Media Agencies Must Provide Value Beyond Buying

Changes in consumer behavior and technology are driving seismic shifts in media buying. Marketers are feeling this acutely as they reach out to media agency partners for strategic support and solutions. At the same time, media agencies are struggling to carve out ways to differentiate — broadening capabilities and moving into new marketing realms. 

The result: a crowded market where it’s difficult to identify which agency partners can strategically engage customers through paid media.

In our Vendor Landscape: Media Buying Agencies (subscription required), we surveyed marketers and over 40 agencies and found an environment where efficient buying is table stakes.

Marketers want media agencies to provide value beyond planning and buying with:

  • Data-driven strategies
  • Cross-channel measurement
  • Creative ideas
  • Unprecedented, but necessary, transparency

Marketers should read this report to understand how media agencies are evolving and what to prioritize in the agency selection process.

I am currently taking inquiries and offering advisory on this topic.  Please reach out to learn more or share your experience in media agency selection.

Why Agency Culture Should Matter To Marketers

Marketers often voice their frustration to me about the rate of turnover at their agencies.  It is hard to lose a great team member, but it’s more difficult to be left holding the bag for bringing someone new up to speed on the business. 

And this happens frequently. Agencies compete with each other, tech companies, startups and brands to attract and retain the best employees. Many use culture as a differentiator in the talent wars.  In fact, 77% of agencies we surveyed listed culture as a way to engage and retain employees.  Even with these efforts, agencies suffer from low employee morale and rising employee turnover. 

For this reason, it’s critical for marketers to pay attention to an agency’s efforts towards building and nurturing its culture.  Marketers that build this evaluation into the agency vetting process and look for a cultural fit will experience less turnover on accounts, higher quality work and a better relationship with their agency.

And agencies that connect leadership behavior, hiring efforts, employee engagement and new business efforts to culture will build working environments that attract and retain talent, while delivering superior client experience.

Read Ignore Your Agency's Culture At Your Own Risk to learn more and reach out to me if you’d like to learn more about how to integrate a culture assessment into your agency search or relationship.


Will Dentsu Seize The Opportunity With Merkle?

This post is co-authored by Shar VanBoskirk, VP and principal analyst at Forrester

On Monday, holding company Dentsu Aegis announced that it acquired a majority stake in Merkle, which is known for its CRM, data, and digital marketing capabilities. Logistically, this acquisition allows Merkle to increase its international presence, while beefing up Dentsu’s US coverage and allowing it to diversify outside of Japan. This acquisition is also important because Merkle was one of the last large independent agencies, which leaves slim pickings for marketers hoping to work with an agency not subject to holding-company rule (read: less autonomy, less entrepreneurial). 

Dentsu Aegis is not unique in its acquisition of a data/CRM agency. All of the other holding companies have them too (WPP has Wunderman, Publicis has Rosetta [now Razorfish Global], IPG has The Hacker Agency, Omnicom has Rapp and Targetbase). This is because “customer relationship management” has broadened beyond direct mail and email marketing to include loyalty initiatives, ownership experiences, data strategy/modeling and technology integration — critical data and insights solutions for holding companies to provide to their clients. 

With reported 2015 revenue at $436 million, Merkle will be Dentsu’s fourth-largest agency, behind Dentsu (the agency), Carat, and Isobar. With this move, we think that Dentsu’s should make CRM and data-driven marketing the centerpiece of its agency strategy — not just an additional services offering. 

This is a smart move, given that:

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Hit Restart With Your Media Agency

In collaboration with Susan Bidel, Richard Joyce and Jim Nail

Yesterday, the ANA released the findings from an eight month research study into the issue of transparency within the media agency industry.  The findings are damning, but not surprising for those who have been following this issue. The phrase in the report that caught my eye was this: “evidence of a fundamental disconnect in the advertising industry regarding the basic nature of the advertiser-agency relationship.” 

In other words, it’s the advertising-agency relationship that stinks.

Look past the rebates, the free cash disguised as “research and consulting” and the media mark ups and what you’ll see is the advertiser-agency relationship that has been under strain for years has finally completely collapsed.  Three factors have driven the industry to this point:

  • Agency success metrics tied to an outdated approach. Clients expect high impression levels, high click volume – all at a low cost. This doesn’t allow a lot of room for media agencies to show additional value beyond scale and efficiency. The result is that agencies continue to look for opportunities to drive more impressions and lower CPMs without any accountability for real business and revenue impact.
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Introducing The Forrester Wave™: Digital Experience Service Providers

Coauthored by Anjali Yakkundi
“We can improve your digital customer experience with our strategy, design, and technical chops.” Does this pitch sound familiar? Digital agencies, consultancies, and technical services firms are all racing to be your digital customer experience partner. They have merged, acquired, and built new practices to meet the multidisciplinary needs of both technology and marketing leaders. 
Anjali and I evaluated this market — the digital experience services market — to find which vendors are best suited to help marketing and technology buyers deliver digital customer experiences. The result was two reports, one written for technology leaders and one written for marketing leaders. In both, we evaluated the top 11 vendors — Accenture Interactive, Deloitte Digital, DigitasLBi, IBM Interactive Experience, Infosys, Isobar, MRM//McCann, Razorfish Global, SapientNitro, VML, and Wipro — and probed into their strategy and customer traction. Our criteria spanned three main areas: 
  • Digital customer experience strategic consulting offerings.
  • User experience and design offerings. 
  • Digital experience platform implementation and integration offerings. 
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Why Performance-Based Agency Compensation Doesn't Work

I embarked on the topic of performance-based agency compensation because I was getting A LOT of questions about it. Mostly, folks wanted to understand how to structure it. 

