Agencies Confused By Advertisers

Millions of dollars is paid by advertisers and brands to ad agencies before a dollar is even spent on your radio stations – or any media. A new study released by ID Comms and the 4A’s seems to indicate that, while going through that early dance with clients to get their business, advertising agencies are unclear on what the objectives and goals of those advertisers are. And they blame the advertisers.

Perhaps radio can use this study to emphasize the relationships local, experienced, seasoned account executives have with their clients. And, that those AE’s do understand the goals of those advertisers and brands because they study them year after year.

Respondents to the new study, just released yesterday, represent agencies with combined media billings of more than $55 billion. ID Comms CEO for North America Tom Denford said, “Pitches are a big drain on the resources of a media agency, which is often managing multiple reviews simultaneously. While agencies have gotten better in recent years at prioritizing the pitches they compete for and being more focused with their resources, more discipline on the advertiser side would enable agencies to be more strategic and do better work. A clearer pitch process enables all participating agencies to present their best talent, resources and ideas to the advertiser. This in turn creates more business value for the advertiser.”

Note Denford said “ideas to the advertiser.” Clearly radio’s strong suit.

The study shows advertisers may be failing to get the most value from media pitches as a result of flawed processes and lack of communication. “The findings of this investigation demonstrate that greater clarity throughout the pitch process is not only necessary, but would be mutually beneficial to both agencies and advertisers. Through a more thorough understanding of the importance for decision making attributed to each element of the pitch process, agencies will be able to utilize their resources more effectively and subsequently advertisers will receive a more focused and valuable output from competing agencies.”

The study determined that the most important factor that media agency executives consider in prioritizing pitches and determining how much time and money they invest are the clarity on the advertiser’s pitch process, including the evaluation criteria and the ultimate decision makers.

Ultimately, this requires advertisers to take more time to prepare a better quality pitch brief before they go to market. That means creating detailed evaluation criteria upfront, using simpler pricing exercises that focus on the majority of spend that can be easily audited, as well as being more focused in the questions they ask at the RFP stage. These efforts will encourage agencies to prioritize the advertiser’s pitch and invest more resources to win.

And, here’s some of the inside baseball from the report that we thought would be helpful as you hit the streets to sell. More ammo in your toolkit is always better.

When asked about the detail of the pitch process, agency respondents said that key stages were often hampered by inefficiencies:

– Advertisers should focus their efforts on gathering the information they need to identify those partners with the right capabilities rather than demanding slick videos or delving into legal detail at this early stage.

– Advertisers should focus on the key questions that relate to their particular business challenges. Fewer, but more important questions would stop this stage feeling generic and untailored to the advertiser’s needs.

– Advertisers should focus on delivering greater clarity around chemistry meetings to ensure that agencies know exactly what is expected of them and be mindful of the resource required where they go beyond a basic ‘meet-and-greet’ session.

– Advertisers should offer more realistic timelines and review agency work in the run up to the final presentation to ensure everyone is focused on the right challenges and the agency has enough time to prepare and present their best work.

– Advertisers should ensure that only those agencies with a realistic chance of winning their business have to invest resources in detailed contract negotiations. Advertisers should aim to have the MSA agreed in advance of final presentations, to help more efficient negotiations focused on scope and resources, rather than creating conflict and delay over commercial terms so late in the process.

The study calls on advertisers, not the agencies, to make things more clear. “Moving forward, it is crucial advertisers provide clearer expectations, focused ambition and clarity on decision making to enable agencies to invest resources proportionately at each stage.”