Are clients taking advantage of the agencies?

Arecent blog by my colleague Anant Rangaswami on the website observed, “Increasingly, we see more and more brands calling for ‘reviews’, which is a shitty euphemism for pitches.” If recent trends suggest that the average tenure of the agency-brand relationship is shrinking, we decided to ask a few clients their opinion on the matter. Citing the example of Volkswagen’s 50-year relationship with DDB, Lutz Koethe, chief general manager, marketing and PR at Volkswagen India, said, “Such relations are extremely important since the agencies need to understand the brand, its culture, the products on offering and the customers, to be able to deliver in accordance to the client’s requirements. Grasping these aspects take a while and there is always a continuous learning process in both directions.”

Ajay Kakar, chief marketing officer of financial services at Aditya Birla Group, said, “I come from the old school wherein I believe that client-agency relationships are for life. I see an invaluable role that agencies can play in co-creating a brand - if and only if they invest adequate time, attention and passion on the brand.” He added, “It is not easy or practical to change agency mid journey and build your desired brand in the same breath. But if a client-agency-brand relationship is not working, what’s the option?”

Suprio Guha Thakurta, managing director of The Economist in India, agreed, “A sensible client would have to be really upset to go through the bother of shifting.” He also reckoned ‘review’ wasn’t a word to be afraid of. “I also think that all relationships should have reviews. I have one with my company every year. I wish it were more frequent,” he said. “At the end of the year, there always seems to be a gap between an employee’s perception and his manager’s about performance. Why does that happen? Near term events, especially negative ones, weigh larger than good work done in the past. That’s human.” He went on to add, “Agency managers should insist on at least a half yearly formal objective review. It just might help in the long run.”

For Rameet Arora, senior marketing director of McDonald’s India, while he personally endorses “honest, transparent business relationships”, he’s also clear that it is a business after all. “We’re dealing with a market place. With buyers and sellers. And consumers. So if the market is hyper competitive and disorganised, and the marketer believes that the quality of his product can be sustained or bettered at a lower cost, by playing this market, you can’t blame him for playing it,” he said. “The market place is the guiding force for all (almost all) business. So why put such high moral standards to this one.”

Sanjay Tripathy, executive vice president - marketing & direct channels at HDFC Standard Life, pointed out another aspect of the issue – competition among the clients. “[In the insurance industry] We have 23 players currently with more players expected or in the pipeline. I’m sure all of them would want to or currently have a tie-up with good partners for creative or media services. This forces players to share their creative resources through one agency, which in turn restricts inputs and involvement from the top management at the agency end,” he said. Kakar had an interesting observation to indicate the way forward. “I see independent agencies getting the most out of this trend. They promise and deliver personal attention and passion to every account,” he said.

Marketer

Suprio Guha Thakurta, managing director India, The Economist Group

“I think that all relationships should have reviews. I have one with my company every year. I wish it were more frequent. At the end of the year, there always seems to be a gap between an employee’s perception and his manager’s about performance. Why does that happen? Near term events, especially negative ones, weigh larger than good work done in the past. That’s human. Agency managers should insist on at least a half yearly formal objective review. It just might help in the long run.. ”

Ajay Kakar, chief marketing officer, financial services, Aditya Birla Group

“It is not easy or practical to change agency mid journey and build your desired brand in the same breath. But if a client-agency-brand relationship is not working, what’s the option? More and more clients are expressing their dissatisfaction. They are forced to look out for the eternal love and attention they are seeking, but not getting in their current relationship. With the ensuing musical chairs of shifting mandates, I see independent agencies getting the most out of this trend. They promise and deliver on it - personal attention and passion to every account.”

Rameet Arora, senior marketing director, McDonald’s India

“We’re dealing with a market place. With buyers and sellers. And consumers. So if the market is hyper competitive and disorganised, and the marketer believes that the quality of his product can be sustained or bettered at a lower cost, by playing this market, you can’t blame him for playing it. The market place is the guiding force for all (almost all) business. So why put such high moral standards to this one.”

Marketer

Sanjay Tripathy, EVP - marketing and direct channels, HDFC Standard Life

“It’s more a case of the clients having good quality options in terms of creative/media agencies to choose from which is prompting them to go in for reviews and change. In today’s dynamic business environment and changing competition, clients expect agencies to add value continuously and not rest on the laurels of one superlative delivery or past credentials alone. The setting up of shop by international creative houses and media giants in India bodes well for the business community as well as for the advertising industry and will go a long way in raising their bar to international standards.”

Lutz Koethe, chief GM, marketing & PR, Volkswagen Passenger Cars, Volkswagen Group Sales India P Ltd

“Such relations are extremely important since the agencies need to understand the brand, its culture, the products on offering and the customers, to be able to deliver in accordance to the client’s requirements. Grasping these aspects takes a while and there is always a continuous learning process in both directions. However, saying this, it is equally important to have a check on performance of the partner and hiring new agencies comes into question only when performance falters.”