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The Agency: Your Revenue Partner

By: Dwayne W. Waite Jr.

The Agency-Client relationship has been under scrutiny for quite some time, even more so in the past five years during the financial collapse. Brands are trying to keep the shop roster but cut expenses while agencies are trying to keep the clients and boost the revenue. It is a dance where both partners are trying to be the lead, and the rest of the dance floor is watching, hoping that these two finally get their act together.

When talking about this relationship, the major questions relate to compensation, creative freedom, and blame. The agency world believes that it is consistently undervalued. They slave for a pitch, and if work is created for the pitch, most of it goes unpaid, and then if the shop fails to win the pitch, many times the client gets to keep the work. Let's say the agency wins the pitch, and down the road a campaign the brand and agency works on together doesn't work out as planned. Instead of giving the shop a chance to try again, the brand could start the agency search again without giving the incumbent shop a chance to defend. It's hard to counter the agency world's position. It's tough out there for a shop.

Then, if establishing the relationship isn't the issue, creating an effective compensation plan rears its head. What is the "value" an agency partner creates for the brand? The work? The process? When brands want to look for the ROI for a marketing and advertising campaign, exactly what number are they looking for? An increase in sales? Foot traffic? Or do the brand and agency agree on a number that defines what the campaign is worth? How can the parties decide what this creativity is worth and agree on it?

The last question was discussed at the CISPA Category Week in Sydney, Australia. Agency and Brand personnel came together and talked about perspectives of creativity in the business world. There, Russell Howcroft, CEO of Y&R ANZ and ABC Gruen Regular, stated that agencies have a problem because businesses still see a lack of value in creativity. With this statement, Darren Woolley of Trinityp3 states that this is one of the major reasons why brands still look at price versus work — many still don't know how to measure.

Woolley, a management consultant, suggests that brands look at agencies as revenue partners — the purpose of working with an agency is to boost the brand's presence and recognition, and in turn boost sales (the top line). If the revenue isn't growing, then there's an issue.

Woolley's observation makes sense. If advertising is the language of business, then AdLand should be making deals to help grow business. Brands, then, shouldn't look at AdLand as a Band-Aid solution, but as a partner. Like it took time to perfect your brand's good or service, agencies will need time to get the message right. With this train of thought, measurable results can be found, and the value of work and compensation can be agreed on. How much is a 3% increase in quarterly sales worth to your brand? Establish a value, and both parties can make a deal.

Looks like the two can dance well together after all.

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About the Author

Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.

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