Do Consultancies Have an Unfair Competitive Advantage Over Agencies?

In a July 3, 2019, commentary on Media Post, staff writer Richard Whitman raised the question of whether consultancies – Accenture in particular – were more conflicted than holding companies.

While some agencies have on occasion refused to participate in agency searches that included agencies held by the client’s auditors, WPP has reportedly declined to participate in Accenture-managed agency searches.

Accenture, as well as a few other consultancies, still provide brands with consulting services which range from in-depth audits of client’s agency contracts, pricing, scopes and processes to managing agency searches (which also gives them detailed access to confidential proposals from participating agencies) and realigning agency rosters. And now of course they all hold a number of advertising agencies and related service providers.

As agency search consultants, we have argued over the years that there is indeed a far bigger conflict of interest than agencies within a holding company offering work to competing brands.

In the case of the latter, most agencies within holding companies don’t talk to each other – nor do agencies within a network of offices unless they share an account. This is not as true, however, of media agencies despite the claims of “fire walls,” but that’s a topic for another time.

However, the conflict for consultancies, in our opinion, could rise to unfair competitive advantages over the holding companies and their agencies – whether leading a client audit or managing an agency search, they do indeed receive detailed information that agencies have provided to clients in the form of proposals, contracts, scopes, staffing plans, pricing, and reconciliations.

Despite receiving assurances that there are strict safeguards between the consulting practice and the agency practice, we’ve had a few former new business leaders from consultancies who are now at holding company digital agencies tell us that the consulting team from their former employer did indeed share such confidential information with its agency new business developers.

While this is all hearsay, it’s definitely something the 4A’s and their member agencies should investigate and develop explicit clauses in their client contracts to prevent any unfair competitive advantages by consultancies.

For the ANA, with all its efforts around media and production issues, they should also be developing standards of client ethics around agency audits and procurement to ensure unfair competitive advantages for consultancies are avoided.

And, maybe, the DOJ needs get involved in this issue as well.

Bajkowski + Partners LLC is a leading consultancy providing services to marketing and procurement teams in the areas of agency relationship management, agency search, process audits, contract and SOW development and audits, and other marketing operations related areas. For more information, please visit our website.

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Top 10 Trends for Marketers + Agencies in 2017

Trends and predictions abound, but if we’ve learned anything from the 2016 US presidential election it’s that the unexpected should be expected. So, how should marketers and their agencies plan for 2017? To provide some insights, we’ve collected top trends in reaching consumers as well as client-agency relationships here.

