Agencies must sell certainty, not hope, as marketer calls for greater accountability

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From left: Caroline Dempsey, Avis; Lambro Skropidis, LG and John Chatterton, marketing consultant

The marketing chief of electronics giant LG has called on agencies to share more of the risk with clients and to put more “skin in the game” in an environment where company executives are demanding a better return on their marketing investment.

Lambro Skropidis told a conference in Sydney yesterday it was time agencies began to sell “certainties” to their clients rather than “hope” and insisted they take greater responsibility for the end results of campaigns they have created.

Speaking after Trinity3 managing director Darren Woolley had outlined ways an agency could earn better returns from their clients, Skropidis told the Secrets of Agency Excellence masterclass that agencies cannot have it all their own way.

He told a panel discussion at the Secrets of Agency Excellence conference the client is presently taking all the risk and bearing the brunt of the cost.

“Increasingly the role of the agencies is changing, no longer are they being able to sell hope, they need to be able to sell certainties,” he said. “What agencies are going to have to ask themselves is what role do they play. Is it just ‘here’s a good idea, good luck with it’ or is it ‘I am going to contribute to taking some of the uncertainty out of the equation’.

“We [marketers] are being asked to take risk out of the discussion… and agencies can help us sell our ideas in the business. Increasingly, MDs are going to want confidence that the investment they are making in marketing will give them a return. So the agency has a role to say ‘I am your business partner and I’ll help you take out that uncertainty'”.

Referring to Woolley’s earlier remarks, Skropidis said it was “all well and good” if agencies want to charge more and get clients to “invest more in ideas”.

“But let’s have a think about what the client is doing for a moment,” he told delegates, many of them from agencies. “They are taking an idea you may have generated, usually they are investing in the research to see if it’s a good or bad idea, they are investing in the production and investing in the huge media cost to bring that idea to market.

“And at no point is the agency investing. What I think agencies have to start thinking about is if they are going to charge differently, how can they do that in a way where they are investing in their own ideas.

“If their ideas don’t work does that mean they don’t get paid? Do they remunerate the client for their investment in media? I don’t imagine that’s going to happen. But there’s got to be a point where agencies put more skin in the game. At the moment there is very little down side to most agencies. It’s a huge risk the client is carrying right through the process.”

Skropidies added there are simply too many agencies, few of which are understood by marketers.

“I think most marketers don’t understand the positioning of most agencies,” he said.

Marketing consultant John Chatterton, a former marketing director at Goodman Fielder, agreed with Skropidis that pressure is growing on overworked marketing departments.

“Marketing teams are getting smaller, and a lot more pressured. They are increasingly asked to be more efficient and to do the same with less people,” he said.

Agencies who can demonstrate value in such an environment – particularly in the digital space – will find “a very willing audience” while those whose value is not obvious will struggle, he said. He added there are “too many agencies” and not enough differentiation between them.

Skropidis added that too many companies are not demonstrating ROI measurements and replying on the gut feel of a campaign.

“I see too many companies where no one is doing any pre testing and no one is doing any post testing, there’s a lot of ‘it kinds of feels right’ and that is not going to cut it,” he said.

The panel also debated whether agencies should bypass the CMO and approach the CEO in a bid to forge a deeper relationship with a company, or “seek permission” from the chief marketer first. It followed remarks by Virgin Mobile chief executive David Scribner who described marketers as “gatekeepers”.

“If you think you shouldn’t ask permission and the CMO gets their nose put out of joint, is that productive or counter productive?” Chatterton asked. “Why would you try to broaden the relationship without dong it in partnership with the CMO?

“If you don’t you’ll only make the relationship worse. It’s perfectly reasonably to say we want a deeper relationship but work with the marketing director in a constructive way to do that.”

Visa head of marketing ANZ Caroline Dempsey said:  “It would be counter productive to try and go in a different direction without the marketers.”

Steve Jones


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