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By Bridget Arik
RedMill Solutions’ Chief Operations Officer analyses the nuances and challenges of client-agency relationships and how pitching can be streamlined in times of uncertainty.
The Risk of Data Oversight
“without true oversight of all data relating to each individual pitch submission, brands are in danger of not being able to see the wood for the trees, which in turn can lead to poorer pitch outcomes”
The global economy’s rocky start to 2023 has not abated. In the quest to separate from the pack, many brands have jumped to find a new agency partner. BMW, for example, started a review of its North American creative, media, social and CRM partners, while Lego recently announced a global agency review.
With the collapse of Silicon Valley Bank still causing tremors, and half of UK consumers cutting non-essential spending, this re-examination of marketing agency relationships comes as no surprise. The pressure on advertisers to walk the tightrope between effective marketing and tight control of spending means that client-agency relationships are under the microscope.
But deciding to break with an agency partner is only the beginning of the long task of running an agency pitch process. As many professionals know, pitching can be a lengthy, arduous – and expensive – process. With management looking to ensure that every penny counts, the pressure can weigh heavy on procurement teams.
Starting on the wrong foot
It’s not surprising that the pitch process can sometimes be opaque and hard to navigate when considering the volume of data required to make a decision, particularly where multi-market pitches are being run. In order to fully evaluate each pitch submission from each competing agency, brand teams need to trawl through information relating to multiple markets, media types, and target audiences, evaluating both price and quality parameters. With agency evaluations likely to be both subjective and quantitative, procurement teams can often be uncertain whether their assessments are truly accurate – are apples really being compared with apples?
This level of opacity is of little help to any of the process participants. With the current macroeconomic situation, the need to drive the best price piles pressure on both advertiser and agency. However, this hyper-focus on savings alone can lead to brands damaging their long-term profitability if decisions are not made with access to all necessary data.
From the agency perspective, this process is also by no means simple. With many lacking the resources needed to ensure pitch submissions are complete and efficiently managed, teams are overstretched. Even if a brand and agency enter into a partnership, the stress of the procurement process and contractual negotiation can lead to relationships starting on rocky ground.
Entering into a more profitable and stable agency relationship with a media agency starts with creating a fairer and more transparent pitch process. And this starts with the very first decision a brand makes during the process.
To outsource or in-house?
The in-housing debate is once again raging across numerous marketing activities that brands undertake – and the management of the media agency pitch process is no different. With the need for this process to go as smoothly as possible, it is no wonder that the argument arises over whether it is more effective to enlist the help of an external procurement consultancy or whether to manage the process in-house.
Certainly, external procurement consultancies bring a number of key advantages to the process. Alongside their knowledge of industry-wide procurement practices, their benchmarking tools and procurement-related industry databases can be vital for gaining a clear view of the true cost-effectiveness of a deal. Where internal teams have an advantage over consultants is in their more in-depth knowledge of the specific needs of a company, their relationships with both internal and external stakeholders, and their ability to view procurement holistically as part of a brand’s wider goals.
Where in-house procurement teams often struggle is their lack of a specialist media pricing procurement tool that can support the decision-making process and ensure complete transparency between advertisers and agencies. There are also often limited resources or expertise within in-house teams to effectively manage the heavy-lifting and number-crunching that is a key facet of the procurement process.
As with any decision a global advertiser makes, those made during a media agency procurement process must be largely driven by data. This includes the decision to enlist the services of an outside procurement consultancy or to build on the in-house capabilities of a procurement team. Using an external supplier can come at a premium, but if not able to easily collect and interpret the large volumes of data that is generated by rounds of detailed bid submissions, in-house teams working alone can be ineffective.
Similarly, advertisers must have a clear idea of what metrics they require their potential agency partners to focus on in order to make the pitch process a success. Without transparent access to all relevant information, procurement decisions can be influenced by biases or assumptions rather than facts.
Tech solutions are vital for providing the necessary clarity that in-house procurement teams need for the collection and analysis of relevant media data. Pitch procurement platforms easily collect and evaluate submissions from potential agency partners by ingesting the wide array of data submitted with each round of pitch bidding, thus massively reducing the burden on in-house teams. With insights collated in one accessible location, procurement teams can work more effectively.
Judging media agency pitches should not just rely on an assessment of future pricing proposals. Instead, procurement teams need to take advantage of historical data to benchmark these against historical performance and predict future outcomes that build in factors such as inflation, deflation and changes to brand investments. Aided by tech solutions that can do much of the heavy lifting ensures that media agency pitches can be more accurately assessed.
Ultimately, it is down to each individual advertiser to choose the path they take with their media agency procurement process. But without true oversight of all data relating to each individual pitch submission, brands are in danger of not being able to see the wood for the trees, which in turn can lead to poorer pitch outcomes. If they choose an in-house pitch management route, global brands need to partner the expertise of their teams with powerful tech solutions in order to gain the granular insights needed to forge an effective and enduring media agency partnership.
About the author
Bridget Arik is Chief Operations Officer at RedMill Solutions
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