What do marketers look for when choosing an agency, and how important is the chemistry between the two teams? SCOPEN 2023-2024 reviews process and pitch.
Global network agencies: To merge or not to merge?
The last two years has seen a fairly rapid consolidation of network agencies, some of which began during Covid and has continued apace, writes Johanna McDowell. In reviewing the current landscape the big question is, why the ongoing merging?
Considered the world's biggest advertising agency group, WPP focuses on communications, experience, commerce and technology and its consolidation has been the most dramatic we’ve seen.
In November 2018, WPP announced that Wunderman and J.Walter Thompson would unite to form Wunderman Thompson, an end-to-end creative, data and technology agency. Then, in 2023, WPP united Wunderman Thompson and VMLY&R to create what it called a “global powerhouse” in VML.
We’ve seen similar trends with the Omnicom 2023 acquisition of digital commerce high-flyer Flywheel joining the stable that comprises BBDO Worldwide, OMD, PHD, Ketchum, FleishmanHillard, Tribal Worldwide, DDB, Porter Novelli, among others.
Tech businesses the next big thing?
In South Africa and globally, it now appears that the only types of businesses these large networks are buying are those in the technology space. By this, I mean actual tech companies and not tech agencies.
The reasoning behind this is to make the number of cogs in these large businesses work together as a smooth-running machine. Expense here is key – the cost of running so many separate agencies over the years has made clear the need for seamless and less expensive control.
AGENCY SCOPE 2023/24 showed that the percentage of clients not concerned by competitive conflict in their sector within an agency has grown from 21,3% in 2019 to 40% now. This trend has supported the consolidation of network agencies making it easier for consolidated agencies to take on competitive brands.
Impact on independents
What has all this meant to independents? In South Africa, we’ve seen some doing very well over the last few years and others still finding their feet. Some have been break-away start-ups by disaffected people who might have been part of a network and decided to go solo to provide innovative ways of working in the advertising industry.
There are currently some really successful independents globally, but again, they’re being bought. An interesting example, though, is marketing agency Uncommon, which sold 51% to Havas, on condition they could continue to run as they saw best for their business
A number of flourishing independent agencies dot the globe right now, mainly because they’re in touch with their local market which is what clients want; they’re entrepreneurially driven which means clients see – and take note – that the agency owner is in the room during pitches.
Price-wise, it is clear that these firms do not have to repatriate their profits to global HQ, which again makes a difference to how they are viewed by clients.
What about media agencies?
The dominant media agency players in South Africa are all holding company global networks. Some are completely owned by global networks, some are just partially owned.
However, the top ten tend to be the network players, and for good reason: The guarantees that the media owners require from agencies to place advertising, which makes flourishing as an independent agency difficult.
Taking on the big clients becomes a minefield of guarantees and costs, which means independents do the strategy and planning, but tend to buy through the network agencies.
Overall, it seems to me to be natural for advertising people to want to start and run their own business. It’s who they are – but it’s not easy. Good business advice and cash management are vital to flourishing without the constraints of a network holding company that may tie their hands too often for creatives.
Independent agency networks
Blossoming in another corner of the patch is independent agencies that own themselves, as shareholders in their own network. Beyond Connect and Worldwide Partners are examples of these group structures where individually owned specialist agencies come together as a group to offer multi-disciplinary solutions to client’s bespoke challenges. Each agency is run according to its founding culture, unaffected by any group demands and as such individual agencies are owners, in charge of their own destiny.
At a glance, the change in trends across this sector is noticeable. Where WPP once had over 30 buildings in London, it now has three campuses. The global behemoths have had to slim down and become agile, meaning less cost and speedier communications.
Technology has been an enormous help in driving a slimmer and more seamless operation, enabling global entities to work together as if they were in the same office. And when a global agency network is the real network, clients feel the benefits.
In conclusion, there is no good or bad side – there is only what works best for a network’s clients or an independent’s clients. Where the pursuit of excellence includes cost reduction, agility and knowledge of local markets, brands win, clients are happy and small operators thrive as well as their large counterparts.
Digital spend, digital return – and digital snake oil salesmen
Agency Scope digital spend figures throw up some interesting local and global trends, while experts warn against digital snake oil stats.
According to César Vacchiano, president and CEO at Scopen, the number of agency partners clients are currently working with in South Africa has increased yet again.
“In 2021, the number averaged 12.7 agencies working to carry out marketing, communication and advertising projects,” he says. “In 2023, the figure reached 15.2, with the three agents that collaborate most with advertisers being digital platforms at 5.3, BTL agencies at 3.0 and advertising agencies at 1.9.”
