Why So Many Agency Reviews?

Business Insider reported in Map that there were 20 major agency reviews in play at that time.  

Cost Containment — clients are under significant pressure to drive top and bottom line financial results.  You increase the top line by selling more product and the fastest way to increase net income is through cost reduction.

Procurement

• Executives and boards are more actively engaged then ever in ensuring costs are contained   and decreased year over year.
• Procurement is always provided yearly goals to reduce expenses/get more favorable financial terms.
• At the beginning of each year, the Procurement Teams are focused on getting negotiations/cost reductions quickly in order to hit those goals as soon as possible to maximize cost savings.

Clients

• Marketing budgets ain’t expanding at double digits…. but clients being asked to do more with much less.  More business lines, products, sales, channels, country’s, etc.  
• Staffing is not expanding with the growing business demands. Thus, clients are relying more on agency staff resources to help pick up the work.
• Tactics— digital media is chewing up more dollars given staff time, creative,programming, etc.   The costs associated with digital marketing haven’t yet started to decline in cost.
• Deck Chairs — CMO changes always put reviews in play.  And CMO’s sometimes want to bring in their own agency.
• Statements of Work — clients aren’t putting together accurate or complete SOW’s..so an agency can’t plan for proper resources.

Communication 

• Clients do not set expectations with the agency, so the agency might think it’s banging it out of the park, when in reality their missing the mark. 
• eMail vs. Talking — the ability to really communicate is hampered by email.  Yes, you can put it all down for future reference…but why don’t the client and agency sit down first and talk about campaigns, issues, expectations… then put it in writing.

Staffing

• In order to keep costs low, agencies will put less expensive people on the business.  These folks are energetic, etc., but getting the right level of person, even if they cost more is critical.  And by the way… this usually happens because the costs have been cut so much, the agency needs to lower costs to make the appropriate profit level.

Other

• If sales or results aren’t achieving success, the agency get’s blamed.  Regardless as to whether the results from campaigns are positive.  
• Pile On — I’ve noticed you usually have a “vocal client” who isn’t happy with the agency and starts to complain across the company, getting everyone to pile on… It’s amazing how a strong/vocal client can control a group.
• The “Grass is Always Greener” — yep, as much as I hate to say it sometimes it’s as simple as that.  “‘If only I had that agency…”
• Geographic — any skill weakness or lack of support in regions and county’s can also be the kiss of death.
• Shiny New Object — getting something new to play with is sometimes the reason for switching.. I’ve heard Executives say “Let’s just get a new one.”  

I’m sure there a ton of other reasons — the moon and tide changes probably impact it or perhaps someone has created an agency “voodoo doll”…

Scott