Don’t just rationalise your advertising agency roster, strategically align it
September 9, 2012
I was talking with a CMO in Hong Kong soon after opening our office there about his roster of agencies. He had regional responsibility for a portfolio of brands across Greater China (China, Hong Kong and Taiwan) and when we started mapping out the agencies he felt it was fairly simple as he had one media agency and one creative agency. Quite neat really.
Then I asked about the other agencies. He looked at me quizzically as I explained I mean the other suppliers like sales promotion, public relations, retail activation and the like and before you know it we had more than 20 agencies across the region.
He was talking about reviewing the creative agency and I suggested that one of the considerations would be the impact on the overall roster. Clearly this had not been factored into the process and as we discussed the implications it became clear that the problem was not the creative agency it was the relationship between the creative agency, some of the marketing teams and the media agency.
I suggested that instead of simply swapping one agency out for another and finding the problem still there that it would be worthwhile undertaking a Strategic Supplier Alignment.
In the process we reviewed all of the agencies and suppliers engaged by the marketing teams across his brand portfolio and took both a qualitative and quantitative approach to the current or “As Is” model. From this were were able to identify the underlying issues which were that many of the agencies and suppliers that were not necessarily top of mind initially had actually managed to increase their remit across the brands to the point the main creative agency was feeling highly defensive over what they saw was an erosion of their responsibility.
We were able to design a future or “To Be” model that took into consideration the strategic and functional requirements of the brands and managed to eliminate the duplication of roles and responsibilities and fill the gaps in the expertise. The difference between the As Is and the To Be model became the procurement plan which his procurement team executed.
So did the creative agency keep the business?
Well it was not the creative agency that went to pitch. Instead we were able to demonstrate the real opportunity was in the rationalisation and alignment of the other 18 companies on the roster. The ones that did not even register initially with the CMO.
Rather than simply swapping out an agency the CMO ended up with a strategically aligned roster that was more price and cost effective. Certainly what he was probably hoping for when we met, but the way we got there was probably not what he expected.
What are your experiences with strategic alignment of agencies? Leave a comment with your thoughts.