As anticipated, Vacchiano highlights digital further growth in the digital paid media arena, from 33.1% to 37.4%. CEO of the Independent Agency Search & Selection Company (IAS) and SCOPEN partner, Johanna McDowell says what is important to note is that while investment in digital paid media has increased, it’s done so at a far slower rate than previous years.
“Total digital spend has, in fact, decreased,” she says, noting the drop from 37.3% in 2021 to 34.9% in 2023. “While the difference isn’t vast, it is important to note where the most budget is being spent and digital paid media is the front runner.”
How South Africa is stacking up
In reviewing AGENCY SCOPE’s findings on markets with the highest digital budgets in 2023, China and Brazil head the pack with 50.1% and 49.9% respectively, while South Africa’s spend of 34.9% falls below the lower order countries Colombia (37.5%) and Portugal (35.7%).“Globally, digital spend has decreased by around 2%, but trends show these figures are more than likely to increase again,” Vacchiano asserts.
McDowell suggests the trend to watch is how digital budgets are being spent. “Social Media continues to claim a large share of digital spend. Where South Africa lags in spend is mainly in the e-commerce sector, where growth has been lower than other countries. I don’t think it’s a concern, it’s just the state of play right now. Expect to see growth in e-commerce in the future.”
Overall, McDowell notes, digital paid media coffers are showing improvement and this will likely continue, but at a slower rate than previous years. “What’s really interesting from our stats is how fragmented everything is becoming,” she says. “The challenge facing marketers is knowing where to spend their money and how best to deploy declining budgets.
“We noted recently the decline in marketing budgets in relation to turnover. Word from the marketers themselves is that they are putting more money into digital as they believe it’s the cheaper route to go. We’re not convinced this is the best thing to be doing. While digi-spend may bring some great analytics, is it working for brand-building?”
Snake oil: Analytics instead of research
What the IAS is suggesting to clients is to rely more heavily on their media agencies, which are able to aggregate all the data and look at the stats, and relate what consumer data shows the best path for the brand to be taking, whether it be traditional or digital.
“Marketers must guard against ‘snake oil salesmen’ who offer the newest gadget or software that promises to be the Next Big Thing in analytics. Thinking more data – or a different way of delivering it – will be what solves their issues may prove very costly.”
Vacchiano and McDowell agree that knowing exactly how effective these spends are and how this budget is being spent is extremely difficult.
“Some new digital audits may be a better way to spend budget right now,” says Vacchiano, “to ensure your money is going to the right places and that the correct measurement tools are being used to optimise your spend”.
Global network agencies: To merge or not to merge?
IAS Agency Credentials Award 2024: Guidance for a shot at the prize
It’s that time of year again, when agencies get an opportunity to shine up their credentials and polish their presentation to marketers waiting to be impressed. But, says Johanna McDowell, Independent Agency Search and Selection Company (IAS) CEO and Scopen partner, make sure there’s more substance than shine...
The DMASA Assegai Awards’ call for entries is a good time to remind agencies that the prestigious annual event introduced the IAS Agency Credentials Award as a new award category in collaboration with the Assegai Integrated Marketing Awards in 2016. It was a first in South Africa and remains the only award in the country that recognises the significance of agency credentials.
The aim of the award is to acknowledge an agency's credentials and its ability to wow marketers. So, what are credentials supposed to do? Essentially, they inform marketers how agencies market themselves, so positioning that comes across as distinctive and case studies that stand out garner attention.
What marketers always want to know is the history and general information about the agency; its client list and standing in the industry, backed up by press coverage and case studies; its points of differentiation; and its proven value for money. Company culture, BBBEE standing and procurement recommendations are also crucial to a client determining the value an agency provides.
Who judges the agency?
In creating this award, we enable agencies to highlight their best suite of services, show up and be seen. The secret sauce, though, is who the judges are. What we don’t want is one agency judging others – aside from any possible bias, there’s no better group to adjudicate than the very group that choose agencies from pitches: Marketers.
To find an award platform that fits the bill, we reviewed all the industry awards and their judges. The best fit for the IAS Credentials Award was the Assegai Awards.
As a judge myself, it was clear that half or more of all judges were marketers - which made sense for two reasons: firstly, marketers reviewing agency credentials would give precise, valuable feedback and acknowledgment about what works for them.
Secondly, agencies would have the opportunity to showcase their credentials to a group of top marketers they may otherwise never have access to.
