Reward loyalty instead of promiscuity
A client focus on price and transparency puts agency relationships at risk and undermines the chances of producing long-term results, according to the former CMO of Aviva.
Jan Gooding told the recent Mediatel Future of Brands conference that her agency background had taught her the value of nurturing the relationship with a client – fixing problems because of the cost of moving and the desire to have consistency and understanding about their brands.
When she became a client, her decision to run a global media pitch at Aviva was driven by strategic factors: the insurance brand had been working in some capacity with every network somewhere around the world, “so I was trying to create some consistency in strategy for the brand, in approach to media for the brand.
“I wasn’t particularly looking for savings, but I thought there’d be some,” she added. Rather more than some, it turned out: “eye-opening” amounts, millions of pounds.
This was a “prize” no-one had expected, but the prize came with downsides. “The procurement people got an appetite for that level of saving.” (For more, read WARC’s report: Procurement and the client-agency relationship.)
Consequently, media budgets came under pressure, as the easiest way to achieve the demanded annual savings, and an angry Gooding compared the results to the early days of the mobile phone industry when churn was an issue as rival networks were effectively giving away phones to consumers.
“People will switch network because you were a mug if you didn’t,” said Gooding, and much the same applies to clients switching agencies now.
And having switched in search of a lower price, clients then fret about the media agency’s role in trading media.
“I don’t want to look in your knicker drawer, but I do want to know that if I’m paying you a fee for your service, you’re on my team, working on my behalf,” said Gooding.
“And that’s how I’m going to get value in the round – which is your strategic thinking and, yes, I’d like a bit of your negotiating skills, thank you very much.”
Rather than demonise procurement, however, Gooding advocates the need to “get back to an idea of rewarding loyalty instead of promiscuity” – a development that would entail agencies being willing to sign up to the client’s objectives – which might be two to three years out.