  1. Customer experience 2.0. Developing a more effective strategy will come from improved insights, not necessarily more data – this requires people who are visionary, not just analytical. Experimentation and calculated risk should be part of your marketing mix. Given the complexities of reaching  today’s consumers, marketers need to consider so much more. Reaching influencers and facilitating brand experiences without commitment are growing in importance. Expect to see experiential and event marketing play a more important role in the mix over the next few years.
  2. Content marketing takeover. With more people than ever getting their news and information about brands online, smart marketers will shift their messaging to driving value beyond the standard products and services offerings. Despite the rampant “fake news” during the recent US election cycle, consumers still believe what they view on digital far and away over more traditional media (who knows how long this will last!)  They get that native advertising is sponsored content, but so far they don’t seem to care much. As Content Marketing Institute’s Joe Pulizzi recently tweeted, “Native advertising is the ‘gateway drug’ to #contentmarketing (in a good way)”. And social media is where more people each year are getting their news and brand information.
  3. Mobile is more than a smartphone. According to the Direct Marketing Association (DMA), 4 out of 5 Americans always have their smartphones with them wherever they roam. But more and more people are also carrying their iPads®, Kindles®, laptops and wearable devices too. That means your content and messaging needs to work across a multitude of mobile platforms, and you’ll need to serve the right content format at the right time.
  4. TV has nine lives. Every time we read about the death knell of TV, it seems to come from someone who benefits from non-traditional media growth. In viewing trending data – viewership, ad spend, and the like – TV is still king. The younger generation is still watching TV programming – just not necessarily on the big plasma TV. As all generations look to cut the cord, TV will continue to reinvent itself to remain relevant to viewers. However, advertisers also need to reinvent their TV spots to be more engaging if they want to be viewed and not skipped.
  5. Influencers are the new celebrities. While we have yet to see influencers take over the  pitch role on traditional media, the likelihood of this changing is quite strong. Influencers are gaining traction when it comes to pitching brands on new media channels, particularly social media. According to a recent report by Celebrity Intelligence, social media influencers were among the top celebrity brand endorsers in 2016. Those with strong social media followings have talent managers, such as Gleam Futures, and they foresee marketers shifting the celebrity / influencer mix even further in 2017.
  6. Speed to market is everything. With CMO shelf-life at 2-3 years, increasing pressure to deliver immediate and short term results is critical. Long term planning and lead times seem all but dead. Agencies must be nimble and innovative – however, this is often challenging as marketers typically have too many chefs in the approval process.
  7. Analytics and Insights 2.0. Data is a great thing, but not if you’ve got faulty data. Marketers need to leverage new tools and methodologies to collect, mine and scrub their customer data. Otherwise garbage in – garbage out. But analytics that rely on simple math, 1+1=2, can turn out faulty insights because it assumes that people behave consistently. People are not math equations. We’re messy and can be inconsistent in how we think and behave at times. Just look at how all those 2016 presidential campaign predictions turned out! What people say is not necessarily what they’ll actually do. So your analytics team needs to include behavioral scientists, not just number crunchers.  Real insights will tell you whether 1+1=2, 15, 5 million or a negative integer. 
  8. More integrated agencies and blurred swim lanes. Over the past 10 years, we’ve seen the agency marketplace dramatically morph, with the biggest game-changer being  advancements in technology. New media and technology created an explosion of specialty shops while the big agencies decoupled their digital departments into standalone agencies. But that pendulum is swinging back a bit as more agencies offer full service once again, bringing big digital capabilities back inhouse or occupying the same building as a sister digital agency so they can claim one-stop-shop and easy integration. However, these swim lanes continue to blur and new competition has disrupted the agency landscape. Technology companies are adding digital creatives to their teams. Consulting companies, having expanded their practice offerings from technology advisors to forming full service digital marketing agencies (we’ll address the huge conflicts of interest in another post), are now in the top ten largest billing agencies in 2016 according to AdAge. Now marketers are feeling overwhelmed as they realize it’s not so easy to manage and integrate a huge agency roster, nor is it easy to determine what that agency roster should look like. Hence trend #9.
  9. Agency rosters will continue to morph. While the ANA recently reported that more than half of marketers foresee a review of their lead agencies in 2017, and others report the demise of the AOR, there’s a greater complexity at work than these statements would have you believe. First, the AOR model is not dead. Like anything, it’s a pendulum – some marketers are trying a pool of “lead agencies” while others are moving back to an AOR model with narrower scopes. What we see with our agency searches are clients looking to smartly curate their agency rosters. This varies from clients expanding the agency brain trust while also reducing their spend on agency compensation, to cutting the roster to an AOR or two with a handful of pre-approved project agencies. In fact, we’re seeing more project agency searches as well as the addition of specialty agencies such as those focused on experiential or millennial marketing for example. So if you’re on the roster, you need to realize that building a client relationship means not taking the relationship for granted. And for those looking to get on the roster, focus on what your agency does best and seize opportunities to start out on a project basis. Plenty of agencies that started as a project or Tier 2 agency grew the business because they delivered beyond the marketer’s expectations – in terms of the work, the results and the speed to market.
  10. Greater transparency and oversight. The recent ANA and Ebiquity report on media agencies revealed there are still flaws in agency contracts and the overall relationship. Marketers need to not only modernize their agency contracts, particularly media, but should be reviewing terms every 2-3 years rather than just updating the annual SOW. The media landscape and technology are changing too rapidly to leave agency contracts in park. Expect to see updates to key contract terms as clients strive for greater transparency and cost controls while agencies expand their business offering to include intellectual property rights (IP), business consulting services, and proprietary technology. Note to marketing and procurement:  create your own agency contract forms that have uniform basics and then channel / discipline-specific terms.

While this list is certainly not exhaustive, it should factor into your planning for the upcoming year. And of course, having a contingency budget. If we’ve learned anything over the past ten years it’s that marketers and their agencies need to be prepared for the unpredictable, and take greater risks in setting those trends rather than clinging to a “wait and see” approach.