The latter has been lauded by previous agencies as being an extremely valuable opportunity to put their names and talent on show.
A virtual judging session including the IAS and the marketers who will be adjudicating the IAS Credentials Award will ensure that all are aligned for the selection of the credentials most deserving of the award.
It’s a real-time opportunity to see the points of which all judges are aligned, with a deep-dive discussion to determine a winner and not a mere allocation of points. This format also provides participants to engender maximum impact on today’s marketers.
Entries are open now and will close at the end of August.
As always, we look forward to these esteemed industry awards. You may not walk away with a trophy, but we’re confident your next pitch will certainly be a winner.
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Well-structured agency credentials continue to attract the attention of marketers
ADFORUM GLOBAL SUMMIT 2024 NEW YORK CITY 13-17 MAY - DAY 5
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Another strong line up of global agencies represented at the upcoming AdForum Worldwide Summit
The AdForum Summit, held twice a year in selected cities across the globe, will include Johanna McDowell and the Independent Agency Search & Selection Company (IAS) as part of an exclusive, captive audience of search consultants.
The 2024 AdForum Summit will take place in New York City between 13th and 17thtMay 2024, providing the IAS with the opportunity to assess and forecast global communication industry trends; and, with up-to-date information constantly being exchanged, an exclusive forum to share ideas, challenges and opportunities. The major theme running through the Forum this year will be AI, from a multitude of angles, looking at the value it can bring across areas from creativity to customer relations.
The AdForum summit is an invitation only event that brings top players in the industry together, and offers them the chance to grow their business, network, and experience how they are shaping the future. The IAS is the only South African pitch consulting company that has been participating consistently in the summit over the past 17 years.
More than 20 participating agencies including big names like WPP Group, DDB Worldwide, Uncommon and Stagwell, as well as some new independent players, will be visited during the summit week. These participating agencies will have private meetings with more than 35 global search consultants at their respective offices in order to have 1-on-1 conversations about agency goals, strategies, key corporate messages and to showcase their creative visions and talents.
“The main reason we accept the invitation to attend is to ensure that the IAS continues to be at the forefront of global issues and trends facing the advertising and communication industry and the complex world of agency selection. AdForum offers us the chance to discuss the future of the marketing communications industry. This will be especially important this year with the rapid strategic shifts taking place within agencies as they grapple with the new needs of marketers, new ways an agency can partner with business, as they seek to break through the old, embrace change and bravely tackle the next frontier of challenges,” says Johanna McDowell, Founder and CEO of IAS and partner for SCOPEN Africa.
SCOPEN Africa will also be represented by McDowell at the Summit along with other SCOPEN colleagues from around the world.
For South African agencies, brands and marketers, IAS will be hosting a Masterclasses in June where insights and learnings, along with new case studies, from this summit will be shared. Look out for details on our LinkedIn page here.
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Competitive conflict? No big deal…
In his latest SCOPEN trend highlight, President and CEO of SCOPEN César Vacchiano notes that where once certain clients would prefer not to employ an agency that was working with a competitor, attitudes have changed.
“Our study shows that the percentage of clients not concerned by competitive conflict in their sector within an agency has grown from 21,3% in 2019 to 40% now. That’s a fair leap,” says Vacchiano, “and while precise reasons were not requested from respondents, further analysis indicates that two main factors stand out in marketer’s attitudes to this – trust, and wanting a specific agency, at all costs.”
Says Johanna McDowell, Chief Executive Officer at Independent Agency Selection (IAS) and Managing Partner of SCOPEN Africa, “We saw an uptick in trust between clients and agencies during Covid19, and are pleased to see all parties appear to be maintaining the status quo.
“This, combined with clients knowing that a specific agency will be best for what they want to achieve and choosing them despite any reservations they may have had shows a maturing of the market.”
Like Vacchiano, McDowell says it would be interesting to discuss this with marketers and further digging may bring interesting new moves to light. “Is it only about trust, or the fact that some agencies are positioning themselves in the consultancy space, which is known for being a space that has always had conflicting clients and competitive brands.”
“It is less of an issue than it used to be,” Vacchiano posits, pointing out that “in some cases the degree of specialisation of an agency and its reputation means their value is such that some clients are prepared to take any perceived risk simply because they want that specialty and that service.”
Trust, technology and intellectual property
Here, McDowell notes that it is not in the interest of any agency to share client information or be concerned about what a competitive brand may be doing. “For years, agencies have had frameworks within teams work so as another team on a competitor’s project doesn’t get the down low on who is doing what.