As I set out to answer that question, I uncovered a topic that is probably one of the most hotly debated topics in the industry. People are passionate – on the agency side, on the finance side, on the procurement side, and on the marketer side. Everyone has an opinion.

So, instead of doing a straightforward report on how to structure performance-based compensation, I took a step back to dive into whether performance-based compensation is actually achieving the desired results – which is better performance from agencies.

I found that:

  • Performance-based compensation, as it is most commonly structured and applied, is being used as a stand-in solution for a much larger issue – the fact that CMOs are having a very hard time measuring and explaining the impact of their agencies' work on ultimate business outcomes.
  • Adding financial incentives to agency contracts gives organizations a way to measure the impact of agency work and assign that impact a monetary value.
  • These organizations are not getting better work from agencies because of this. And by using performance-based compensation as a motivator, they are missing an opportunity to truly motivate their agencies.
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Innovation Agency Wave: Learn more about the 10 agencies driving innovation

I am very excited to announce that the Innovation Agency Wave is now live! 

Marketers need data, technology support, ideas, experience design, and change management — not just channel expertise — in order to differentiate themselves in the age of the customer. To accommodate, agencies are redefining their core competencies to better align with three areas of marketers' demandinnovation around products and business models, integration of channels and customer data, and implementation of enabling technology systems.

This research reminded us that "innovation agency" is a label that Forrester assigned to agencies with specific aptitudes. Most agencies don't have neatly packaged innovation offerings. But those we reviewed do offer strategy, change management, customer experience, and design and development services — capabilities that are core to enabling digital business innovation. Since CMOs may not find a standard blueprint for an innovation agency, this wave provides guidance as you review potential innovation agency partners. 

In addition to the report, please make sure to download the interactive scorecard tool to build your custom wave and gain a more in depth look at each agency.

I’d like to extend a huge thank you to all of the agencies that participated.  The teams that I worked with are all so talented and put in a lot of time and effort, which I appreciate. 

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It’s Time To Revamp Your Agency Roster

Continuing the theme of agency selection, my next report, Revamp Your Agency Roster To Lead A Connected Brand Experience (subscription required), came out yesterday. 

This report helps CMOs reorient themselves to the shifting agency landscape and identify partners to help move them from channel expertise to leading a connected experience.

In establishing this new model, CMOs must partner with agencies to:

  • Create transformative experiences
  • Craft and distribute a connected brand story
  • Deliver technology to drive a connected brand experience

This report makes up the Performance Management module of the Brand Experience Playbook.

Please reach out to schedule an inquiry if you would like to discuss further.  I look forward to hearing from you.

Screen For These Four Criteria During Your Next Agency Search

Being asked to pitch for a new piece of business strikes both excitement and fear in the hearts of many agency folk.  When I started research for my latest report, The Fit Test For Strong Agency Relationships, there was no shortage of people who wanted to weigh in on how to make the process better for both CMOs and agencies. 

After many interesting and spirited conversations, I settled on the four things CMOs should screen for when selecting an agency to help drive their business forward in an increasingly competitive and real-time environment.

Check out my report (subscription required) for a how to guide to screen for:

  • Vision: Does they agency’s vision for the future of consumer behavior, technology and marketing align with yours?
  • Experience: Can the agency provide a fresh perspective to your acute business challenges?
  • Passion: What is the agency doing to create a culture where its employees are passionate about coming to work?
  • Process: Will the agency be able to enact change across your organization?

If you are interested in discussing your next agency search or how to get the most from your current agency relationships, please schedule an inquiry with me.  

Navigating The Post-Digital Agency Landscape

I recently joined Forrester’s CMO team as a principal analyst covering agencies — the world where I spent most of my time over the past 15 years. I have been fortunate enough to have worked at thriving agencies as they have undergone major change: Avenue A as it built out its media capabilities and tools; OMD at its start — merging four strong media divisions to form one media buying firm; and for the past five years, 360i as it grew from a search powerhouse into an award-winning full service digital agency.

As marketers shift their focus to become more customer-obsessed, agencies are evolving to provide the strategy and services needed to usher brands into the age of the customer. My research will focus on how CMOs can navigate and nurture their agency relationships and how agencies can evolve their businesses in the post-digital agency landscape.

I explore this further in my report "Brief: Business Models Determine Agency Strengths," which details the role of an agency’s business model in setting its focus on innovation, integration, or implementation.

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