How about some industry camaraderie guys?
Scott Knox, managing director, MCCA on ISBA report
There has been no shortage of agencies reacting strongly to the recent report from the ISBA, exposing dissatisfaction with agencies over costs and transparency.
However, there is a bigger issue regarding the funding of marketing communications in this sector.
The MCCA annual fees and remuneration surveys show that charge out rates have gone down substantially in the last eight years (as much as 27.5% in some cases). In addition to this, it shows that salary levels have risen very slowly compared to inflation, meaning that the profit margins are being seriously eroded within the agency sector.
Whilst it is important that agencies understand the current difficult situation many clients are in, and the massive constraints placed on their expenditure, the fact is that many clients are guilty of not spending enough time evaluating results, critiquing the success of their agency’s work and actually testing activity before it reaches the public.
At the moment, what we are seeing in the industry is that the time from briefing to execution is getting shorter and shorter. This has resulted in an influx of campaigns that are rushed, lacking in creativity, and poorly thought out.
For example, I have seen clients review creative work on an iPhone between meetings; a far cry from the good old days, when a campaign idea was presented face to face with the client and the agency would deliver the creative idea and a rationale of how it should work.
Another common challenge is scheduling time to have a proper briefing. It is impossible for agencies to deliver work that is accurate and on brief, without having a proper briefing, or worse, no briefing at all.
Collectively, and on both sides, we just need to get back to better practise.
In my view, as an industry we need take heed of the below points:
1. Not enough time is being spent on evaluating whether clients are making the right decisions on the right campaigns, for the right market at the right time. So what do we end up with? Creative that is flat, uninspiring and full of risk averse.
2. If clients aren’t happy with their agency’s remuneration, they should go back to the last agency selection and work out just how much attention was paid to the fee structure, the service level agreements and the evaluation criteria. What they will probably find is that all of this took a surprisingly short period of time, because again, the agency was too much under the cosh.
So now it’s decision time – if clients don’t reorganise their day and reorganise their time, and actually make the decision to find an agency they trust, with agreed service levels, an agreed contractual relationship, agreed fee rates, and so on, then they will never truly believe they are getting a real bang for their buck.
At the MCCA we have been working with a number of clients through our Agency Selector Service, who have come to us after recognising that the relationship isn’t working. Refreshingly, they have put their hand up and said ‘we got it wrong in the first place’. This has enabled us to work with them to sort the situation properly, so that ultimately they can get on with doing their job, rather than agency fire-fighting.
We are seeing an interesting trend amongst our member agencies in pitching for business in other global territories, for brands that want to launch in the UK and compete with existing brands in the market.
These brands are demanding bold ideas, British creativity and are not pressured by over-burden of process. Not to mention paying a fairer rate for campaign activity and as a result of this, they are starting to reap the rewards.
This is a very real threat to brands in the UK, and so it has never been more important for clients to have a proper discussion about remuneration issues with their agency. If they don’t, then I have no doubt that these agencies will export their abilities abroad.
And instead of delivering UK brands great ideas, they will be delivering their competitors great ideas.
So in short, we all need to stop picking holes, and get on with building robust, trusting and profitable agency relationships.