“Technology, too, can ensure that even within the same agency, competitor’s information can be locked down and accessed only by password protection for each project. Agencies have long been using both company values and technology to protect each clients’ intellectual property, again reducing any anxiety in among marketers.”
Clients not entirely comfortable with sharing an agency with competitors are usually in the retail, banking and FMCG sectors, but even these may share an agency depending on what type of work the agency is doing for each. Again, Vacchiano highlights that it is not in any agency’s best interest to transgress the protective framework.
McDowell adds, “Overall, a key factor is, quite simply, a marketer wants the agency they want. They want the creativity, the culture, the level of innovation and they’re prepared to work with the agency known for meeting the highest standards in each area.
“Clients want the best and in a sea of sameness, they’re showing more and more that they’re willing to roll the dice on an agency known for being the best. So far, trust is winning.”
Brand vs performance cultures
As marketing agencies continue to seek ways to deliver the goods, we are seeing ‘old agency’ bumping up against ‘slick martech’, writes Johanna McDowell, CEO of the Independent Agency Search & Selection Company (IAS) and SCOPEN partner. On top of these draining legacy issues, do we really need another new dashboard?
To paraphrase Nick Law, creative chairperson at Accenture Song, “Branding is a mature culture of storytelling and craft, suspicious of the scientific world of algorithms, while the performance world is young and bright, with a deep understanding of modern media and technology, sneering at the hand-wavy romantics”.
At this point, nobody seems truly able to fill the gap left by operating brand and performance separately. On the one hand, traditional agency creativity is often off the mark where targeted content is required; on the other, performance teams seem to be continually throwing more martech at a communications problem.
Turning data into action
So, how do we deal with what has become known as the “messy middle”? Understanding the need for data and analytics, the IAS believes that turning only valuable data into actionable marketing campaigns is necessary. This will require a balance between brand and performance at an organisational level.
It’s not more software that’s required, but more soft skills – now effectively power skills – when applied to creating a marketing ecosystem that understands the job to be done. Organisations must comprise people who understand both communications and technology, and what each should be doing to draw the two sides together.
The primary focus should always be, “how does this help the marketer and the brand?” We see data management as a function that must shift from being a separate department within the marketing ecosystem to being the responsibility of business leaders.
Value in simplification
AGENCY SCOPE 2023 noted that marketers are recognising brand building and the creativity behind it as being crucial, even as many keep chasing the analytics. How do we make sure the missing middle doesn’t handicap the process?
Simplifying processes could result in reducing the “messy middle” and its part in the agency ecosystem’s often sluggish response to opportunities to turn data into sales. The AAR, IAS’ UK partner, suggests an incremental building of the industry by moving more creativity and budget to data-lead targeting, driven by clients.
Simplification in this context does not necessarily mean reducing or even streamlining the number of agencies within a marketer’s eco system, but rather the understanding that clients need these skills that are becoming more specialised as technology advances at speed.
For example, the key area of consumer targeting has grown to incorporate essential data that requires specialists to extrapolate the precise analytics that will positively impact marketers’ results and the long-term success of the brand.
Staying in their lane
With each additional specialisation, marketers are left to determine which of their current agencies have the capabilities they require and whether yet another agency may be needed. Here, the IAS suggests choosing one organisation that has the skills and experience to find ways for existing agencies to collaborate better or to introduce a single, multi-channel organisation that frees up the client to focus on core daily issues.
This enables each agency to stay in their lane, recognising each others strengths, and work to support the ambitions and objectives of the brand.
It’s time for the “them and us” of brand versus performance to combine their vast swathes of data and talent to create a “magic middle”, simply and swiftly, for the sake of the brand and its customers.
Fortune favours the brave – someone has to stand up soon and say, “Enough…”
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Nedbank, the ‘ideal’ client, and also the most attractive brand for agencies
As a continuation of the study on de BEST AGENCIES TO WORK FOR, according to professionals working in agencies (both creative and media), SCOPEN analyzes in its BEST MARKETER TO WORK WITH Study, the most attractive brands in South Africa for these same professionals, and the qualities that an ‘ideal’ client should have.
The field work was carried out between the months of July and September 2023 and a total of 200 professionals have been interviewed (155 from creative agencies and 45 from media agencies).
