Our industry is hotly debating the challenges of transparency between agency and client. To make it even more complicated, the debate involves media (programmatic, digital, etc), production houses (specifically TV) and a raft of other potential issues. In short, clients feel (or believe) that they should have a right to full transparency over where their marketing investment is being spent. Agencies believe (or want to assert) that they have disclosed all that is needed, as per their client agreement. Both are probably right.
This is the challenge.
Agencies have evolved from the days of commissions and service fees to an alleged more equitable Fee for Service arrangement. Aided by the agencies, many clients used this as an opportunity to squeeze fees, thereby reducing agency margins. This may have seemed smart but, in the end, everyone needs to eat. Margins need to be maintained and, right or wrong, agencies have simply adapted to meet client demands. I find it remarkable that still, in 2017, I hear other agency professionals talk of clients who have a clear expectation that work should be free. As if.
Transparency is achievable and in the long-term best interests of all. To do so requires smart clients working with smart agencies. It demands agreements that drawn up by those in the know - which, to be fair, most often aren’t directly on the procurement team. Importantly for many, it needs a new approach to agency remuneration. Transparency is a two-way street. Of course, good talent deserves to be rewarded well.
We have an approach that we believe benefits all - one that defines Relationship vs Transactions. Get in touch to find out more.