Agency Performance Review – A Strategic Partner Assessment

Situation:

A growing sandwich chain wanted to conduct a review of their advertising agency, but did not want it to be perceived as a threat to the business. They were looking for a consultant that would conduct a thorough review of the agency’s work and their profitability on the account.

Our Approach:

We assessed the situation and decided to divide the project into three distinct but related parts. The first part was a media planning and buying assessment, whereby we evaluated the media planning and buying guidelines, conducted a spot audit of several markets’ media buys and post buys, and also did a spot check of several radio markets.

The second part of the project was to conduct a “360 degree” assessment of both the client-agency relationship and the agency-client relationship. Our philosophy in conducting an agency review is that it is not only important to gain feedback from the client on how the agency is performing its duties, but it’s also important to gain feedback from the agency on how the client is doing with regard to providing direction to the agency.

This particular client agency partnership has multiple points of contact and communication, both at the corporate service center and at the field level. So we developed several feedback forms for the various levels of contact. Client feedback forms were provided to corporate personnel, field personnel, and franchisees. Agency feedback forms were provided to personnel in each of the departments that were involved with the clients business, including management, account service, creative services, media services, and accounting.

The third part of the project was to conduct an advertising agency contract, compensation, and profitability assessment. This was done in order to identify opportunities for improving the financial aspect of the client-agency partnership. Our philosophy is that an advertising agency partner should be profitable on the business, but not to the point where excessive profits take away dollars from the marketing and media advertising budgets.

Our Findings:

The first part of the project revealed that generally, the agency was doing an acceptable job of planning and buying media advertising. However, we identified several opportunities where more “bang from the buck” could be achieved.

The second part of the project provided valuable “360 degree feedback about the partnership between the client and the Advertising agency. We identified several areas where the client needed to improve its direction to the agency and we also identified the key areas where the agency needed to improve its service levels to both the client and its franchise system.

The third part of the project identified some accounting issues with billing and reconciliations that would improve the financials on the account. We also were able to outline an improved compensation arrangement that would save the client money, yet still allow for the agency to make a reasonable profit on the account, both short term and long term.

Results:

Both parties agreed that the Strategic Partner Assessment was beneficial. The client was able to review the advertising agency’s performance without making the agency feel threatened. The client was also able to gain more impact from their media dollars and review opportunities for saving money on agency compensation.
The agency was able to see their strengths, weaknesses, and opportunities to improve their part of the partnership, while still maintaining profitability on the account.