The three main characteristics that the South African interviewees mention when they talk about those that a brand must have to be considered an ‘ideal’ client are, firstly, Partnership / Build Long-Term relationships (for 56.5%), secondly, its Ability to Take Risks and look for Big Creative Ideas (38.0%) and in third place, the Professionalism and Seniority of the Brand's team (20%). Other characteristics are mentioned below, such as Adequate compensation, an in-depth Knowledge of the business, Clarity in briefs and objectives, the client’s ability to Share Feedback and information and their Respect for timings.
Cesar Vacchiano, President of SCOPEN International asserts, “It is very relevant that when agency professionals choose those client companies they want to work with, they prioritize long term partnerships that produce confidence and trust when risk taking, over adequate compensations (that probably exist in those long term relationships). Analyzing longer-term client-agency relationships across different markets we always notice that these partnerships produce admired professionals in both parties and better work (creative and effectiveness awards).”
The South African clients that, according to the agencies, come closest to these definitions of ‘ideal’ are: Nedbank, ABInBev and Chicken Licken.
On the other hand, regardless of how the brands score on the different attributes that evaluate their relationship with their agencies, the professionals are also asked about the brands with which they would like to work (more aspirational, due to the visibility and impact of their communication). In this ranking, the first three positions are occupied by: Nedbank, Nando's and Absa.
Joe Public and Mindshare stand as the most attractive creative and media agencies to work for
SCOPEN presents the results of the second edition of the BEST AGENCY TO WORK FOR Study on creative and media agencies in South Africa, which identifies the most attractive agencies to work for, for the professionals who currently work in them. The field work was carried out between the months of July and September 2023.
In this edition, a total of 200 professionals have been interviewed (155 from creative agencies and 45 from media). The sample is higher among professionals from Johannesburg (73.5%), with greater female representation (58.5%) - higher in media agencies - and the average age is 44 years. On average, they have been at their agencies between 7 and 8 years and more than 7 in their current position. Management positions have the highest representation in the sample (a third of them are CEO/Partner/MD).
The key factors that most influence an agency change are Professional Projection/Learning (51.1% - almost 26 percentage points more than in the previous edition) and Salary (41.5% - 10 pp more vs. 2022). Aspects such as Company/Organizational Culture (17%), Professional Team/People (11.9%), Client List (9.6%), Creative Quality (8.9%), Hours -Home Office, Flexibility- or International Network (both with 8.1%) are mentioned less.
Among the six tangible aspects suggested, the three most important that influence preference of one agency over another are Location & Access (27.3%), Work-life balance -working remotely and with flexibility- (23%) and Benefits -other types of remuneration- (21.8%). Among the intangible aspects, Respect -how employees think they are perceived by their leaders- (27.5%), Credibility -how employees perceive their boss/leaders and the company- (23.5%) and Pride -Value of work, image of the company in the industry- (17.5%) are the three that stand out.
In South Africa, the satisfaction of professionals working in their current agencies is high, with an average recommendation level of 8.8 out of 10, and an NPS of +57.3. Only 13.7 of the professionals interviewed declare their intention to change agencies (certainly or probably). If they did, they would mainly change to a client company.
Cesar Vacchiano, CEO of SCOPEN Global, says… “Across all markets we see that due to the uncertain times we live in, most agency professionals (43% in South Africa), are not thinking of changing agencies. Among those thinking of changing, the vast majority want to move to a client company. It is a big problem if agencies are not attractive for professionals in our industry, as without outstanding talent, agencies will lose relevance for marketers.”.
Joe Public achieves the top position among the most attractive creative agencies
The 10 creative agencies leading the Best Agency to Work for 2024 for South African professionals are:
#1 Joe Public #6 GREY
#2 Ogilvy #7 M&CSAATCHI ABEL
#3 TBWA\ #8 Promise
#4 Accenture Song #9 Grid
#5 VMLY&R #10 FCBAFRICA
Joe Public maintains the position it achieved in the last edition, as the most attractive agency to work for among creative agency professionals. This is mainly, because of its first position (much higher than the rest of the agencies) in the Top 10 ranking of independent agencies. Ogilvy and TBWA\ reach second and third position (being first and second in the Top 10 of Group Agencies). Among the Top five in the global network agency ranking, we find Accenture Song, which achieves fourth position, not having appeared in the Top 10 previous edition, and VMLY&R, which rises two positions (it was 7th in 2022). We also found two significant rises from Grid and FCBAFRICA, both of which appeared in position 17 in the previous edition, and now reach positions 9 and 10 respectively.
