R3’s Seema Punwani reasons why the parameters to evaluate an ad agency’s performance need a rethink
It used to be simpler for marketers to measure their love for their agencies in the past. Evaluation parameters were straight forward with creativity (and recognition through awards) being at the forefront. In the last few years, other criteria like return on marketing investment, use of digital and multi-channel marketing have been added to the list. Today, however, the parameters have evolved further and are becoming even more complex.
The reason is two-fold:
The rapidly changing and ever-fickle consumer
According to Ad Age data on total worldwide advertising spending in 2015, the world’s largest advertisers are P&G, Unilever and L’Oreal, while Fortune’s most admired companies for 2017 are Apple, Amazon, Starbucks. This highlights the big divide between media spends and consumer preferences, and with the rise of eCommerce, consumers’ access to global brands has increased exponentially. Their content consumption habits are undergoing tremendous changes, with memes getting more views than magazines and user-generated content being sought after over advertising.
Technology as a disruptor
Whether it’s travel or finance, there is no category that has remained untouched by disruption. This year, the Chief Marketing Officer (CMO) will spend more on IT than the Chief Information Office (CIO). How then can agencies be immune to these dramatic shifts?
Marketers are now re-examining lens through which they view agencies.
Top five evaluation parameters for marketers today:
1) Together we stand
With the agency world becoming hyper-fragmented and over-specialised, a marketing director today is working with an average of 8.7 agencies per R3’s global proprietary study Agencyscope. What clients need is for everyone to not only play well with each other, but play to win. Agencies that are collaborative and can work with multiple partners will stand to gain. Instead of turf wars and land grabs, it’s imperative for agencies to use best-in-class skills and combine forces.
2) Driving business results
Expectations from marketing teams within the organisations have changed. Raja Rajamannar, Mastercard’s Global CMO said in a recent interview in Marketing Interactive, “It is critical marketing people have a solid business perspective. If you are not moving the needle for the business, you will lose the job.” So naturally marketers’ requirements from their agencies have evolved to include return on investments and business growth. In the FMCG category, agencies need to be at least partially accountable for sales and for B2B for lead generation.
3) Leveraging data
Agencies need to learn to befriend data instead of being wary of it. This task should not be left to analysts and data scientists, but all players on the agency team – including creatives- need to understand and use data to create their campaigns.
Furthermore, a test and learn mindset needs to be developed for continuous optimization. In a recent book written by R3, Asia CMO: Driving Brand Growth, Gunjan Soni CMO & Head – International Brands Business, Myntra said that marketers can optimise up to 30% savings on budgets by using data well as well as leverage transactional data to drive loyalty.
4) Speed to market
Consumers today are impulsive and in pursuit of immediate gratification. It’s the IWWIWWIWI generation (I want what I want when I want it). Even high-end fashion houses like Burberry are adopting the See-Now-Buy-Now approach, where collections are available for sale immediately after appearing on the fashion runway. With more content making its way onto social channels vs. TV stations, agencies need to shorten their time and streamline their processes to get to market faster with their work.
5) Constant Innovation
E-Commerce brands like Myntra are already experimenting with VR and AR. This encompasses everything from an app that will allow consumers to try on clothes and digitally recreate the fitting room experience, to location-linked services for better consumer targeting. Agencies need to keep abreast of technology to give their ideas the context and scale that is required in today’s landscape. Bidisha Nagaraj, Former Group President, Marketing, Coffee Day Group told us in her interview for Asia CMO how she looks for agencies with an innovation mindset and the ability to look at things with fresh eyes and do things differently.
The stakes are higher than they’ve ever been, and agencies that can navigate the murky waters of business coupled with the creative use of technologies are the ones who will be most valued by marketers.
Source: ETBrandEquity
