ROI & Integrated Campaigns: Commoditizing the Client-Agency Relationship?

Note: Not many marketing blogs talk about client-agency relationships, so I thought I’d take a stab at it…

Client-Agency Relationships: Now a Two-Way Street on Breaking Up

Via What’s Your Brand Mantra?, From the Wall Street Journal’s “Now, Often, the Agency Is the One Walking Away“:

Given a tough new-business climate, walking away from a client might seem counterintuitive. But some agencies are choosing to do just that, rather than sink more resources into accounts where it isn’t clear that either financial success or creative harmony is guaranteed.

All this back-and-forth is just another sign that the chummy advertising partnerships of yore are giving way to a more impersonal, market-driven environment. There is “relentless pressure on agencies and chief marketing officers to drive revenue. It’s killing our business. It destabilizes the relationship between agencies and clients,” says Matt Weiss, an executive vice president and chief growth officer at Interpublic’s McCann Worldgroup.

While outside the scope of the WSJ article, two trends will continue heighten the “commodization” of client-agency relationships, resulting in the ever more common “break-ups” between major brand and agencies:

    1. Increasingly ROI driven Marketing/Advertising decisions
    2. Increasingly integrated approach to Marketing/Advertising

These two approach drives the pressure for both parties to have increasingly control over the marketing strategy, creative direction etc – driving up the potential for friction (while also collaboration) in the relationship.

Skip to the end to see how this also links to SEO campaigns.

1. ROI Means No Patience

In Karl Capek’s play “R.U.R.“, a character named Alquist laments that his stockholders refused to stop selling robots soldiers out of greed and profit, ominiously warning that “dividends are the ruin of mankind.” In the end, the robot soldiers revolt and destroy all of humanity.

Ok, so maybe the same is not at stake in a client-agency relationship, but there needs to be an appreciation that CMOs face great pressure from stakeholders to ensure that marketing is a money-making machine. The emphasis on ever more advanced logistics (from Dell to WalMart), integrating CRM systems with marketing data, and the promise tracking all online metrics makes the idea of complete ROI tracking seem misleadingly reality in some respects.

Planning and assessing based on complete ROI can be misleading in two ways:

  1. Nothing can be tracked 100% and in the online world there can be high margins of error (20%) in just figuring out how many visitors came to a website. Just imagine the difficult of multi-channel analytics.
  2. The most efficient ROI tracking system is still limited by Time. Compounding tracking issues, is understanding the lifecycle from repeated brand exposure to a purchase;it is increasingly difficult to figure out how to understand how long the ROI converstion process is. And remember that consumers diversifying their media consumption (XBox 360 to text messages via FaceBook), meaning more data that needs to be tracked.

With the false sense of security that ROI data can sometime give, a branding campaign maybe killed well before it can help drive sales. And even if given enough time, how can one prove that Brand Campaign X was what really helped drive Leading-Generation Campaign Y?

With stakes being so high, patience can wear thin while also pressuring the need for more control to ensure that the campaigns succeeds.

Which bring us to…
2. Pushing for More Integrated Campaign
The trends towards using integrated campaigns, uniting mobile marketing to online viral campaigns to television, means that the stakes get ever so higher on strategy, creative direction, and execution…basically everything.

Take this need for better control with the ROI pressures mentioned in #1, and you have the increasing chance of client-agency relationships becoming more contentious.

Closing Thoughts: Will this Happen to SEO as it turns in to Project Management?

Jennifer from What’s Your Mantra has some choice closing words:

If agencies don’t have senior staff that can speak C-level lingo and understand how to tie creative execution to business results, we’ll see more and more of agency/client relationships go sour. On the other hand, clients often fallaciously think that advertising is (or could be) a magic bullet. They no longer have the patience to stick with a campaign (or an agency) for the long haul. And lastly, most aren’t empowered to make the kind of customer-experience decisions that would actually move the revenue needle.

While I would of word things differently, she and I are basically on the same page.

Interestingly, SEO has some similar issues. SEO has been striviing to prove its worth with metrics and ROI tracking, but it has also expanded its roll to focus on “customer-experience decisions that would actually move the revenue needle”.

SEO folks are more embracing usability practices (e.g. shopping funnel optimization), branding considerations, and integration with PR as it focuses more and more on sales and conversions. See: “SEO as Website Positioning Strategy” and “SEO and Project Management“. Will it stay this way? Will things “sour” more among Client-SEO Firms relationships?







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