Mindshare achieves first place among the most attractive media agencies
Mindshare reaches first place as the most attractive media agency to work for (it was in fourth place in 2022), followed by The MediaShop (first in the previous edition) and phd (which rises one place). In the Top 10 we find four significant increases: CARAT (which goes from tenth to fourth place), OMD (from 11 to 6), and Publicis Media and UM (which go from 16 to 7 and 10 respectively).
The 10 media agencies in the #BATWF 2024 are:
#1 MINDSHARE #6 OMD
#2 The MediaShop #7 PUBLICIS MEDIA
#3 PHD #8 Metamedia
#4 CARAT #9 Starcom
#5 Wavemaker #10 UM
AGENCY SCOPE: Creative strategy boosts agency contribution to clients’ growth
By far the hardest question to answer in the AGENCY SCOPE study is when we ask marketers, “How much has your agency contributed to the growth of your business?”, says Johanna McDowell, Independent Agency Search and Selection Company (IAS) and SCOPEN partner.
It is, she notes, one of the last questions in the study and the one that has marketers scratching their heads in view of the difficulty of considering the sheer number of factors that contribute to business growth.
“Agency contribution to growth is clearly not just about the advertising or the return on investment, which would be too simplistic,” says McDowell. “Larger marketers, in particular, understand the number of factors that may account for business growth, including product, price, distribution, among others.”
In some instances, marketers don’t or can’t answer, but the many who do respond have enabled AGENCY SCOPE to determine that creative agencies contribute just slightly under 30% to their client’s business growth, while media agencies are contributing just under 34%, she says.
“The answer to this question is also a factor in determining the net promoter score (NPS) the agency achieves.”
South Africa versus rest of the world
According to SCOPEN co-founder and global CEO César Vacchiano, comparing South African contributing agencies to their global counterparts is important in setting benchmarks and the trends that drive them.
Says Vacchiano, “The global average for creative agencies in the SCOPEN markets is 32%, while the media agency average is 33%. Of the two, media agencies would be easier to track, owing to the fact that they have more data that can prove business growth and they share their various analyses with their clients.”
The latest AGENCY SCOPE South Africa stats show overall improvement. In 2021, the average contribution made by creative agencies to clients’ business growth was 26% and is up by 4% in 2023. Media agencies have maintained their 34% contribution from 2021 to 2023.
“Considering that another statistic – percentage of spend on advertising – when we look at the investment ratio of the amount of money invested in advertising communication by marketers in relation to their company turnover figures, marketing, communications, advertising and media budgets were around 4.2% of turnover,” Vacchiano asserts,
“In 2023, it stands at 3.5%, showing the investment in the four sectors above has dropped considerably, highlighting the fact that budgets have had to work a lot harder.”
Marketers know that to maintain a contribution to business growth according to what the client sees is good; but to be able to have increased it like creative agencies have done is excellent.
Creativity delves into realm of business growth
Vacchiano and McDowell concur that this data underscores marketers’ suggestions that the importance of creative agencies cutting through the clutter and producing workable strategies is vital; and it shows in the SCOPEN study responses. Clearly, this is being recognised across the board, particularly in relation to business growth.
“To impact business growth at the same level with less money across two years shows creativity is key,” McDowell asserts, noting that it is not just creativity in terms of ideas, but also media strategising and creative implementation of financial spend across the various platforms and in a variety of ways to reach target audiences.
“In the final analysis,” says Vacchiano, “creativity in every sense of the word has taken a vital leap into the way in which marketers and agencies conduct business with a steady eye on growth.”
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#MasterclassNotes: Why chemistry reigns supreme
Seventeen years and 500 pitches later (excluding those I was in and ran during my time in agencies and as a marketer), I’m more than ever convinced that, without chemistry, the client-agency relationship is doomed.
Chemistry isn’t just about liking each other or socialising. It’s so much more.
A commitment to a relationship involves discussion, shared values, appreciation of cultures and so on. A client-agency relationship can’t be governed by contract and resource plan alone. It’s about standing together and facing the difficulties that inevitably will occur, such as a sudden budget cut.
Where & how the “magic of chemistry” starts?
Chemistry starts during the early stages of a pitch process, whether formal or informal — or it should. How an agency could possibly go into a final pitch presentation in front of a marketer without having had at least one exclusive interaction with that potential client is beyond me. Plus, in my view, agencies must push for that managed interaction because chemistry is a two-way street and it’s an opportunity for each party to evaluate the other, just as they do later during any professional relationship management exercise.
