Clients want espresso - not latte - from their agencies

BMC Software recently conducted a search for a new global agency.

BMC Software recently conducted a search for a new global agency. RFPs are a great investment - you are guaranteed to learn a lot. That's important, given the disruption sweeping across our profession. Big change brings new demands, but many are not recognized until they cut deep into the top line.

I've worked for three big firms, but when I look at the agency model, it's clear how much it cripples their ability to adjust to changes we're all seeing. Clients are innovating and changing faster than their agencies and many of us are not getting what we need. The CMO Council found that 43% of clients were frustrated by the lack of innovation at firms and 33% failed to see the business impact anticipated.

Many large agencies have drifted, becoming inconsistent. Clients are weary - and wary - of the stale, decaffeinated agency experience where talent, initiative, and capabilities can vary wildly. In too many instances, we're paying for espresso and being served latte.

Starbucks has it right - people are not only important, they're everything. Agencies must be a lot pickier about who they bring in. Clients want teams with more smarts and less on-the-job training. This change will drive a new financial model. Firms have not invested enough in analytics-driven programs, preferring to leverage their people's industry knowledge. We're in the era of big data. The trust gap between an educated guess and real insight is deepening. The consequences of getting caught on the wrong side will be huge.

As part of a new model, agencies must integrate strong analytics capable of informing and maximizing a campaign's impact. Leveraging smaller, smarter, more powerful teams will be key to future success.

Agency rates are tied to labor costs, which is no guarantor of value. Time and materials billing is a dead man walking. It is being swept aside by flat quarterly fees and piped into analytics.

Those who embrace this new paradigm will vault over competitors to win pocketbooks. As the profession stratifies based on performance and merit, higher billings and better compensation will follow. That means more than just better coffee for clients - there's a lot of cream on top for agencies as well.

Mark Stouse is VP, Global Connect, at BMC Software and a leader in marketing measurement and analytics.

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