While most marketers and their procurement teams will focus on their agency or vendor selection, many overlook the benefits and advantages of reviewing their agency or vendor roster. The agency roster is the list of agencies and marketing suppliers selected to deliver the marketing plan’s requirements.
This roster design is often overlooked. We have found that many agency rosters have evolved organically, the product of legacy decision-making, with adjustments implemented reactively rather than being designed and developed strategically to deliver the marketing needs most effectively.
This has led to a cyclical pattern, as marketers add agencies to the roster, react to the roster’s size and complexity, and then start to consolidate and shed the agencies they believe they no longer need as they consolidate the supposed full-service agency, typically within a holding company or a village.
The issue has become more complicated recently with the growing attraction of in-house agency services, either developed in-house or outsourced from an agency or one of the ever-increasing number of hybrid in-house suppliers.
At some point, there is typically a discussion about the agency roster, during which it is common for someone to ask what the ideal agency roster is or, more accurately, what the best practice is for the agency roster.
The answer to this depends.
So, I thought it may be worthwhile exploring some of the things that this depends on. While this is no longer a best-practice agency roster model that will suit all advertisers, some best-practice-specific principles allow you to custom-build the ideal agency roster for yourself.
Consolidate or diversify?
Let’s address this first issue, which is the idea that there are only two options: consolidate or diversify the roster structure. There are actually many different roster structures, most based on tried-and-true structures, but then there are an infinite number of variations on this theme.
This means the decision is not really whether to consolidate or diversify but what is the right roster structure for you and how to populate it.
Of course, if you have way too many agencies and suppliers, it is certainly common sense to rationalise them to a more manageable number. But likewise, if you have only one or two and they are stretched and under-delivering in some core capabilities, then it also makes sense to add agencies that extend these capabilities of the roster.
The core principle here is that “whatever the roster structure, you need as many agencies as possible to deliver the capabilities you need to be delivered to the standard required in a roster with as few agencies as possible.”
It is more important to decide what roster structure you need and then consider how you will populate it.
Needs and requirements
The starting point is your marketing strategy and the requirement to implement it. This is easy to say, but getting this right requires a level of complexity and nuance because there are a multitude of considerations in determining these needs and requirements.
One key consideration is the geographic spread that this roster is required to operate across. Is it a single market, a regional market, or a global one? What is the diversity of the requirements across the core or hub for the advertiser? How does it vary across the other markets? Are some markets requiring more specialist capabilities in a particular area than others?
These all have to be considered upfront.
Next is the category in which the brand operates. Many categories have their own requirements that require specialist agencies on the roster, such as Motor Shows for Automotive Advertisers, on- and off-premise expertise for Alcoholic Beverages clients, and specific channel marketing skills for Insurance advertisers.
Next is the maturity of the market and the company or brand’s position in that market. Is the brand a challenger, second in the market, or market leader? Is the market growing, plateauing, or shrinking? This has a substantial influence on the marketing strategy, of course, but also on how the marketing strategy will be executed in the markets.
Once you have a list of the capabilities required to deliver the marketing strategy, the next consideration is to prioritise each capability based on strategic importance and the level of investment in each, which will inform the importance of that capability in the roster.
We recommend using both strategic importance and investment because while you may think the two go hand in hand, the fact is that often, a capability may be strategically important but has a low investment level because of an expected low return on investment in that year, especially if the marketers are using a Zero-Based Budgeting model for investment allocation.
Level of complexity
You need to consider the complexity of the marketing requirements, not just across a specific brand but also across the company’s whole marketing portfolio.
Earlier, we considered the complexity of marketing across many markets and the variations across each market. Here, we are considering the variations across either multiple brands being marketed within the organisation or multiple products within one brand and the complexity this brings, or perhaps multiple categories, or it could even be the consideration of the complexity of all of these.
In considering the agency roster model, you need to be able to assess the requirements and needs from a micro level on an individual brand, product or service, category, and market. You also need to be able to scale this up to a macro view of the requirements of the whole organisation, as it is here where the biggest rewards come from getting this right.
The biggest issue we see in this process is that often, marketers only see the areas of the requirement that are either core or high-profile and overlook some important low-profile but essential requirements in delivering the marketing plan.
The irony is that these low-profile requirements often collectively require a significant investment of the marketing budget and are, therefore, impacted by the poor roster structure.
Potential disruption
Before you consider making any changes to the roster, it is vitally important that you intimately understand the current roster. By this, I do not mean which agencies make the roster, although this is important, and many smaller ones are often overlooked, but also where the budget is being spent and what is being delivered in both cost and quality to understand where value is being delivered, lost, and wasted.
Only by having a detailed model of the current roster can you clearly identify the areas with the biggest issues and, therefore, the greatest opportunity to deliver improvements.
We have been called in too late, often when the marketer is in the middle of some pitches, when they realise that what they are trying to achieve may not be delivered. The problem is that they have no current state against which to compare the future roster state they were working towards.
Once the current roster state is clearly agreed upon by all stakeholders, you can explore various future states and evaluate the benefits of each proposed model.
We would caution people not to evaluate the roster models solely based on the number of agencies or any projected cost savings but also consider the level of disruption that will be incurred in transitioning from the current state to the agreed-upon future state.
Too often, identified savings are completely eroded by the direct and indirect cost of massive transition or change programs across a roster, without even considering the lost intellectual property and brand knowledge that leave with the agency you replace. Therefore, we recommend always looking for ways to utilise existing agencies within the new roster to minimise disruption and maximise value.
This is certainly a process that any marketer can undertake or could do with their procurement partners. To be honest, we have found that many of the companies we have worked with engage us in this process because they want a fresh and independent perspective on the process and one that does not make wholesale changes to the roster simply to justify the cost.
So sorry to say there is no one roster structure or model we can recommend that represents best practice, but we have some tried and proven principles to assist you in creating the perfect roster for your needs.
Rather than offering a one-size-fits-all solution, TrinityP3 custom designs a roster model to suit your particular needs. We routinely develop several of these models to encourage consideration and discussion about what is the best solution for your marketing organisation.
You can hear more about the TrinityP3 Agency Roster Alignment Service and how it will deliver a custom-fit solution for you.
