Management sees plainly and painfully the financial implications of engaging a marketing agency, [be that an advertising, creative, media or online agency], in the budget line in their financial reports. They are also often frustrated that this budget line item spirals out of control over the course of the campaign and that there is no visibility into the impact on the sales turnover.
Going to market, launching a new product or service or re-branding all costs money, yes even social media, and we all agree it is necessary. But unfortunately management still clings to that infamous old quote “Ï know half of my advertising spend is wasted, but I just don’t know which half!” However if marketing agencies were managed properly from the outset, this quote would not be valid anymore and there would be much more visibility into the impact of the agency’s effort on the sales turnover.
There are 5 key ways to ensure you get the best out of your agencies and it all starts before you have even chosen the agency. All these 5 points are prior to engaging the agency, before the selection process begins, even before the briefing document has even been sent to potential agencies you are inviting to pitch.
- Decide your key campaign goal [KCG], don’t yet specify the total budget spend needed for the campaign. The KCG is what you communicate on the briefing document NOT the investment needed to achieve it. Create a SMART goal [Specific, measurable, attainable, results oriented and time bound], ie. X units sold by X date, X$ in turnover or X number of level A leads approved by sales by X date. This sets the right tone [results oriented] with the potential agencies and they need to show they can link their effectiveness to the KCG and realistically calculate how much investment is needed. Once it comes to decision time of which agency to choose, a combination of creativity, realistic budget, results oriented plan and commitment to the KCG should be assessed.
- Decide what your maximum hourly rate per experience level is and percentage of the remuneration which is hourly based versus performance based. These should be part of the briefing document and agencies should only enter the pitch if they agree to these terms [along with signing the NDA]. Don’t ask agencies to submit their hourly rates as part of their proposal, this should not be up for negotiation, as it saves time later and stops costs spiraling out of control, as well as setting the right tone. Aim for at least 15% of overall costs to be performance-based remuneration linked to 3 key performance indicators [more on performance KPI’s in point 3 below].
- Decide 3-5 Key Performance Indicators, that indicate likelihood in the future, of achieving the key campaign goal [KCG]. Ensure those KPI’s are formulated in a SMART way and linked to the KCG, the best way to think about this is to think about the buyer process, for example if the KCG is “sell X number of units by X date”, the 3 possible KPI’s could be “By X date X number of enquires have been made through the free phone number or internet regarding the product.” or “By X date X number of searches have been made for the product name on the internet via Google.” Leave the actual numbers blank, the agencies need to fill in the blanks based on the KCG and their knowledge of what is actually achievable based on different scenarios of budget. Their estimates linked to budget should be assessed in the agency decision process.
- Split the campaign project into at least 3 phases, with 3 clear end points in time. Don’t have 1 big project with 1 end date, as this doesn’t allow for checks and assessment points to be built in during the course of the campaign or project timeline. Depending on the type of campaign, there should be 3 logical moments in time when you and the agency can track progress again the KPI’s and the KCG, and decide if a new course needs to be set and allows you to take action accordingly. It also allows for critical decisions to be made early enough.
- Finalize the agency briefing document and then ask agencies to pitch based on the same briefing. The briefing document should include the following elements:
- Company history in brief, mission, vales and vision,
- Why agencies are being asked to pitch, and what the procedure is,
- Contract terms maximum hourly rate per experience, % split hourly rate & performance-based remuneration
- KCG this is set before, 3* KPI’s [# left to the agency to complete], for each 3 phases of the campaign/project
- What pain does the product address. Product/service description with pricing, product type, positioning, competitive landscape
- Target audience [buyer, user, influencers], how market was segmented, 3 key personas of the end user
- What you want the audience to believe, to feel, and to remember from the communications.
- Key consumer insights, research reports about the buyer behaviour, product usage, focus group feedback, media consumption of target audience etc
- Keywords associated with the pain points the solution addresses
- Distribution channels, % split and trends, buyer process research
- What is expected during the pitch or proposal: Creative plan linked to personas and KCG. Estimate of total budget/investment needed and the likely KPI results over the 3 phases of the campaign.
If these 5 key points are followed the right tone is set with the agency from the outset, negotiations are easier, costs are less likely to spiral out of control, agencies are selected based on creativity and their commitment to the KCG end sales goals, you can track the progress towards the end goal over time and there is less wasted marketing spend as the agency are remunerated for reaching the KPI’s and for good performance.