By Tim Williams, Ignition Consulting Group
Survey the thousands of advertising agency websites and you’ll find that most of them contain the word “partnership.” As if it were a unique point of difference of some kind, agencies almost universally use “partnership” as a selling point, with language like:
“We are true partners with our clients.”
“We enter into every relationship as marketing partners with our clients.”
“Partnership is the very essence of the way we do business.”
Partner or highly-paid vendor?
TBWA/Chiat/Day’s Lee Clow once remarked agencies need to accept the fact that they aren’t really partners with their clients, but rather highly-skilled, highly-talented, and highly-paid vendors. Most agencies bristle at this kind of language because “vendor” connotes a master-servant relationship when what they desire is a peer-to-peer relationship with their clients – one in which the agency is seen as a trusted advisor. Is Clow right?
In a recent national survey conducted by Ignition on behalf of the Association of National Advertisers and American Association of Advertising Agencies, we learned that most agency professionals actually feel that “partnership” is missing in their client relationships. We heard comments like:
“Clients need to consider the agency as part of the team, not as a vendor who can be replaced by tomorrow morning.”
“Clients should stop holding power and treating agencies like ad factories.”
“Agencies should be treated as a respected business partner versus the low-cost vendor.”
The essence of true partnership
Why the frustration among agencies? Because clients feel that most agency-client relationships don’t really qualify as true partnerships. That’s because the nature of a partnership is shared risks and shared rewards. Agencies may sometimes share in the rewards of a client’s success – such as in the case of a performance bonus – but seldom do they share in the risks.
As long as agencies are compensated as vendors they will likely be regarded as vendors. The truth is, many agencies are in fact paid like regulated utilities, with clients telling them exactly how much they can earn and what their maximum profit margin can be. That’s far from the spirit of a “marketing partnership.”
In partnerships, there must be both an upside and a downside to both parties; in other words, skin in the game. If you’re a partner in a business, there is always both risk and reward.
Agency self-confidence and self-worth
If agencies are serious about becoming partners with their clients, they must stop being so risk-adverse and start having more confidence in the quality and power of their work. When an agency is willing to tie its compensation to the same metrics that CMOs and CEOs are judged by, then they are entering into a real partnership.
More importantly, having “skin in the game” can profoundly change the dynamics of agency-client relationships, leading to increased trust and mutual respect. That’s because you have aligned the economic interests of both parties. In other words, you have a partnership.