Winning at agency transitions - R3

WINNING at

Media Agency

Transitions A N R3 GUIDE TO MANAGING AN EFFECTIVE

AND EFFICIENT AGENCY TRANSITION

IMPROVING THE EFFECTIVENESS & EFFICIENCY OF MARKETERS & THEIR AGENCIES

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INTRODUCTION

o client-media agency relationship is the same; likewise, no two client-media agency transitions are the same. A successful transition has many components, including a clear framework and a transparent atmosphere to promote collaboration, but how can you fully integrate the new agency team across your organization?

R3’s rich experience in running pitches across several different regions and markets has given us deep insights into the agency transition process, and allowed us to develop the following Ten Point Transition Plan and Checklist to manage an effective and efficient media agency transition.

IMPROVING THE EFFECTIVENESS & EFFICIENCY OF MARKETERS & THEIR AGENCIES

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IT’S TIME TO TRANSITION YOUR AGENCY Finally… after several months of RFI’s, RFP’s, chemistry meetings and rounds of presentations, the pitch is over, decisions have been made, champagne corks have been popped, trade press headlines secured, KPIs agreed and contracts drawn up.

But now it’s back to the real world of embedding the new agency team across your organisation, across the globe, across your Brand teams, across your Procurement, IT, HR, Finance and Legal teams and across your Creative Agencies, Digital teams and other partners.

And oh yes… the new campaign is due to break in just six weeks.

DIGITAL AGENCIES CREATIVE AGENCIES

BRANDS

MEDIA AGENCY

IT/ANALYTICS

FINANCE

PROCUREMENT

DON’T LEAVE THE TRANSITION UP TO THE NEW AGENCY Media agencies win and lose business all the time and have huge experience in seamlessly managing accounts in and out of the door. However, for the marketer appointing a new media agency – or working with a new team with a winning incumbent – transitioning to a new partner, new teams, new thinking and new processes doesn’t happen very often and needs top to bottom internal buy-in and positive collaboration.

For the next few months, you are likely to be the main gatekeeper between the new agency and your organization - where expectations of award winning strategies and mouth-watering media pricing are running high. So it’s critical to be proactive and manage the transition hands on, and not leave it to the agency to find their way around.

No two client-media agency transitions will be the same. The demands facing a global automotive client needing an agency staff of 200+ are going to be very different from a local marketer switching local agencies – but only in terms of scale. Smooth transitioning needs a clear framework, agreed upon timeline, accountability, disciplined communication and an open, transparent collaborative atmosphere.

Problem Deadline missed Info missed

STOP

Leadership Team urgent action

WARNING

Potential Issue Staffing shortfall Booking deadline Leadership Team alert

Transition progressing

GO Leadership Team monitor

Based on our pitch experience, we have put together the R3 10 point Transition Plan and Checklist which we think will help you manage a smooth effective and efficient media agency transition – whatever the size of the business.

IMPROVING THE EFFECTIVENESS & EFFICIENCY OF MARKETERS & THEIR AGENCIES

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10 POINT TRANSITION PLAN

Transition Starts Before the Pitch is Called 1 You are probably planning a pitch to obtain a new approach, so start with an internal audit of where you are now so the organization can accurately benchmark where you want to be after the pitch.

CASE STUDY We have worked on numerous pitches with big knowledge gaps in current activity: incomplete media spend levels, limited understanding of current media pricing, no visibility on long term media vendor contracts and lack of transparency on agency fees and volume rebates (AVB’s) - making it hard to accurately assess the outcome of a pitch.

So start with an internal audit. Work with your incumbent media agency and audit team to get an accurate, up-to-date breakdown of where your budget is being spent. This would include: spend by media, media mixes, media weights, GRP levels, insertion levels, impressions, conversion rates, quality metrics and booking lead times.

Pitching agencies will need clear guidance (maybe not actual numbers) of your media spend levels, legacy pricing and any long-term media vendor commitments – so use this pre-pitch period to get a good handle on your media data.

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Use an Exit Audit to Tie Up all Loose Ends 2 Nobody likes losing and inevitably your current media team’s performance will drop off. Wherever possible, lock key media bookings in before calling the pitch to minimize potential disruption.

Once the decision has been made to move agencies, we always recommend an exit audit to ensure all media buys and contracts have been fulfilled, all billing is completed with no loose ends, all AVB’s returned, final campaigns delivered and post buys signed off.

