Too many agencies? Or too many marketers doing too much with too little?

Darren WoolleyMarketers are complaining of agency rosters that are too big and hard to manage. The problem is not new, but there could be a new way to solve it, writes Darren Woolley.

The conversations from marketers over having too many agencies to manage, as reported from the “All That Matters” conference, is not new, as the proposed solutions are not new.

Consolidate the roster to a single lead agency or bundle up into a customised holding company solution is simply a reaction to a problem rather than a solution to the deeper issue facing modern marketing.

That problem is not the number of agencies on the roster, but the response of marketers to an ever increasingly number of consumer touchpoints.

Darren Woolley's chart

Like a kid in a candy shop, marketers are now faced with more channel choices than ever before and their reaction is usually to want to do everything. Marketing has been accused of suffering from the shiny new things, where marketers are often attracted to the latest opportunity on the block to deliver that long desired competitive advantage. Take Virtual and Augmented Reality as the latest examples.

Ogilvy & Mather COO Jerry Smith at All That Matters: 'Some companies have lost their focus on the brand as they chase shiny new objects'

Ogilvy & Mather COO Jerry Smith at All That Matters: ‘Some companies have lost their focus on the brand as they chase shiny new objects’

But the marketing budgets for many of these marketers remain the same. So while they are adding more channels to their marketing plan, requiring more specialist agencies to deliver to these channels, the amount invested into each channel is falling.

So now we have multiple agencies scrambling for a bigger share of an increasingly fragmented marketing budget. Yet the marketers expect the agencies to work and collaborate together, when in actual fact they have been set up in fierce competition for a share of the budget. No wonder agencies are rapidly trying to diversify their capability offering in an attempt to secure a greater share of that budget.

In the meantime, the marketer is increasingly frustrated on a number of levels. First, they have a constant frustration that they do not have enough budget to deliver everything they have planned. I have yet to meet a marketer that does not want more money to spend.

Second, they have an increasing number of agencies on their roster and find themselves devoting increased time to manage and co-ordinate these agencies. Time that would be better served actually marketing.

Third, procurement has been very helpful reducing the cost paid to the agency, if only the savings were returned to marketing so it could be spent on one of the many new channels they are considering. But meanwhile the agency is looking for ways to cut their own costs to remain profitable, usually by getting increasingly more junior people working on the account.

From this perspective, any changes to the agency roster could simply be seen as changing deckchairs on the Titanic. Consolidation to either a full service agency, or a holding company solution or perhaps the ‘P&G’ lead agency model is simply outsourcing the problem to a third party who has much to gain with the increased control and share of the marketing budget.

Also, all of these roster solutions usually require the marketer accepting a compromise on quality across the specialist capabilities they require, plus it can create a bottleneck, which will slow down response rates – not ideal for services based industries like telecommunications, travel and hospitality or financial services.

So what is the solution? Well, many in the C-suite are waking up to this challenge and in response we have seen Zero Based Budgeting for marketing become a global trend out of the US, especially for consumer goods businesses.

Many marketers struggle with ZBB as it requires a marketing budget to be built from nothing based on return on investment. Can you think of a faster way to bring focus to the infinite array of marketing activities you could undertake?

At the very heart of the agency roster debate is the role of the marketer. Some talked about the marketer being the integrator. There is also the Ring Master, the Conductor and any number of other metaphors. But if marketers are finding their agency rosters are too complicated then the starting point is not to simply restructure them in a way that outsources the problem, but to review and align their roster to their specific strategic needs. And if those strategic marketing needs are complicated and complex then perhaps it is time for the marketer to look to achieving some marketing genius by “Taking the complex and making it simple”.

To achieve this you need to articulate a results focused marketing strategy, rather than simply being a marketing service provider to the business. Second, you need to identify and appoint the resources you need internally and externally to deliver that strategy, no more and no less.

Finally, you need a small allocation in the marketing budget to ‘test and learn’ new opportunities in a controlled and accountable way.

Darren Woolley is the managing director of TrinityP3


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