We’re approaching mid-year and a quick review of what we are seeing and learning in the agency search space is in order.
We have a pretty good sense of what is happening. We talk to agencies and marketers daily. We conduct 20-25 agency searches per year and not a day goes by when we aren’t active in the space. At any given moment we typically have several reviews underway. We help facilitate reviews in every corner of the marketing services world from creative and media to PR and performance marketing. As I write this we have four reviews underway and several more “teed up”.
What are we hearing and seeing?
Here are the themes that appear to be playing out across the industry:
Clients want help connecting the entire customer journey
If there is a single theme emerging from the era of modern marketing, it’s that it is hard! Most clients lack the staff, systems or data to strategically and effectively manage their marketing budgets across the target audience’s journey in a way that optimizes short or long term returns (much less both).
Clients are also often siloed, adding an organizational constraint on top of an already thorny challenge. This is especially true in media. We’ve conducted media agency reviews representing close to $1 billion in media investment recently, and in most of these reviews an important element was a consolidation of awareness and performance media agency partners. Clients are not looking for siloed partners.
What does this mean for marketers? You’re not alone in your needs and there is a growing list of fine agencies that can help you with your journey.
What does this mean for agencies? Read the tea leaves! At a minimum your agency needs the capability to understand the customer’s journey in every category you want to compete in. You don’t have to be able to execute every tactic, but you need to be able to strategically understand marketers’ challenges across their target customers’ journeys if you are to be able to provide sound advice.
Efficiency is more important than ever
Modern marketers know more about the characteristics, identities, and behaviors of their various target audiences than at any point in history. This enhanced amount of data and knowledge means that marketers can now devise strategies and tactics to impact different target segments in different ways at different points in their journey. And that amazing opportunity requires more of everything to address: more strategy, more media, more creative and content assets, more web enhancements and SEO optimizations, and more analytics.
This increased demand for agency support has not yielded a commensurate increase in agency budgets.
What does this mean for marketers? Prioritization is more important than ever before. The modern CMO must have a process that ensures that the most important company objectives are supported at every level of her organization and at her agencies. And the least important are cut from the list.
What does this mean for agencies? Many agencies have undergone a significant evolution in their ability to support the strategic and tactical needs of modern marketers. However, few have created the systems and processes needed to deliver efficiencies at the scale needed by their marketing counterparts. Agencies that want to prosper in the next 5-10 years must prioritize this reinvention.
Creative reviews appear to be coming back
There has been record CMO movement the past two years. And at Mercer Island Group, the past two years have been our best ever in terms of agency review volume. What hasn’t been happening? Creative agency reviews.
I don’t intend to suggest there haven’t been any; rather, the volume of creative reviews over the past two years was much lighter than we have seen before. One way we can tell is by our own review work, which has been much heavier in media and other marketing services than in creative. Another data point is the outreach we’ve experienced from creative agencies, which has been at record levels recently.
The good news for creative agencies is that we believe the dam is starting to burst and the pent-up demand is finding its way to reviews. If our phone log is at all representative, creative agencies should be much busier in second half 2023.
What does this mean for marketers? Creative agencies are hungry.
What does this mean for agencies? Be ready, Make sure your agency is well positioned, easily found and has a prospect-friendly website.
Strategy still wins: strategic insights yielding brilliant tactics
Clients still need great strategy help, identification of compelling strategic insights, and the delivery of compelling tactics that move consumers to action. The ability to identify compelling insights is the single most important driver of success in the reviews we manage. Stronger insights lead to stronger tactics. The tactics almost sell themselves.
Sadly, most agencies are not strong enough at identifying compelling insights to win more than their fair share of reviews.
What does this mean for marketers? Teach your team the science and art of developing and recognizing consumer insights. Expect strong insight work from your agencies. Look for the insight in the brief and in the proposed tactics. Don’t approve work that lacks an important insight.
What does this mean for agencies? Review your strategy operation and be sure the approaches and outputs are up to snuff. Teach your team the science and art of developing and recognizing consumer insights. Look for the insight in the brief and in the proposed tactics. Don’t share work with the client that lacks an important insight.
Does your team need the skills to routinely develop compelling strategic insights? Join our workshop on July 24 & 25 in Denver. Details are here.
Great service remains critical to client retention
Every year we manage a number of reviews that were triggered by unhappy clients. Clients that were experiencing constant account staffing turnover. Accounts where the strategy work was rarely updated. Accounts where marketers needed critical strategy or tactic support in an emergency and the agency was not supportive. Clients that needed modern marketing help and were given traditional, outdated solutions.
What does this mean for marketers? Maintain a regular top to top call with agency leadership to stay ahead of these kinds of problems. Give your agencies the opportunity to quickly address shortcomings.
What does this mean for agencies? Love the one you’re with or the client will eventually find another agency to love.
Five themes to consider as the year unfolds
We encourage you to consider these themes as you approach second half 2023:
- Clients want help connecting the entire customer journey
- Efficiency is more important than ever
- Creative reviews appear to be coming back
- Strategy still wins: strategic insights yielding brilliant tactics
- Great service remains critical to client retention
Remember: the themes can overlap and impact each other
The same client may need help navigating the customer journey, require greater efficiency and need better creative work. Or they may be troubled by poor service and need great efficiency. Or any combination of the above themes.
What does this mean for agencies? Do the hard upfront work to understand your prospect’s needs. Ask the right questions. Listen closely. Show how you understand the prospect’s challenges by asking the right questions and show how you can be the right agency with your profound approach.
Steve Boehler, founder, and partner at Mercer Island Group has led consulting teams on behalf of clients as diverse as Zillow Group, Microsoft, UScellular, Nintendo, Ulta Beauty, Stop & Shop, Qualcomm, Brooks Running, and numerous others. He founded MIG after serving as a division president in a Fortune 100 when he was only 32. Earlier in his career, Steve Boehler cut his teeth with a decade in Brand Management at Procter & Gamble, leading brands like Tide, Pringles, and Jif.