We recommend using an external consultant like R3 to run this audit – they can take a fair and objective view, leaving the marketing team free to focus on the pitch briefing.

Do be open and transparent with your incumbent throughout the pitch process. They have put their heart and soul into your business and deserve recognition and appreciation. After all, you may reappoint them.

Allow Enough Time 3 In our experience, media agencies can move a lot faster than most clients. In pitches, clients always ask agencies for their transition timing but rarely look across their own organisation.

Start with your first major on-air date, e.g., ‘Autumn Campaign,’ and work backwards.

Build in: booking and negotiation lead times, briefing and strategy preparation, agency orientation, agency handover, pitch process – which in itself can take anything from one to three months or longer. Then call the pitch.

There is no magical ideal timing, but a typical transition process – from agency appointment to fully operational planning and buying teams -- will take the agency at least 8 -12 weeks.

4 WEEKS Minimum timeframe 1 - 2 markets 2 - 3 medium brands

8 WEEKS Workable timeframe 10+ markets Staff increase

12 WEEKS Ideal timeframe Global markets New staff structure

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Appoint Transition Leadership Teams 4 For appointments across multiple markets and time zones, it’s critical to appoint a client-side transition leadership team to co-manage the transition alongside the agency. The smoothest transitions happen when a multi-disciplined team can open the right doors for the agency across the organization.

Strong leadership and direction from the center, combined with fully accountable local cluster leadership, will speed up the transition and ensure the new agency is embedded evenly across the organisation.

Leadership Team Key Roles: Agreeing on transition time lines and key milestones Point of contact with senior media agency management Ensuring key data, research, legacy data are shared Support local leadership Issue resolution

Transition Leadership Team Multi-Disciplined Brands, IT, HR, Legal, Procurement

Key Markets Transition Leader

Regional Clusters Transition Leader

Regional Clusters Transition Leader

Streamline Your Workflow 5 and Internal Process One of the most frequently cited reasons for clients changing media agencies is to harness the new agency’s expertise in challenging an organization's internal status quo – too little spend on digital, brands reluctant to take risks, too comfortable with predictable repetitive media plans.

Use the transition period for a root and branch review of your current internal processes – what really adds value vs. what drains resources on ‘nice to have’s.’

CASE STUDY In a recent media review, we tracked the amount of unnecessary agency rework, constantly revising media spot plans– sometime up to 5 – 10 times prior to final approval, often just a few days before on-air date. We were able to track the lost monetary value this caused and identify the problem – the spot plan had to make a round robin through the organization before it was signed off.

Not easy – but try to identify the potential roadblocks facing the incumbent agency. A new contract with a strong pay for performance element where the media agency shares the risk should help dismantle many barriers and allow the agency to focus on adding value and doing what they do best.

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Share Your Data 6 One constant source of agency frustration is the lack of access to client side data: sales, consumer research, tracking studies and business objectives.

Use the transition period to audit just what data your brand and analytics teams are sitting on and make sure this is shared with your new agency partners. Local brand teams can often squirrel away key information and only make it available on a ‘need to know basis.’

But then hold the agency to account for really embedding this into their media planning, recommendations and outcomes.

The key reason agencies cite for not leveraging their proprietary planning tools – shown off so enthusiastically at the pitch – is always ‘lack of client-side data.’

Increasingly, we work with our clients on pay for performance incentives which combine media cost and quality outcomes with contribution to business results. This only works when there is collaborative sharing of data.

Agency Orientation 7 Spend as much time and resources on bringing the agency up to speed as you can. The agency will probably have met only a handful of key stakeholders just a few times in the pitch with no real time to understand your organization.

Increasingly, pitches we manage involve a lengthy chemistry session – no PowerPoint slides – just an informal dialogue between client and key agency teams.

This helps break the ice and is a good template for ongoing transition dialogue.

The new agency teams will need a detailed ‘who is who’ in the organization-including roles, responsibilities and contact details.

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Incumbent Handover/Mandate 8 This is never going to be an easy process, but if current media buying is well-documented and audited (as we recommend in step number one), then it should be relatively straightforward.

Again, we recommend using an external consultant to chair these handover meetings to keep them objective and productive.

