Kickbacks and rebates and markups - oh my! This isn't the Mad Men era anymore, join us as we discuss the trends and best practices to reviewing your contracts and managing your agency relationship. With the newly released ANA Media Transparency Initiative, the future of the media ad-buying industry is preparing for major changes.

1. From RFP to Contract,
How to Review Your Agency
#EMPOWERBL16

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Presenters
ACCOUNT DEVELOPMENT
MANAGER
EMILY TUCZINSKI
MANAGING DIRECTOR,
MEDIA VALUE
MARGARET LEWIS

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This session will cover…
Media Agency Review Trends
Agency Review Process
What Separates the Winners from the Losers?
3
4
1
Why Should you Review?2

4. Media Agency Review
Trends

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Similar offerings
The Media Agency Business…
A very competitive business
A pitch presentation
Similar skills
Heavy scrutiny on cost of this large budget line item
important part of the process of choosing an agency,
doesn’t generate sufficient insight to make a decision in
today’s complex media landscape

6. The average client-agency
relationship is 2.8 years…
Source: http://www.mediapost.com/publications/article/269966/top-reasons-agencies-lose-pitches.html
while the average CMO
tenure has doubled from
2 to 4 years.*

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Media agency reviews have surged
“Mediapalooza”

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Typical trigger for agency review: Change.
Whether good or bad, it’s time to re-assess when there’s…
New leadership
Significant change in business results
Media Disruption

9. Disruption in Digital

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Transparency & Integration
A more integrated approach between traditional and digital media
Advertisers are open-minded to programmatic buying – but with real
concerns about financial transparency, data ownership and access rights.
Not unusual for a majority of a digital budget to be in non-working media.
What’s in the advertiser’s interest?

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Elevated role of Procurement
Financial crisis in late
2000s
Work alongside media
teams
More actively involved in
pitch
Financial crisis in late
2000s
More actively involved in
pitch
“A former Agency Holding Company executive who left
the industry within the last two years reported that,
approximately ten years ago, client media pitches were led
with discussions about campaign strategy and an agency’s
ideas. He reported that this dynamic has now shifted to one
in which discussions about price take the lead.
He noted that “many” clients entering into pitches currently
send out large spreadsheets asking agencies to produce
detailed pricing information in advance of a presentation on
strategy. He describes this practice as a
“buying model, not a thinking model.”
- ANA Media Transparency Initiative, Part 1
Work alongside media
teams

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Need for data-driven advice
Consultants can be a critical resource to assist in the pitch process which is often
overwhelming.
Definition of Scope
Success criteria
Media pricing / incentive frameworks
Staffing & compensation
Shepherding the Process

13. What We’ve Learned About
the Pitch Process

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The Pitch Process
The advertiser takes on an ever-increasing responsibility when launching a review.
Understand that it will be complex and time-consuming
Respect the effort that will be put in by the agency
Take responsibility for the outcome
Ensure stakeholder alignment

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Global vs. local
Recommendation:
Procurement has stronger role at the Global Level, while the Local market clients
may favor an agency with better strategy and team chemistry that will blend well
with the local team.
Understand each others objectives
Make an extra effort to engage procurement
Share your work

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The Chemistry Factor
An undervalued factor during pitches is chemistry.
Consider this as important as the pricing or the strategy tools and
buying tactics being shown
Make time for getting a feel for culture; consider whether the culture &
chemistry check should happen at the beginning or later in the process
Identify the specific people that might work on your business
Recommendation:

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Factors of a winning pitch
Chemistry
Answering the brief
Challenging the brief, with a strong rationale
Differentiation
Aggressive pricing, both compensation and media pricing

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Popularity of PRIPs
Three main components of a Performance Related Incentive Plan that holds the
agency accountable and incentivizes the agency to improve.
Agency Service
Media QualityMedia Cost

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Popularity of PRIPs
Strong upward trend in use of Incentives; increasingly important to validate
performance
*Note: Sample size = 98 marketers;
1,011 client-agency compensation agreements
13%
19%
30%
35% 38%
47% 46%
61%
0%
10%
20%
30%
40%
50%
60%
70%
1991 1994 1997 2000 2003 2006/7 2010 2013
Use of Performance Incentives

20. Importance of Contracts

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Importance of Contracts
As part of the ANA and Ebiquity recommendations,
several factors to ensure a solid contract…
Expired/Unsigned Contracts
Contract Content
Contract Audit Rights
Contract Governance
Advertiser Responsibilities

22. As advertisers are held to a higher level of
accountability every year, they need to be…
confident that their media agency partners can deliver on
their promises
clear and realistic about their objectives
prepared to give the agency a genuine opportunity to be a
partner in their success