Chemistry sessions over Teams don’t work, although when we had to do those a few years ago during the beginning of the covid pandemic, it was better than nothing. In person, in real life sessions in the agency offices is where chemistry may be assessed. An agency is at its most authentic in its own environment, and the job of the client is to evaluate how that agency will fit into the client’s world.
I estimate that, globally (and locally), only 20% of all pitches are managed by intermediary companies, so it’s still low but even non-intermediated pitches need a chemistry stage and assessment. This gives both parties the chance to decide on a number of things:
Can we (the client) work with this agency?
Can we (the agency) work with this client team?
Is the agency team ‘together’ and do they have each other’s backs (teamwork)?
Is the client used to dominating its agency partners, or is it prepared to work in partnership?
Does the agency display curiosity, or does it try and ‘know everything’ too soon?
Do the client team members display solid connections and a chemistry of their own?
When I (client) look at my meetings coming up in the week ahead, am I excited at the thought of meeting my agency team?
Did the agency team only talk to the most important member of the client team or did they make sure that everyone was included?
And the list goes on.
These factors are vital to the well-being of any relationship and may become crucial when the ‘chips are down’.
Chemistry isn’t about long lunches or over-socialising. It’s not about gifts or weekends away but about the ability to be able to pick up the phone or send an urgent WhatsApp and know that it will be readily received, trusted and acted upon by either party in a time of crisis.
Chemistry is so important that it can be used as an elimination factor during a formal pitch process. Even the highly structured government processes (and some private sector processes) can accommodate a chemistry session as procurement should, and surely would want to, do a site inspection at an agency before appointing it or asking it to pitch. Building in some time for a chemistry assessment would add enormous value to the much-reviled PFMA pitch process.
Building chemistry
Chemistry may be built or it may happen spontaneously. However, though there might be an instant attraction between both parties the first time they meet, this could easily dissolve during the later stages of a pitch — a case of instant attraction becoming fatal attraction!
I believe that, if the chemistry can be sustained and the agency wins the pitch, then the early start to the relationship will be far easier and will overcome any initial hurdles created through (what can be) a difficult contracting process or the first 90 days.
Great chemistry allows the working relationship to become optimal. The briefs are better; the work or outputs are better; there is more respect. Everyone feels valued and will be ever more proactive in their ideas and inputs into that relationship. Even if there are dips in output excellence from time to time, the chemistry between the parties will allow the relationship to continue unhindered and to enjoy robust discussion.
How to build chemistry is something that can be learnt and all of the great pitch consultants who I know globally include these learnings in their processes, as do I. It always surprises me when we run a masterclass on “the magic of chemistry” at how well-received and popular it is.
Contract renewal time
We spend a lot of time working and, in my many years of experience in advertising and marketing, agency and marketing professionals often work longer than most (12-hour days are nothing unusual). Imagine how hard it is to retain enthusiasm and chemistry if the relationship has broken down and one is starting to feel like a slave.
If that breakdown continues, when it’s time for contract renewal, then there’s little chance that the agency will be renewed automatically and, indeed, it might not even want to be renewed, let alone repitch.
There’s value in the relationship management exercises that all intermediaries conduct for clients and agencies but, without chemistry, no matter how often or thorough those exercises are, the client-agency relationship will not survive.
Agency Scope: Top creative and media agencies according to marketers
Creative agencies Ogilvy, Joe Public and TBWA\, and media agencies Carat, OMD and TheMediaShop are all standouts in the Agency Scope as rated by marketers.
The biennial research looked at how marketers view both creative and media agencies. "Each was given a category outline and asked to submit three agencies," explains Johanna McDowell, Scopen partner and CEO of the Independent Agency Search & Selection Company (IAS).
"Here, we show the outline and the results of each.”
Spontaneous awareness category
Under the title “spontaneous awareness”, respondents named three agencies they are aware of.
Creative agencies
1. Ogilvy
2. Joe Public
3. TBWA\
Media agencies
1. Carat
2. The MediaShop
3. Mindshare
Creativity category
Creative agencies
1. Joe Public/Ogilvy
2. none
3. TBWA\
Attractive agencies category
Attractive agencies provided a list of the agencies marketers would shortlist in a pitch.
Creative agencies
1. Joe Public
2. Ogilvy
3. TBWA\
Media Agencies
1. Juno Media
2. M&C Saatchi Connect
3. The MediaShop
Ideal Agencies category
“The ideal agencies category is an analysis of how the overall market, along with the particular clients of an agency, rate that agency,” explains Cesar Vacchiano, president and CEO of Scopen International.