Media vendors must be informed of the change of media agency of record. A simple mandate instruction is needed to allow the new agency to initiate discussions with media vendors and other client partners on your behalf.

Implement Performance Tracking Now 9 Lots of promises and commitments have been made and written into the new contract.

Use the transition period to get an accountability process up and running and ironed out now.

Don’t leave this until the first post-buy hits the desk and everyone starts to debate the definition of ‘regional cost savings’. This can put marketers on the back foot if performance doesn’t match pitch commitments.

PITCH COMMITMENT TRACKING SUMMARY - TV Metrics

Brand A

Brand B

Brand C

Brand D

Market Overall

On Track CPRP % PT % Top Prg % PIB Commitments On Track

Commitments Missed

Watch-out, take action now

IMPROVING THE EFFECTIVENESS & EFFICIENCY OF MARKETERS & THEIR AGENCIES

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Project Management Plan 10 Finally, pull everything and everyone together in a detailed project plan showing key steps, milestones and responsibilities across each of the key disciplines. A simple traffic light system distributed on a weekly basis to key stakeholders is still the most effective way to communicate progress and ensure the transition is on track and any issues highlighted early on. Based on R3’s experience of pitch management and agency transitioning, we have put together the following example Transition Project Plan covering the key steps.

ACTION Pre-pitch Audit

PURPOSE

CLIENT

AGENCY

INCUMBENT

CONSULTANT

Summary of current media performance. Set benchmarks vs pitch outcome.

Exit Audit

Ensure all buying commitments have been, AVB’s returned, and invoicing finalised.

Nominate Pitch and Transition

Identify key internal

Team - key stakeholders

stakeholders, get top to bottom organisational buy in.

Pitch Process / Outcome Initial meeting with new agency

Extended chemistry session,

transition team.

align transition timing and indepth transition plan.

Issue key contact details to new

Introduce agency to key cross

agency.

discipline stakeholders. including Creative Agency and other partners.

Issue media vendor mandat

Allow new agency to formally

letter to new agency.

contact media vendors.

Initial handover meeting with

Transfer of key data that will

incumbent agency.

impact on future client agency relationship e.g. long-term vendor contracts.

Agency orientation

In-depth orientation across key functions: Brands, IT, Analytics

Weekly status

Weekly update of transition project plan

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ABOUT US

www.r3ww.com

OUR REASON FOR BEING

In a word, we are about performance. R3 (www.rthree.com) was set up in 2002 in response to an increasing need from marketers to enhance their return on marketing investment, and improve efficiency and effectiveness.

We act as coaches to marketers wanting to play better.

OUR BACKGROUND We’ve worked with more than one hundred companies on global, regional and local assignments to drive efficiency and effectiveness.

We have talent based in the US, Asia Pacific, Europe and LATAM and partners in Africa.

Through global work for Samsung, Coca-Cola, JNJ, Visa, Unilever and others, we have developed robust benchmarks and process targets for the US, Europe and Latin America.

What we do Our core service offerings include proprietary processes and tools in the areas of marketing investment and agency relations.

How we do it We invest in the best talent, bringing in senior leaders from marketing, agency and analytic backgrounds.

Since 2002, we’ve interviewed more than 2,000 marketers about their agency relations.

Since 2006, we’ve spoken to more than 50,000 consumers in China’s top twenty cities and continue to do so every three months.

Each month, we exclusively track over 500 agency new business wins. We authored the book “China CMO” about marketers in the world’s most dynamic country. We maintain an ongoing database of media costs for key markets. We have co-developed software to measure agency and media performance.

RETURN ON MEDIA RETURN ON AGENCIES With our deep insight and ongoing research into agencies, we provide independent consulting on Agency Search, Compensation and Evaluation – covering Creative, Media, Digital, PR, Social, CRM and Event agencies.

CLIENTS

IMPROVING THE EFFECTIVENESS & EFFICIENCY OF MARKETERS & THEIR AGENCIES

With one of the largest databases of media costs and rebates, we provide independent media auditing, financial auditing and process improvement.

RETURN ON INVESTMENT Through proprietary research, including EnSpire, into benchmarking of marketing processes and structures, we provide independent consulting on reducing the risks of marketing investment.

We are retained by eight of the top twenty marketers across 60+ markets on six continents.

greg@rthree.com shufen@rthree.com www.rthree.com