NEWS & OPINIONS

Published on ANA.net by Chris Warren

A few years ago, the Hershey Co. was all set to begin a media agency review. But just before the iconic chocolate maker was about to kickstart the review process, the company decided to pump the brakes. "We realized we weren't ready yet," says Sherry Ulsh, director of indirect procurement at the ANA member, adding that the company hadn't done the internal work needed to be clear about what it wanted from a media agency and how the agency would be successful once it was selected.

"Our media sits under a center of excellence, so the media team would be working very closely with them and procurement. And we hadn't established who had decision rights about different topics and who would be responsible for what," Ulsh says. "We needed to bring in the brand heads to get their input and we also brought in an outside consultant to help. It was a lot of work and a long process. But I think it made the process work much better internally."

Ulsh and her colleagues were so keen on building internal alignment about the selection criteria and capabilities they expected from a new agency that they enlisted Michele Buck, president and CEO of Hershey, to participate in the agency review process at a virtual meeting with all agency candidates.

Hershey's methodical, holistic approach to the agency review process bucks a troubling and growing trend throughout the marketing industry: the typical price tag for agency reviews is on the rise, both for the agencies themselves and the brands they serve.

Indeed, the average agency review now costs a combined $1 million to $1.2 million for marketers and agencies, according to an ANA/4A agency-commissioned study of 329 brand marketers and agency executives released in July.

"The Cost of the Pitch" study, which was conducted by Advertiser Perceptions, also found that reviews involving an incumbent agency have a higher price tag. For example, incumbent agencies typically spend more than $400,000 to participate, about double the cost for newcomers.

Agency reviews are also getting to be a bigger drain on time. When an incumbent agency participates, the study found the selection process takes an average of 2.5 months, and choosing a new agency takes 3.2 months.

Fewer Agency Reviews

The rise in agency prices is juxtaposed against a decline in agency reviews. According to the marketing consultancy R3, per Ad Age, the number of creative reviews during the first half of 2023 fell to 117 compared to 153 in the same period in 2022. Media reviews also dropped from 51 to 44 during the same timeframe. Even as the volume of reviews decreased, R3 reports that the average billing in 2023 jumped to $19 million from $11 million in 2022.

Unsurprisingly, agencies take a dim view of the review process. According to MediaSense's recent "Pitch Smart" study of more than 100 mostly C-suite and director-level agency professionals, 86 percent of respondents agreed that the current agency review and pitch processes are prohibitively expensive and time-consuming, while 49 percent said they dilute agency culture.

What's more, 46 percent of agency respondents said it is increasingly difficult to find staff to work on extensive pitches and 43 percent agreed that it is more challenging to decide what to pitch for.

While it may be tempting to interpret the feedback from the MediaSense and ANA studies as proof that the agency review process is broken, the question is far more nuanced, says Steve Boehler, a founding partner of Mercer Island Group, a consultancy that runs agency reviews and has worked with Microsoft and Starbucks, among others.

"Client marketers and/or their procurement organizations run 65 to 75 percent of all reviews, and there is no standard approach," Boehler says. "Some run well-designed, respectful processes. Many don't. And most are likely somewhere in the middle; they mean well and run reviews that aren't perfect but aren't awful either."

Reviews run by consultants, Boehler says, are also a mixed bag. He says some are "truly awful," and involve charging agencies hefty fees to take part in reviews or to be included in a consultant's database while others demand agencies create "silly" videos as part of the review process.

Mind the Gaps

Both marketers and agencies need to fill in the gaps in the agency review process. Melissa Lea, founder and director of Muster Consulting, which helps marketers run agency reviews and whose clients have included brands like Honda, the NFL, and Novo Nordisk, says the sort of self-reflection and strategy alignment Hershey conducted in its media agency review is essential to a successful process.

"I have run reviews where the marketers don't have a budget, don't have staff that is going to be interacting with the agency, and don't have a scope of work. They're just unhappy with their existing agency," Lea says. "If I have a client that isn't clear on strategy and the role an agency has in executing that strategy, my job as a consultant is to get them to do that first."

When Muster Consulting works with marketers preparing for an agency review, it leads a thorough needs assessment aimed at uncovering the pain points and capabilities that the marketer requires the agency to address, along with insights into the current agency relationship.

This is done through stakeholder interviews and online surveys, among other things, which are designed to ensure a single stakeholder's strong opinion doesn't determine the selection criteria used to develop a list of potential agency partners and eventually select a winner. The process is also designed to take into consideration all stakeholders' opinions, because stakeholders can reveal important challenges in written form as opposed to orally, and it gives the marketer time to reflect on what is important to them. The needs assessment results in selection criteria that Muster uses to develop a list of agencies for its client to consider.

"We use that selection criteria throughout the process and it is the template against which everything will be judged," Lea says. "The client has to buy into it, and then we use the criteria to score the initial list of agencies and use it to get a short list of agencies to reach out to and get more information."

