and not just brand metrics. Lahiriemphasises that marketers are willing to shell out the big bucks if they see valuecoming in.

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If marketers are to be believed, then the days of creating just cleverand heavily awarded campaigns are over. The work needs to be great,but hey, what's the point if it isn't doing anything for the brand? Withso much happening in the start up space with such ferocity, brands areonly as good as their last campaign. The work needs to be churned outquick, and only partners who appreciate this are welcomed. Like theysay, you snooze, you lose.

So does that mean that if the brand's primary custodian quits theagency to form his own venture, brands would follow suit? Lahiri is onthe fence on that one. “If I think that one person understands mybusiness as well as I do, then I'd consider moving, surely .“

For details and bookings contact:-

Parveen Kumar Chadha… THINK TANK

(Founder and C.E.O of Saxbee Consultants & Other-Mother

marketingandcommunicationconsultants.com)

Email :-saxbeeconsultants@gmail.com

Mobile No. +91-9818308353

Address:-First Floor G-20(A), Kirti Nagar, New Delhi India Postal Code-110015