Client-Agency Relationship: A marriage that just has to work
According to industry experts, clients & agencies need to deeply care about each others' profitability and leverage great ideas, strategies and great executions, which will help them win together
Published - May 31, 2014 11:14 AM Updated: May 31, 2014 11:14 AM
People in the advertising business describe the relationship between an advertising/ creative agency and marketer/ client as a marriage – one with ups and downs, demanding, extracting but more importantly, a relationship which one cannot do without the other.
Posing as a devil’s advocate, Karthi Marshan, Head - Marketing, Kotak Mahindra Group asked marketing heads questions he had “crowd-sourced” from the media and creative heads at Goafest.
To the query, “Is there a business model for a great idea”, Deepika Warrier, VP, PepsiCo said, “If the greatest idea doesn’t translate into results, it’s really not worth the paper it is written on and a great idea doesn’t give results then the brief is wrong.” Warrier also added on the importance of having a right structure and people in place in the agency and looking for creative solution that ensures that the best talent are compensated well and also get a part of the variable incentives paid by the client to the agency.
Sanjay Warke, Country Head – DS Division, Toshiba India agreed with Warrier and said, “Strategy is about choice and execution and without execution strategy is nothing. Similarly for ideas, the paper and time spent versus actual implementation and seeing the result of it are worlds apart.” Sameer Satpathy, EVP and Business Head, Marico remarked, “Our compensation structure and the way we run our advertising is not completely in line with the way the world is moving. I don’t think there is an equable solution that works both for the client and the agencies.”
On another point put forth by Marshan if retainer or commission model works best, Anuradha Narasimhan, Director, Marketing, Britannia Industries said, “The issue of scope of work is what we are guilty of. The annual process is not robustly done to determine the scope of work and the resources allotted to it. The solution is solving for the scope, despite that we continue to seek from our agencies perhaps more than what we had agreed to.”
Sanjay Tripathy, EVP, HDFC Standard Life revealed that his company has moved to scope of work and resources required for the same a decade back. The company sat down with its agencies asking them on the profitability they expected and based on resources required added the profitability, with the guarantee that pricing could be relooked at based on the work done. He added, “We ask for more people and time and that’s what the problem is. But, we should be fair and if we are changing the model then we should also remunerate more.”
PepsiCo’s Deepika Warrier reiterated the importance of making the right consumer connection and execution and says that clients today are looking at deepening relationships and the need for collaborations has never been greater. “We should deeply care about each others’ profitability and leverage great ideas, strategies and great executions, which will help us win together,” she added.
To the media question, “How do clients consistently end up clearing bad creatives and put money to release it, but a 1:2 reach point deviation becomes the biggest crime committed by media agencies?” To this, Tripathy responded that at times marketing heads no longer take responsibility and accountability of their work and if the creative has been liked internally they release the work rather than looking at what would work with the audience and the target segment. Marico’s Satpathy remarked that there will be variability and it is inevitable that sometimes bad creatives are put out as it is part of business and this has to be taken on one’s chin.
The industry experts were sharing their views at a panel discussion on Day Two of Goafest 2014.
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