For example, Muster recently worked with an unnamed client on an integrated agency review and developed selection criteria. For each criterion, agencies were required to provide specific examples of work that demonstrate their capabilities and success executing what the marketer needs. It's worth noting, sometimes the criteria has nothing to do with work produced, but is about who the agency is and what they stand for, how they are organized, and how they service clients, among other things.

Candor Wins the Day

Agencies can improve the review process by being transparent about whether they have the specific capabilities and experience the marketer seeks. "Some agencies will try to fudge it and say they have experience they really don't," Lea says. "That doesn't help the process. Agencies need to be honest with themselves about what business they should pitch for."

Hershey also works hard to ensure that the agencies it is considering are a good fit, and the company is highly prescriptive about what materials agencies need to submit.

"If we are looking for a case study or thought leadership, we are very clear about what details they need to provide," Ulsh says. "We are not looking for 95-page decks. It's very specifically laid out. We don't want people spending time creating all these things we don't need. We want the case studies that are applicable to us, who is going to be working on our business, and the things that we think matter."

Boehler, from Mercer Island Group, stresses that a significant gap in the agency review process is simply whether it is necessary in the first place. Constant communication and feedback, he says, go a long way in strengthening existing ties.

"Most client-agency relationships do not utilize an annual third-party 360-degree process that helps the partners continuously improve their approaches to being effective partners," Boehler says. "An annual 360 process can help maintain a focus on enhancing the productivity of the relationship."

Dive Brief:

• The National Football League has named Horizon Media as its global agency of record for strategy, planning, activation and measurement, according to information shared with Marketing Dive.

• The agency will lead the league’s paid media and partner with the league for paid and owned asset optimization. Horizon will use its proprietary data platform, blu, to develop consumer insights and develop personalized marketing campaigns.

• The assignment, which came after a six-month review led by Melissa Lea of Muster Consulting, comes as the league is looking to expand its global footprint and influence, and as the relationship between sporting leagues and fans is in flux.

Dive Insight:

The NFL business is a big feather in Horizon Media’s cap and further bolsters the agency’s recent moves in the sports marketing arena. Last year, the agency created Horizon Sports & Experiences, which merged Horizon’s sports and entertainment marketing and Web3 units to provide functions including intellectual property creation, media rights management and sponsorship deals to bridge digital channels with real life. 

“As we continue to refine our approach to fan development and engagement, we were looking for a partner to help us combine the intelligent use of data-driven media activations with our best-in-class storytelling,” said Dave Bolger, the NFL’s vice president of consumer media, in a statement. “[Horizon’s] fan-first planning approach, coupled with their impressive capabilities across the media landscape, will surely help us bolster our efforts to grow fandom and NFL affinity around the globe.” 

Sports leagues around the world are looking for advantages as viewers increasingly adopt online viewing habits, and give their attention to newer offerings like e-sports and pickleball. Several leagues have struck deals with streaming companies, including the NFL, which shifted its “Thursday Night Football″ programming to Amazon Prime, and Apple TV+, which is the home to Major League Soccer. 

The NFL last December announced a multi-year agreement to bring its NFL Sunday Ticket to YouTube TV and YouTube Primetime channels starting this season. The program had previously been at DirecTV, and with the shift, YouTube promised new features and functionality for viewers. The deal also included a new NFL International show and creator program, which Horizon noted it would be deeply involved with. The NFL also launched the NFL Zone as a permanent feature in Fortnite Creative, to attract more young fans to the sport. 

This shifting relationship between sports leagues and fans requires new sets of expertise and insights, which not only led to the creation of HS&E, but also was a major factor in the agency landing Entertainment, the National Basketball Association’s marketing and production arm, as its first client.

(Read the full article on MarketingDive)

Horizon Media, which has been stepping up its sports media, marketing and event game, just scored one of the biggest: the media AOR for the National Football League.

The account, which includes strategy, planning, activation and measurement, includes "all paid media," as well as a role working with the NFL on its "owned asset optimization."

In a statement, Horizon said the goal of the assignment is "deepening fandom and engagement," adding: "We will also lead the NFL footprint global expansion and will work with our global affiliates in other key countries."

Billings were not disclosed, but the assignment follows a six-month competitive review handled by Melissa Lea of Muster Consulting.

Incumbents included Omnicom's OMD (strategy lead), independent Tinuiti (digital media buying), WPP's Mediacom (Mexico), and Starcom (Canada), according to an earlier report by AdAge.com.

(Read the full article on MediaPost)

The NFL has hired Horizon Media as its global media agency of record for strategy, planning, activation and measurement, Ad Age has learned. 

Omnicom’s OMD had been the NFL’s lead strategic media agency, while digital buying was handled by Tinuiti. WPP’s Mediacom handled media in Mexico, while Starcom had Canada. Horizon will assume all of those duties.