Creative Agencies
1. Ogilvy
2. Joe Public
3. Accenture Song
Media Agencies
1. Carat
2. OMD
3. The MediaShop
Market perception category
In the category “market perception”, a combination of spontaneous awareness, creativity, attractiveness and ideal agencies gave rise to the following responses.
Creative Agencies
1. Ogilvy
2. Joe Public
3. TBWA\
Media Agencies
1. Carat
2. Mindshare
3. The MediaShop
“Market perception is probably the most important rating,” says McDowell. “The agency that wins in market perception is the closest to a perfect agency, and noted as such by the industry.”
The final two categories in the research looked at Client Satisfaction and Competitor’s Opinion, both important in a marketers' choice, Vacchiano asserts.
“We know overall satisfaction is vital to clients, but having competitors list their competition as notable agencies is invaluable.”
Client satisfaction category
Client satisfaction saw the following agencies take top spots.
Creative Agencies
1. Promise
2. Brave Group
3. Black Powder
Media Agencies
1. OMD
2. UM
3. Initiative
Competitors’ opinion category
Creative Agencies
1. Ogilvy
2. Accenture Song
3. Network BBDO
Media Agencies
1. Meta Media
2. Initiative
3. Mindshare
Scopen 2023 trend: In-house agency heading for the out house?
The trend of in-house marketing operations is starting to wan, as marketers start to respond to the post-Covid world.
Agecny Scope 2023 has found that the trend of in-house marketing operations is starting to wan, as marketers start to respond to the post-Covid world
Aided and abetted by Covid19 restrictions, companies of all sizes set up in-house marketing operations at a time when work from home (WFH) and creating remote teams provided a solution to business continuity.
“It was a trend that had started before Covid and then accelerated during the pandemic,” says Johanna McDowell, Scopen partner and CEO of the Independent Agency Search & Selection Company (IAS).
“Evan if people were not physically in the client’s building, they were operating as part of its team. It was a compelling trend that happened rapidly and globally,” she adds.
However, the results of Agency Scope 2023 show this growth has waned and marketers are stepping back from in-housing.
“Among the reasons for the growth in the first place was clients wanting to be closer to their data,” McDowell asserts.
“They needed to access their data quickly and respond accordingly. Many felt that their agencies were not close enough to them to be able to action data results with enough speed to take advantage of trends.”
Creatives are generally at their best and happiest when working on a variety of brands with different target audiences to stretch themselves creatively
Why the decline?
The Scopen research shows while the need for speed that existed at the time is still there, and clients want to follow data with action and agility, clients have noted the expense of setting up an in-house agency.
And – importantly - that creatives are generally at their best and happiest when working on a variety of brands with different target audiences to stretch themselves creatively.
“Marketers acknowledge that in-house work usually comprises working on one brand, or even a few - but still all within the client’s stable,” says McDowell.
In-house managed by an outside agency
President and CEO of Scopen, César Vacchiano, adds, “There will always be a need for in-housing, but how those structures will work in the future will be interesting to see.”
Currently, it may be a department set up by the client staffed directly by the client.
“Our research is showing a preference for an in-house agency that is managed and staffed by an outside agency that controls the running of the entity and employment of its staff,” he explains.
McDowell suggests the latter option gives both the client and the agency flexibility, meaning that if a creative gets bored working on the same brand, fresh eyes and ideas can be brought in to switch places.
“All responsibility from an employment point of view is carried by the outside agency,” she says.
“Obviously the client remunerates the agency for the overseeing of staff, and there are specialist agencies who excel at building in-house departments or agencies.
“So, while we don’t see these going away, our study shows little to no growth of this nature at this point.”
The effect of remote work on in-housing?
Current indications are that a lot more marketing agency personnel are in their offices than just after Covid, and there’s a gradual return to more days in the office McDowell asserts.
“This may also be a contributing factor to the in-housing decline, along with the space factor in a client’s offices. Many corporates downsized their offices because of the pandemic and with people heading back into the office now, lack of space may make in-housing a tight squeeze.”
She further adds that several marketers have seen their staff not working as cohesively as they used to, with productivity levels down and quality of thinking stilted.
“The realisation they’ve come to is that so many once-fluid creative teams have spent so much time apart that the innovative thinking that once bonded them has dissipated.”
The strategy now, says Vacchiano, would be to see if it is valuable to leave some agency personnel in the client’s office and, if so, who would work best there.
“Responses post-Covid are likely to start driving marketers towards a Plan B in future, coupled with massive learnings from the recent past, he adds.