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IPA focuses ad industry around call for a ‘relationship contract’

Relationship contracts between clients and agencies could help both sides collaborate better together, end wasteful ways of working, and produce more effective advertising, according to cross-industry delegates at the IPA's Alliances Adapatathon yesterday, 3rd October.

07/10/2013

Leading figures from the client, agency and intermediary sides of the advertising business agreed to look at the creation of standardised relationship contracts between agencies and clients that would help the two parties work better together and lead to improved commercial creativity.

Relationship contracts could cover areas such as: shared expectations and ambitions; behavioural expectations; conduct of review and evaluation meetings; 360-degree feedback; involvement of senior staff; and ‘soft’ measures such as informal meetings and client-agency social get-togethers.

The call came as, for the first time, cross-industry bodies representing the IPA, the Incorporated Society of British Advertisers and the Marketing Society met to hack the future of client-agency relationships in the first of a series of IPA-led industry Adaptathons taking place over the next 18 months. BBC TV and Radio 4 presenter Evan Davies hosted the event.

Ian Priest, IPA President and international managing director of Chime, said: “As an industry we need to adapt and evolve if we are to produce better commercial creativity. We know better, longer, relationships produce better results.

“Relationships are the high road of collaboration.

“The aim is to focus on an alliance with clients and intermediaries to create movement and momentum. It’s best if we adapt together.”

The Adaptathons are part of Priest’s long-term agenda to drive commercial creativity through a series of cross-industry initiatives, starting with better relationships, and including diversification, agility, profit and talent.

100-day plan
Other recommendations to improve agency-client relationships included:

  • During the pitch process, agencies should be allowed to ask the client: “What do you want in the first 100 days if we win the business?”. Heads of Transition should be appointed to establish the basis of the new working relationship.
  • Clients and agencies should draw up a charter to cover the first 100 days of a new relationship, including the scope of work expected, the role of the outgoing agency, and agreeing areas of working practice such as briefing and sign-off.
  • Agencies should appoint a Head of Client Retention in order to emphasise the value they put on long-term relationships, and to celebrate and recognise relationship milestones.
  • Study best practice in managing multi-agency models to reduce tension, conflict and lack of clarity.
  • Recognition of the value of third-party mediators in achieving continuous improvement in relationships.
  • Include client procurement departments in the relationship from the beginning.
  • Joint training for agency and client staff in relationship management skills.
  • Measuring effectiveness - create an award for the best client-agency relationship.

The recommendations were the result of a giant hacking session by over 200 delegates covering relationships in three areas:

  1. Starting as we mean to go on
  2. Continuous improvement in relationship management
  3. Dealing with complexity – working better together

Clients represented included Avis, BT, Virgin, RSA, Lloyds Bank, Sainsbury’s, Unilever, Marks & Spencer and Kopparberg.

Led by cross-industry working groups from the IPA, ISBA, The Marketing Society and intermediaries including Oystercatchers, the AAR and Aprais, the aim is to turn the recommendations into a series of potential pledges, action plans and initiatives within 100 days before reporting back via the IPA.

Other key themes, observations and highlights

  • The average length of the client-agency relationship has fallen from 7.2 years in 1984 to just under 3 years in 2013.
  • Large agencies spend an average 99 person days and £178,000 on a pitch; medium-sized agencies 72 person days and £90,000; and small agencies 47 person days and £65,000.
  • Pitching costs clients an average £32,000 in time costs.
  • It takes the client six to nine months to bed in a new agency, according to Co-op Group brand director David Magliano.
  • VW UK has worked with DDB for 50-plus years and has three of the UK’s top-selling models.
  • 94pc of Adaptathon delegates agreed or agreed strongly that “clients get the advertising they deserve”.
  • BT chief executive Gavin Patterson said that it was up to client marketing directors and chief executives to ensure procurement “did not dominate” the agency relationship. “There’s a risk if you judge by price alone. But it’s much easier if you look at value because you can see if it’s there in the business relationship.”
  • The five words that best express a win-win relationship, according to a delegate vote, are: trust, honesty, respect, partnership and openness.
  • The first 100 days of a new agency-client relationship are the most important in setting the right tone. Agencies should behave as though they are in a pitch situation until their first work appears.
  • Agencies are under the most stress during the pitch; afterwards, it is the client who is most stressed as they wait to see if the agency lives up to expectations.
  • According to John Kearon, CEO at Brainjuicer, clients and agencies have different views of how advertising works. Clients believe the persuasion model works best; agencies believe the best ads make people feel something and are focused on emotion. “It is this difference between client and agency that is at the heart of bad relationships,” he said.
  • Relationships expert Julie Hay advised agencies and clients to adopt the concept of ‘stroking’ (stroking is an inter-personal unit of recognition) and understand better the stroking preferences of those they work with. “People respond positively to touch,” she said. Hay’s self-assessment questionnaires will be available to download from the IPA Hub.
  • The IPA is to offer free relationship counselling for the next 100 days from counsellor and psychotherapist Alison Bone.

Quotes of the Day

Ian Priest, President of the IPA and international managing director of Chime: “I want to see a headline in the press that says ‘number of pitches falls’ because we should be celebrating the length of our existing client-agency relationships rather than just focussing on the number of new pitches we are taking part in.”

Paul Bainsfair, director general of the IPA, said about relationships: “It all sounds so damn simple. So why is it so darn complicated?”

Gavin Patterson, chief executive of BT, said: “Our business thrives when our agency thrives.”

Craig Inglis, marketing director of John Lewis, said: “We [John Lewis and adam&eveddb] are happily dysfunctional. We’re equal. My proudest moments are when I see the people within the agency arguing in front of me.”

Dominic Grounsell, personal marketing director RSA Group and chairman, ISBA Executive, said: “Clients don’t enjoy pitching. It’s stressful.”

Tim Male, head of marketing at Lloyds Bank Group, said: “Any client wants to get the best deal [on remuneration] but we want our agency to succeed as well and meet objectives. The point is they are common objectives and ultimately they get to make a return.”

Agencies and clients can also join in the debate and make suggestions during the next 100 days on the Adapt Hub and LinkedIn.

Last updated 07/10/2013


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