Marketing Procurement

Global Agency Relations Management – Acceleration of Change

Agency Relations Management

“Pull Quote”

It is increasingly important for brands to have a strong agency management practice with clear leadership on core capabilities……[with] special attention to building a collaborative working model across the teams as it is more critical than ever

In a recent WFA survey only 15% of respondents were ‘very clear’ when it comes to the roles and responsibilities for global agency relations management. But change is coming.

Roles and responsibilities within the same company can get blurry when it comes to global agency relations management. This is because it may involve teams from marketing, marketing operations, agency management, marketing procurement and supplier relationship management (SRM) on very similar or complementary tasks. This can create some internal confusion and lead to inefficiencies.

Over the past six years I have squarely focused on the practice of strong agency management and during that time I had the opportunity to attend many conferences and committee meetings focused on this growing area.  In these sessions and at these events we all openly discussed topics relevant to marketing sourcing teams. Often, we ended up getting into a conversation on how companies were organizing their procurement, marketing operations and agency management functions.

In 2019 a World Federation of Advertisers (WFA) member was interested in this very topic and made a request to the organization for more information. They wanted to know how other member companies are organized and how the roles related to agency relations management (ARM) are split across their teams.

To find out more the WFA worked collaboratively with my consultancy ASM & Partners, conducting a member survey. The survey was designed to gain some insights into how companies are handling agency management in their organization.

The majority of respondents were senior marketing procurement experts or in charge of marketing operations with a total of 32 different companies participating across 15 different sectors with 72% of them having global responsibility.

Whilst the full findings of the report are only available to WFA member organisations, we are able to reveal the top-level findings. And what the research has found is that only 15% of members were “very clear” on roles and responsibilities related to agency management, or put another way 85% weren’t and of these 27% fell into the combined “somewhat unclear” and “very unclear” camps.

As one member who responded said “In general, rules are clear, but only in theory and in very general terms.  In reality it is blurry….”

But what is quite clear from the results is there is definitely room for increased clarity of roles in most organizations.

From an organizational standpoint about half of the responding members have a marketing operations department, and half have a formal agency management team.

Another key statistic that jumped out was that 69% of respondents expected organizational change over the next 12-24 months

 Another key statistic that jumped out was that 69% of respondents expected organizational change over the next 12-24 months with 30% expecting a high-degree of change.  The key drivers of change mentioned by members ranged from the explosion of tech and tools to the inexorable growth of in-house teams.

7 key drivers of organisational change

1. Increasingly flexible agency and freelancer models
2. Speed to market is even more critical
3. Need for more digital and custom content
4. Explosion of marketing technology and tools
5. Desire for tighter internal collaboration and clarity
6. The ever-increasing availability and use of data
7. Growth of in-house agencies

The challenge was underlined by the comments of one member who said “We have a complex matrix approach which is multi-layered, so it often overlaps or feels resource heavy.”

The survey also looked at 5 key areas of responsibility including:

1. Global agency model and roster strategy
2. Agency scope management
3. Agency reporting, reviews and evaluations
4. Contracts, audits, rates and compensation models
5. Agency and marketing excellence.

For each of these areas, members were asked to identify which department would lead, be accountable, consulted or informed on very specific activities. Here is a high-level summary of the role findings.

 Where no specific organisational model for role exists:

Areas where leadership less clear

• Agency strategy and roster model
• Production model and agency best practices
• Agency on-boarding and operations
• Issue resolution

Areas where marketing are likely to lead

• Agency briefings
• Marketing, training strategy and requirements
• Agency performance KPI’s and targets

Areas where Procurement are likely to lead

• Agency reviews and assessments
• Audits and scope reconciliation
• Rates, compensation and payment terms
• Contract management

When roles exist:

 Ares where Agency Management likely to lead

• Agency production, standard operating model
• Agency scope allocation and review
• Review outputs cascade to internal teams

 Areas where Marketing Operations likely to lead

• Technology / Tools partnership
• Marketing excellence (training, re-skilling)
• Agency operations training program
• Planning and internal ways of working

Supplier Relationship Management (SRM)

• Overall supplier segmentation into Tiers
• Risk and performance company models

 So, what are the 3 key takeaways of the survey and what can you do about it?

1. We expect acceleration of change over the next two years on how companies manage their in-house and agency strategies and this will drive organizations to look at new ways to manage how they work both internally and with their agency partners.
2. It is increasingly important for brands to have a strong agency relations management practice with clear leadership on core capabilities. We suggest you pay special attention to building a collaborative working model across the teams as it is more critical than ever.
3. There is no one size fits all from an organizational model. In order to determine what model is best for your company make sure you take into the account the business, the category, current operating model and organizational design. The roles and responsibilities of each function should also be determined based on the skills, maturity and the integration of the groups.

In conclusion, this survey does not give us the magic answer to help companies know precisely how to organize their teams for maximum effect.  It does however, begin to give us all some insights and shares some possible actions for organizational questions that clients have been asking for years.

The WFA agree, as Laura Forcetti, Global Marketing Sourcing Manager at the WFA commented “It is becoming increasingly important for brands to have a strong agency management practice with clear leadership on core capabilities. Priority should be given to a clear cooperative and collaborative environment amongst the teams. Where roles and responsibilities sit, is arguably less important”

The research outcomes point to clarity and communication being key to success, as Laura goes on to say  “This research will hopefully provide some grounds for brands to discuss what probably matters the most: how can we – marketing, marketing ops, agency relations management, procurement… and external partners, better work together towards shared outcomes?” Laura Forcetti, Global Marketing Sourcing Manager, World Federation of Advertisers (WFA)

From the results we can certainly see that clients expect a high degree of change and it is something to focus on in your organization.  It points out the critical need to drive role clarity and improved operations both internally and with your agency partners.

It’s also worth considering some of the unattributed comments from responding WFA members.

‘Marketing leads, Procurement, Legal and Compliance support’

‘We just had an organisational change and overall Procurement is responsible for the formal agency management process and marketing is responsible for the content’

WFA members can get a full report in addition to the details on where roles sit in member organizations, it also includes some organizational model options for clients to consider.

For more information about Global Sourcing at the WFA visit Global Sourcing Forum or email Laura Forcetti, Marketing Sourcing, Global Lead WFA.

About the author

Jim Wallace is a regular contributor to Marketing Procurement iQ on a range of marketing and agency management and operational issues.

Also by Jim Wallace: Video Production: Sourcing freelance videographers in the gig economy

Jim is an award-winning global marketer with over 25 years of client-side brand experience delivering campaigns that are both recognized and drive results.  He has won a dozen CLIOS including the Grand CLIO, several Cannes Lions, mulitple Gold Effies, and has been named in the Advertising Age Marketing 100.

He is an established leader in marketing operations and agency management who has delivered over $10 million in annual efficiencies for clients.  A pioneer in the growing practice of agency management he often speaks on panels, chaired an ANA agency committee for two years, and was chair of the ANA Advertising Financial Management Conference in 2018.

Using his wealth of knowledge and experience Jim founded ASM & Partners, a US-based consultancy focused on understanding client and agency challenges and opportunities.

By outlining solid plans to optimize for the future, they take a hand on collaborative approach working quickly to deliver results for clients. Their consultants have been in your shoes on the client-side, working on campaigns, with in-house agency teams, and in agency management marketing operations.  They possess a deep knowledge of the challenges clients face.

You can email Jim Wallace here