Agency-client relationships a point of tension among industry leaders

Agency-client relationships a point of tension among industry leaders
Delegates convene at The Future of Media event in London.
The Future of Media

In a closed-door session at last week’s The Future of Media event in London, top leaders and executives from around media convened to debate the key issues facing the media industry and lend their voices to what topic The Media Leader should champion throughout the next year.

The debate was lively, but consensus on what mattered most was evasive and the atmosphere at times combative. Taking place just days after a new report from the World Federation of Advertisers (WFA) and MediaSense found that a quarter of major multinational brands said they believe the current agency model is “unfit for future purpose,” much of the conversation focused around the strained state of agency-client relations rather than many of the broader issues championed by The Media Leader over the past year, such as trust in media, the talent crisis, and sustainability efforts.

Fraught relationships

It was clear that trust between agencies, media owners, and advertisers remains fraught in a number of areas. One media owner went so far as to refer to agencies as “gatekeepers” that were “blocking efficiency,” underscoring a perception of lacking transparency over how revenues were disseminated, further likening their relationship with agencies to feeling like “a scam”.

“[You’ll have] one agency who are celebrating winning a client from another agency a few doors down along the South Bank, and it feels like there’s something not quite right,” they said. “Because at the end of the day, what ends up reaching us as a media owner from what the client is spending is just a fraction of the overall spend.”

Another delegate, frustrated that the conversation was becoming too narrow, chirped that, “This is The Future of Media, not the future of 1980s ad agencies.” They added, however, that agencies have become inefficient by pushing for advertising, such as in mediums like TV, that are most lucrative for business even if such allocations weren’t necessarily leading to effective outcomes.

“We’ve allowed agencies too much power over effectiveness decisions,” they argued.

A media executive at one brand, which has in-housed much of its digital media outfit, admitted they “probably wouldn’t go back,” but stressed that the in-house model “only works if you have a really close relationship with your agency.”

Agency representatives and former agency employees in the room defended themselves, arguing they provided good value for their clients even as the scope of their needs continues to grow — a core challenge facing agencies — and technology advances at a rapid pace, forcing evolution.

One key takeaway from the conversation was that the best way to work toward improving relationships is for agencies to become more proactive and develop client-centric relationships.

Yannick Bolloré reveals what’s next for media, Havas, and avoiding ‘greenwashing’ for Shell

It all goes back to the CMO

As the debate shifted toward identifying other significant concerns among industry leaders, advertisers’ chief marketing officers were seen by multiple delegates in the group as a barrier to growth, driven by a lack of convincing evidence communicated by CMOs in marketing’s favour.

One leader noted that CMOs lacked “ammunition to defend marketing because there is a lack of proof of effectiveness,” leading to a perception of “marketing as expendable” within boardrooms, especially as budgets have been tightened this year amid a recessionary economic environment.

Some in the group expressed frustration over chief financial officers’ treatment of marketing, with one industry veteran stating that “CFOs haven’t got a fucking clue about consumer behaviour.”

One analyst pragmatically replied that though that may be true, CFOs are “increasingly making the decisions” at companies, with more CFOs going on to become CEOs than previously. The implication: we need to start speaking their language better.

That ultimately comes down to proving return on investment. Multiple advertisers in the room stated that measurement is the most important thing for them, adding that CMOs should be welcoming more conversation about measurement as a way to improve marketing’s status as indispensable.

The industry veteran responded by warning against “getting mesmerised with what the CFO thinks.”

“I was taught to understand how the client makes money,” they said. “What is the business model and how can I inject myself into that? The CFO has absolutely no idea how their business is going to grow or what consumers are going to be doing or what sentiment is. Don’t run away from our own expertise and judgement. We bring a different language, a different perspective. It’s hugely valuable.”

From measurement to impact

Some advertisers, on the other hand, expressed dismay at the entirety of the advertising ecosystem, arguing that delving too deep into the numbers often missed the bigger picture. “I wish we could have a reset where we could get less advertising and higher quality advertising,” they said. A proliferation of advertising, and too many platforms, they argued, have led to advertising that fails to create impact.

That word — “impact” — turned into a buzzword for a change desired by the group.

To help CMOs better make the case to CFOs, consensus was reached that effectiveness measurement was in need of something of a rebrand to better sell the value of marketing in budget conversations.

One delegate said that “measurement needs to be a forethought, not an afterthought,” and that an honest conversation with CMOs about what is and is not possible to measure is needed to improve trust in measurement capabilities. “A leap of faith when it comes to measurement is always going to be needed,” they added, implying that measuring ad effectiveness is an imperfect science.

When asked whether measurement experts should be considered the new “rock stars” within the industry, one measurement lead in the room softened the praise by insisting that “we can be our own worst enemy,” when getting too into the weeds of measurement, adding that communication to CMOs should be simplified and streamlined without sacrificing the truth and importance of conclusions reached by measurement techniques. One agency executive agreed, quoting Leonardo Da Vinci by stating: “simplification is the highest sophistication.”

How do we measure media’s impact beyond sales?

Ultimately, the room appeared to agree in principle on redefining the importance of measurement. Leaders landed on the esoteric term “impact” as a more suitable word that more fully encompassed the contribution that measurement is making to media, especially in C-suite discussions.

However, on a separate, public panel, Digital Cinema Media CEO Karen Stacey reacted to the concept of reframing measurement as “impact” as something not quite new. The industry has “flip-flopped” before between obsessing over the granularity of measurement or currencies and stepping back to take a look at the greater picture, Stacey said.

On the same panel, Nick Manning said nonetheless that he agreed that effectiveness measurement should be “all about looking at business value drivers.”

Distinct conversation from future leaders

The generally narrow focus on improving media and advertising’s ability to prove its business importance, as well as the agency-client relationships that underpin that effort, was in contrast to the core issues discussed by non-executives on the following day at the Future 100 Club debate. Future leaders instead expressed greater concern over promoting and retaining diverse talent within the industry.

Future 100 representatives questioned whether leaders would be willing and able to make the changes demanded of them to improve efforts to retain talent, with one arguing that monetary incentives keep C-suite leaders from investing in and adequately supporting their employees’ growth.

The differences in focus between existing and future leaders in the industry underscore the divergent priorities of professionals within the media industry based on rank and title.

What can we learn about the future of diversity from a failed quiz?

Media Jobs