Advertising Agency Clients Get Lost

Interview: Bill Duggan – Association of National Advertisers

At the end of phase one of my advertising career, I became a client of advertising and public relations agencies. As CEO and founder of Advance Internet’s New Jersey Online from 1995 to 1999 I was tasked, along with a very talented crew, to ‘invent’ online newspapers and new advertising programs. To introduce our new service and grow our brand, I wanted to find an advertising agency that could understand the emerging world of Internet-based news and create new online advertising units that captured the attention of this nascent market.

From 2000 to 2002, I was CEO of the natural language company ActiveBuddy. ActiveBuddy allowed users of Instant Message platforms like AOL’s AIM to talk with a computer who became their smart & friendly 24/7 buddy. In that role, I wanted a PR resource that would make our intelligent instant messaging bots like SmarterChild famous, help us build a huge audience (we did), and make us look hot to prospective acquirers during the first dot-com bubble.

With 16 years of agency experience, I knew what I needed from ad and PR agencies to achieve my objectives, and I had a large Rolodex of agency friends to call on.

I didn’t feel lost in my agency search.

Advertisers Are Lost

Most advertisers looking for an agency do not have these contacts or knowledge of the agency world. They simply do not perform enough searches to act as experienced and efficient buyers. Individual agencies are partially to blame for adding to client confusion by not providing a clear point of difference vs. their competitor agencies. There are over ten thousand marketing agencies. Just imagine how difficult it is to pick the right one. That’s why clients get lost.

Some larger clients use the services of search consultants, although this number isn’t more than 10 to 15% of all major searches. Other clients use prior experience, or hopefully, do an Internet search on “how to select an advertising agency” that gets them to expert advice like the ANA/4A’s “Agency Selection Briefing Guidance”.

Speaking of the ANA (the Association of National Advertisers)… here is an interview on the client’s perspective from my book, The Levitan Pitch. Buy This Book. Win More Pitches. 

Interview: Bill Duggan – Group Executive Vice President, Association of National Advertisers

Bill Duggan is the Group Executive Vice President of the Association of National Advertisers. The ANA’s membership includes 590 leading companies and over 10,000 brands.

Bill is primarily responsible for the management of the ANA’s portfolio of marketing and media committees, conferences, sponsorship program, and thought leadership. Prior to joining the ANA, Bill worked in account management at New York’s Grey Advertising and Dancer Fitzgerald Sample.

In 2013, Bill worked with a group of ANA member CMO’s and the 4A’s to write the white paper “Agency Selection Briefing Guidance” which is an update of 2011’s “Guidelines For Agency Search”. Both of these papers represent a detailed review of the issues and best practices for the search and selection of an advertising agency. I believe that it is imperative that advertising agencies help these guidelines get broad distribution across the marketing universe. Send them to your client friends. Well, maybe send them to the clients you want.

PL: Do you have any idea what percentage of your members conduct an advertising agency search each year?

Bill: ANA would not have data on the percentage of members conducting searches or the number of searches. But it’s pretty clear that search activity has increased. A couple of reasons for that:

Media fragmentation: There are more new media types (e.g., social, mobile), and as a result, clients have the need for specialists in these areas. Hence more searches.

Short-term environment: The shorter longevity of the average CMO tenure has been well documented (even though it’s recently been increasing). Of course, new heads of marketing often lead to searches for new agencies.

PL: Are you seeing a reduction in agency of record relationships vs. growth in project work assignments? Are these pitches different?

Bill: Absolutely more project work assignments. I could not really say if these pitches are different.

PL: What do you see as the primary issues of the agency search process that reduce the efficiency of agency selection?

Bill: I think that bad process on the marketer side undermines some searches. Marketers need to realize that there is a direct correlation between the quality of the input that they provide to agency candidates and the quality of the output from those respective agencies. Process ‘worse’ practices include poor briefing, limited involvement from the senior marketer, the search running for too long, clients ‘floating in and out’ of the process and not being part of all critical steps, clients not taking the time to visit the agency.

PL: While there is no standard search scenario, how long does this best-case process usually take?

Bill: Regarding the timetable, here’s what one of our white papers says:

While searches for smaller assignments or reviews that entail a modest scope of deliverables and meetings could move more quickly, the optimal timing for the agency search process should be approximately three months:

Identification Phase: One week

RFI: Two to three weeks

RFP: Four to five weeks

Finalists: Six weeks

PL: From the outside, many agencies, especially by the time they are on the narrow finalist list, start to look alike. What criteria do you think most advertisers use to make their final decision?

Bill: I think chemistry and cultural compatibility are differentiators. Please see Appendix 3 of the ANA/4A’s Guidelines for Agency Search. In many relationships, the client and agency teams spend a lot of time together. Clients need to ask themselves, “Do I like these people and would I want to spend time (including some nights and weekends) with them?”

PL: Does the ANA have an opinion about asking agencies to do spec creative? Shouldn’t advertisers be able to determine an agency’s abilities by looking at their existing portfolios and case histories?

Bill: Clients have the right to ask for spec work … and agencies have the right to say no. I think that a spec work assignment is less about the end deliverable and more about the process. The spec work assignment provides the client with insights on how an agency works and the process involved, and that can be helpful.

PL: Digital, social media, and mobile marketing require specialist skills and experience. How do advertisers select agencies that work in these complex and fast-paced marketing platforms?

Bill: I think that searches for these types of agencies are done in much the same way as searches for ‘traditional’ agencies. But it’s a bit more important in these cases to understand how such agencies collaborate and integrate with other agencies. So those skills should be probed for in these searches.

PL: Are you seeing any macro trends in how advertisers are compensating their agencies?

Bill: Honestly, agency compensation is the topic that many marketers just can’t get enough of – there is so much interest and conversation. But changes to agency comp plans have been slow to come. Performance-based compensation has been around for a while now, but we have seen indications that use is expanding. That includes use by smaller and mid-sized advertisers. Another trend is for some clients to have just one P&L, despite using multiple agencies within the same holding company.

PL: Many agency CEO’s tell me that advertisers are often unwilling to tell them which other agencies are in the pitch. Why would a client choose to not to be transparent?

Bill:I think that it’s fair for the agencies to know who else is ‘in the game’, so I honestly would not know why a client would not be transparent. I see no upside of not being transparent. And it also says something (not good!) about the client.

PL: What percentage of clients do you think use the services of professional agency search consultants? Are you seeing any trends in how search consultants are being used?

Bill: I think that a declining percentage of searches use professional agency search consultants. Since there are more searches than ever before, I would be curious to know if the actual number of searches handled by consultants has held steady or declined. Client-side procurement departments are playing increasing roles in facilitating searches. This to me has been one of the big, recent changes in search.

Some ‘bad’ procurement-led searches have been well publicized: RFIs repurposed from a previous sourcing role that was used for a raw material, far too many questions, especially too many questions on costs, having far too many agencies involved, having the process take too long. ANA has a Procurement Task Force that helps procurement better understand marketing / advertising.

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