The 4A's Management Services team works with members and marketers to develop guidance and benchmarks to facilitate the effective and profitable management of agency operations. Business Development
The agency search-new business process is an important industry dynamic. Because agency new business activities are a growth driver for agencies and represent a major resource investment, the 4A's new business community partnered with the ANA to evolve agency selection briefing guidelines for marketers and the 4A's authored review screening guidance for agencies. The association also initiated a preliminary dialogue with marketers on the need to revisit outdated client conflict policies.
4A's committee discussions and survey data identified an opportunity to improve agency search best practice adherence by developing industry information and tools related to:
- The use of RFIs (Request for Information) in the initial, long-list phase of agency reviews
- The appropriate use and structure of RFPs (Request for Proposal)
- Agency selection briefing guidance for each phase of reviews including information on how briefings should be conducted and what information should be included in briefings.
To address these opportunities, an ANA-4A's task force developed Agency Selection Briefing Guidance
, which provides briefing best practices for every phase of a review and suggests the information that marketers should provide to agencies as a review progresses from the initial phases (e.g., RFI, RFP, Credentials) to the later phases of reviews. The ANA/4A's Agency Selection Briefing Guidance
is a supplement to the highly regarded 2011 ANA/4A's Guidelines for Agency Search
that provided best practices for both clients and agencies to consider in the agency search and selection process.
Best-in-class agencies develop screening guidelines that they use when qualifying an opportunity. Recognizing that agencies can dramatically increase new business performance by learning to be more selective in the pursuit of client opportunities, the 4A's new business committee developed 4A's Opportunity Screening Criteria Guidance
that advises that just as clients screen out agencies to find the best fit, so should agencies screen clients.
Members of the new business committee recommend that agencies develop and adhere to criteria for screening new business opportunities because:
- New business activities are an important costly financial and emotional investment
- Focused new business efforts are more likely to be successful
- There are more types of reviews (AOR, project, digital, PR, global, etc.) than ever before
- Not all business is worth having
To help agencies get started, the committee's opportunity screening guidance includes examples of criteria that are being used by leading agencies.
Most marketers, when assessing agency resources, include consideration of an agency's recent category expertise, relevant marketing services experience and efficiency capabilities. These agency screening and selection criteria are used because the marketer's interests are well served by leveraging vendor expertise and scale.
In 2013, the 4A's initiated preliminary discussions with the marketer community on the topic of Leveraging Expertise & Scale (aka Conflicts)
. The association is urging the client community to consider adopting less restrictive agency conflicts policies. The operative question in an interconnected marketing ecosystem should be – "Is it a conflict or is the marketer smartly leveraging category expertise, proven servicing experience and scale efficiencies?" Client Compensation
The impact of client procurement on marketing expenditures and vendor terms ratcheted up another notch in 2013. Marketing procurement groups are expanding their negotiating tactics to include aggressively budgeting agency service efficiencies, threatening to extend payment terms and endeavoring to shift marketing activity risks through unilateral service agreement indemnification and guarantee provisions.
The focus of the association's client compensation initiatives is to equip members with information, guidance and tools that help agencies obtain fair remuneration and equitable terms of service in an uncertain economic environment that is increasingly subject to aggressive client procurement practices.
4A's finance committees developed best practice guidance to assist the agency community in dealings with one-dimensional client procurement. The agency financial management toolkit was expanded in 2013 to include:
- Senior agency executives suggested proactive positive steps that agencies should take when negotiating client compensation, i.e., "Do's" as well as behaviors that agency management should not condone and practices that agencies should stop doing, i.e. "Don'ts." In the guidance paper Client Compensation Negotiation—Best Practices Do's and Don'ts, 4A's finance committees recommend that agency management review the agency's compensation expectations and principles prior to every significant client compensation negotiation.
- The association explored pricing strategies and negotiations in Lessons Learned from Other Professional Service Industries. Key findings, which were communicated at committee meetings as well as at the 4A's Management Practitioners Forum, noted the importance of having access to the client C-suite, documenting pricing policies and the need to establish push back and walk away thresholds.
- Association leaders debunked the use of invalid benchmarks by client procurement and compensation consultants. Bryan Wiener, chair of the 4A's Digital Board, communicated why "Working/Non-Working" ratios are no longer appropriate given the growth of marketing activity that is no longer driven by paid media.
- The 4A's also provided agencies with important benchmark information in 2013:
-- 4A's Media Services Compensation Survey provided information on client service arrangements that combine paid media planning and buying services. The report covers compensation methods and equivalent/effective commission rates for traditional, digital and full service (traditional & digital) arrangements.
--During 2013 there was a disproportionate amount of industry conversation triggered by a handful of marketers that publicized plans to consider changes to their vendor payment terms. Press headlines led to confusion about which media and marketing services, if any, might be impacted by marketer proposed changes to vendor terms, and the extent of those changes was unclear. In order to provide balanced and accurate industry discussion on vendor payment terms and as a mechanism to provide robust information on actual marketplace conditions, the association conducted the 4A's Agency Billing Practices and Client Payment Terms Survey Report. Summary findings noted that the predominant practice is for clients to pay agency invoices within 30 days, weighted payment terms are in the range of 32–36 days and agencies' pre-bill clients that operate with slower payment terms.
The 4A's provides members with the management tools needed to accommodate the changing dynamics of agency operations. For example:
- Project-based assignments from marketers are on the rise. To assist 4A's members in addressing complexities related to assessing and structuring project assignments, the association issued Agency Best Practices: Project-Based Assignments Guidance to help agencies more effectively and efficiently manage the challenges associated with performing project work. The guidance includes suggestions for assessing and structuring project assignments, tips on managing projects and answers to project FAQ's.
- The association provided foundational agency operations benchmark information through a diverse range of member surveys:
-- The 4A's Employee Compensation Survey is an iconic industry information benchmark that captures data for 34,000 employees at over 270 agency offices.
--The Analysis of Agency Costs Survey contains one-of-a-kind staffing and operating cost-ratio information for agencies across a comprehensive range of agency size units.
– The 4A's About Employee Benefits Series of surveys provides industry trends on agency employee benefit plan structures, training, retirement plans as well as periodic monitoring of leave benefits and other employee benefit plan elements.
--The association introduced the Project Management Survey Series in 2013. The initial phase of the series gathered information on project management organizational structures, departmental responsibilities, staffing resources and servicing ratios.
--Management Services provides members with talent management information in areas such as job descriptions, planned raises, recruitment best practices, structuring executive compensation, payroll administration, bonus compensation and organizational culture.
The association partners with legal and intellectual property experts to provide members with access to information and guidance on critical legal and contractual matters. The 4A's Legal Consultation Program
provides a conduit for members to access premier industry expert legal services that might not otherwise be available.
The Management Services team is providing information, best practice suggestions and community discussion forums for agency managers across a broad range of topics such as sales and use taxes, client relationship management, media audits, mergers and acquisitions, commercial production, systems software, data security and more.