Three Guiding Principles for Structuring for the New Environment

There’s no question advertisers want to make sure their agency relationships are “structured for the new environment.” All are seeking the holy grail of optimal alignment with compensation designed to foster ideas that work across all disciplines and all platforms.

And there’s no reason why advertisers shouldn’t get what they need. The only problem is there is no singular approach. No silver bullet, no template, no model to be copied and implemented without significant risk. And, there is no quick fix. Committing an organization’s resources to perform the due diligence, process re-engineering, implementation and measurement requires a significant trade-off between today’s work for tomorrow’s benefit and that assumes the marketer’s organization has command of the skills necessary to achieve this.

Some advertisers have acknowledged the need and committed the resources to great success:

“We’ve gone in the last three years basically from a sort of federation of independent states to a global-brands company,” Mr. Clift (CMO, Unilever) said. “That requires some global tools and processes and … some full-time attention.”

Among those processes is one Mr. Clift believes has allowed Unilever to crack the code for managing integrated-brand communications…"There’s a team of agencies, and we appoint a lead equity owner among the agencies," Mr. Clift said. “But the ideas can come from any of them.” — AdAge, June 30, 2008

But most of what we hear is that despite promises of integration and streamlined idea generation, clients are still waiting for their agencies to deliver one nimble, responsive organization that is media agnostic and agency neutral, one agency point of contact that moves in lockstep with the client marketing organization getting today’s work done while providing relevant, strategic insight for tomorrow, This is realistic for some not for others.

In our experience, we have identified three guiding principles behind successful agency relationship restructuring:
1. Governance: You simply cannot throw the idea of alignment into the air and see which agency grabs it. There is both science and art required to identify the best approach and structure.
2. Active collaboration: A means for constant group think
3. Compensation: Compensation agreements must reflect the mutually agreed-upon goals of all parties and the governing structure.

If you would like to know more about Roth Associates’ experience with providing counsel and delivering measurable and usable results for advertisers please contact us for a confidential conversation.