 

Bajkowski + Partners LLC is a leading consultancy providing services to marketing and procurement teams in the areas of agency relationship management, agency search, process audits, contract and SOW development and audits, and a number of other marketing resource and marketing operations related areas. For more information, please visit our website.

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Comment on Ad Age Article “Agencies Look to Defend Intellectual Property Rights in Reviews”

Our response to an article that ran in today’s Ad Age about the “4A’s Missive Sent to Search Consultants Argues for New Agreements in New-Business Pitch Contracts”

Rather than trying to put the onus on consultants to add a “creative ownership” clause to its contract with the client, how about if the agencies refuse to sign any mutual confidentiality contracts that have clauses transferring the ownership of agency pitch IP to clients without compensation.

We also believe this is a telltale sign of how a client views the agency relationship and work product – if they don’t respect it now, it’s not going to get better later. This is also the kind of client we prefer not to do business with.

Honestly, we’ve never come across a situation where the client did not understand that any work shown by an agency during a pitch is still the IP of that agency unless some monetary consideration is negotiated. It’s not like the pitch work is a new business tchotchke.

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Laura Bajkowski of Bajkowski + Partners Among “Top 25” Honored at HSMAI Adrian Awards Gala

NEW YORK, NY – The Hospitality Sales & Marketing Association International (HSMAI) has selected Laura Bajkowski as one of the “Top 25 Most Extraordinary Minds in Sales and Marketing” for 2009. The seventh annual list recognizes the “best of the best” in the hospitality, travel and tourism industries, and the recipients will be honored during a private ceremony preceding the Adrian Awards Gala on Feb. 1, 2010, at the New York Marriott Marquis, and will be recognized on-stage at the Gala.

The 2009 “Top 25” recipients were judged by a panel of senior industry executives for their recent work based on the following criteria: creativity and innovation; cutting edge sales or marketing campaigns; triumph in challenging situations; and sales efforts that resulted in dramatic gains.

Laura Bajkowski, principal of consulting firm Bajkowski + Partners, is a results driven marketer with 25 years experience with global brands such as Celebrity Cruises, IHG, Forte Hotels, Hilton Hotels, Le Meridien, Choice Hotels, Best Western, Delta Airlines, Lufthansa, and Saudi Airlines as well as leading brands outside of the travel category such as Walmart and Verizon Wireless. Her career began with international communication agencies, McCann-Erickson, and JWT, before joining Choice Hotels International as Vice President, Advertising and Marketing Communications where she launched an innovative and integrated marketing communications strategy and award-winning campaign. Laura is also a member of the American Marketing Association, Advertising Women of NY, and HSMAI, and twice named one of the 100 Most Powerful Women in Travel by Travel Agent Magazine.

“The Top 25 is a ‘hot list’ that celebrates the sales and marketing leaders and innovators of our industry,” said Robert A. Gilbert, CHME, CHA, president and CEO of HSMAI. “The creative strategies, passionate dedication and sharp intelligence of these professionals have not only made a difference within their organizations but have also truly raised the bar for the hospitality industry as a whole.”

“This honor is especially meaningful to me as I have been recognized by my peers as well as endorsed by HSMAI and I am exceedingly grateful for this acknowledgment.” In addition to celebrating Laura’s award-winning work, the Gala will recognize the top achievements in advertising, marketing and public relations in the hospitality, travel and tourism industries with the Adrian Award.

Tables and tickets for the HSMAI Adrian Awards Gala are on sale now. Tables of 10 can be reserved for $3,750 per table or $375 per ticket. For more information on the HSMAI Adrian Awards, please contact Desiree LaFont at (703) 506-3297, email AdrianAwards@hsmai.org, visit www.adrianawards.com, or follow Adrian Awards news on Twitter at twitter.com/AdrianAwards

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Bajkowski + Partners LLC, headquartered in NYC, is a specialized consulting firm providing global and regional clients with marketing management and agency search consulting services that deliver customized solutions to today’s business challenges. Laura Bajkowski is managing principal of Bajkowski + Partners and can be reached at Laura@Bajkowski-Partners.com. Bajkowski + Partners, 6 Varick Street, Suite 4A, NY, NY 10013; (212) 226-3919; www.bajkowski-partners.com

Also view on HotelExecutive.comHotelNewsResource.com, and Hotel-Online.com

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