The NFL spends most of its paid media on digital properties. It also benefits from so-called institutional arrangements in which it gains inventory via bigger deals it has with the TV networks and digital media companies that carry its games. Horizon will be tasked with optimizing that inventory as well as the inventory the league has on its owned and operated channels, including NFL Network. 

The account went into review late last year and it was handled by Muster Consulting.

The paid media budget amounts to about $30 million, according to the request for proposal sent late last year obtained by Ad Age. It notes that the assignment includes helping the league determine the best use of its inventory across the calendar year, which includes the regular season, postseason, NFL Draft, NFL Combine and other key periods.

Horizon will also be tasked with driving awareness and subscription for NFL+, the league’s streaming service launched last year, according to the RFP. The assignment also includes helping the NFL grow its international business in markets including Canada, Mexico and the U.K. 

(Read the full article on AdAge)

Honda has put a significant portion of its U.S. media account under review. Up for grabs is the automaker’s so-called Tier 2 media business, which includes regional advertising that is often used to plug sales incentives and is closely linked with individual dealer efforts.

RPA currently handles Honda’s national creative and media business, including some Tier 2 media work. Other agencies involved in Tier 2 media include Horizon Media. Honda Motor Co. spent $1.39 billion on U.S. advertising in 2019, including the Honda and Acura brands, according to the latest figures from the Ad Age Datacenter. (The figure does not include the entirety of dealer association spending that is a part of the review.) A person familiar with the review suggests the Tier 2 account could represent as much as $550 million in spending. 

The review is being handled by Muster Consulting, which referred all questions to Honda.

(Read the full article on AdAge)

If there was a song for 2020, it would undoubtedly be the theme from the 70’s PBS kid’s show Zoom (“Come on and Zoom, Zoom, Zoom-a, Zoom!”) Zoom-ing aside, that wasn’t all that changed in the marketing world. From media and marketing plans that sometimes looked like a game of Pick Up Sticks; agency consolidation, furloughs, and layoffs; to my favorite, the potential demise of the “lunch table, pack ‘em in like sardines” open office plan (geez, it only took a global pandemic for that!), this year took its toll. But we also learned a lot too. About our companies, brands, colleagues, partners, marketing, and most importantly, how creative and efficient people can be when faced with unprecedented challenges to revenue growth and cost pressures.

 Remote Work Can Work

Back in 2013, a newly installed CEO of a major tech company banned remote work. We all remember the brouhaha that ensued. Study after study shows that remote workers are healthier, happier, and more productive. 2020 put that theory to the test and then some. What became apparent is the importance of having the right people, organizational structure, and partners in place to achieve that productivity (plus the right technology.) Our team worked closely with marketers to assess their internal resources and capabilities, compare their structures with other high-performing organizations, and examine if in-housing (even while working remotely) could be an opportunity for cost-savings. Through it all, 2020 became the year of self-reflection, adjustment, and accommodation. Work needed to be done no matter where you were and we figured out how to do it together.

 Efficiency Must Be Balanced with Effectiveness

Business and marketing success has always been the result of great partnerships. This was never more true than this year. No business or brand could have survived 2020 without transforming, evolving, and optimizing relationships especially in the areas of digital innovation, e-commerce, and martech. As the old saying goes, you must invest money to make money, and you must invest wisely. Cutting marketing spend, be it in the form of reduced media budgets and/or agency partners, for the sake of efficiency was, in some instances, short-sighted and led to disastrous business results. To avoid this, our team helped marketers evaluate their roster, assess overlap in service offerings, review and engage new agency partners, all with an eye on achieving future-fit organizations and financial efficiencies.

 Every Dollar Counts

Even before the pandemic, it was a matter of good business sense and governance to conduct financial audits. They provide transparency into business practices and ensure your partners are living up to their legal commitments. Financial audits, be they of media, creative, other third-party relationships, or fees, are also risk mitigators. And this year, reducing risk and having a keen understanding of where every dollar was became paramount. Our Audit practice has helped marketers discover previously unknown risks, mitigate others, and recover money and media credits – some in the high six-figures – that they would have otherwise never seen. This year, of all years, it truly was better to be safe than sorry.

 When the Going Gets Tough, It’s Important To Know Where You Stand

Marketers started the year knowing who their partners were. They ended the year not so sure. Business consolidation, furloughs, and layoffs took a toll on agencies, media, and martech companies alike. Here today, gone tomorrow became a common theme. This had an enormous impact on marketers from both a business and legal standpoint. Were contracts being honored? Could they be adjusted or voided? These questions came up over and over again and through Contract Audits, our team was able to help marketers keep their partners accountable and save their organizations’ money.

 Ask for Help

The marketing industry is filled with brilliant people who, for the most part, want to do the right thing. We are a community that loves to learn, grow, and help each other succeed. What 2020 showed was that we have the ability to be flexible and pivot when necessary. Smart marketers ask for help when they need it and offer help in kind. We are and will continue to be resilient together.