Trends impacting advertising and/or marketing agency relationships with clients since the onset of COVID
Trends impacting advertising and/or marketing agency relationships with clients since the onset of COVID include the need for relationship flexibility, changes in payment schedules, client-agency relationship reviews, and the predicted emergence of new client-agency relationships. These trends were identified from top industry practitioners, industry commentary, and media industry sources operating in the US.
1. Relationship Flexibility
- Marketing Week reports that due to the economic strain brought on by the COVID-19 pandemic, agencies have become more open to a “greater degree of flexibility” in their client relationships to accommodate the prevailing harsh business environment.
- Quoting an Uplers survey that covered the US, Australia, New Zealand, and the UK, Marketing Week reports that over 58% of agencies interviewed have offered flexible contract terms while a full 28% reduced contract fees.
- An article by Smart Brief goes on to note that mid-sized agencies, those with 25-100 employees, offered the most flexible terms.
- Darren Woolley, Founder and Global CEO of Trinity P3, comments on this trend, noting that companies that enjoy flexible agency relationships “may be feeling fortunate in times of crisis” as this does not bind them to commitments.
2. Changes in Payment Schedules
- Forbes reports that some agencies have had to adjust to changes in payment schedules by their clients as a response to the harsh economic downturn brought about by the pandemic. These changes will help companies “cut back and pause” expenses.
- Digiday highlights Kraft-Heinz that enforced a 120-day payment structure change to their agencies. The article notes that the giant food company will create more cash for other business areas by pushing the payment schedule by four months, noting that clients such as Kraft-Heinz will survive by efficiencies, “rather than top-line growth“.
- A separate analysis by Digiday reports that while agencies pitching for new business have reduced their media spend budgets and fees, industry consultants expect brands to change the payment terms and schedules for the agencies chosen. This, the article goes on to note, is because clients want to save up as much as possible “amid the uncertainty of the months ahead“.
3. Relationship Reviews
- According to Richard Robinson, Managing Director of consultancies Oystercatchers and Econsultancy, the COVID-19 pandemic will cause clients to review their relationships with agency partners. He says, “If you’re a brand or an agency, take this time to ask yourself when the last time was you looked at your common purpose, joint philosophy, ways of working, commercial terms and scope of work … Will it prevail?“
- This assertion is endorsed by this report by Reed Smith in conjunction with ANA, which found that due to the economic strain brought on by the pandemic, brands are looking to reduce their marketing and advertising budgets and “cut costs where possible“. This may include the termination of agency contracts, delay payments or ask for credit, or modify scopes of work.
- As of September 2, 2020, Digiday reports that about 950 advertisers concluded their reviews estimated to be worth $10 billion in ad spend. An additional 75 reviews are expected to be done in the coming months worth $5 billion. Digiday reports that the focus of these reviews was largely on redefining the scope of work done by agencies, not just how agencies spent or will spend the money.
- Robert Schreurs, the Managing Partner at digital media consulting firm Digital Decisions, comments on these reviews noting, “From the many pitches we’re seeing in the works, they’re less about advertisers being inherently unhappy with their current agency and more an acknowledgment that they need different things from them”. Digiday explains that with “financial and civil unrest” brought on by COVID-19, brands are keen on insights on the changing media landscape and how their media plans can adequately respond to these changes.
4. New Relationships
- The Drum quotes COMvergence’s study, New Business Barometer H1 2020, that reported that food and beverage brands were the most active categories of advertisers looking for new agency partners. Unfortunately, research was unable to glean more insights from this report as it is behind a paywall.
- The Drum quotes another finding of the study that reports that 3% of brands that had been using in-house ad tech services have outsourced to agencies in an effort to cut costs.
- Pitching has also been ongoing, pointing to the possibility of new client-agency relationships. Lisa Colantuono, President of AAR Partners, notes that except for one client, all her current pitches are on track. Stephanie Brimacombe, Group Chief Marketing Officer at VCCP, narrates on the search of new agency relationships by brands, saying “After about 12 weeks, things started to pick up again. After the initial paralysis, we saw a couple of clients who had been planning to change agency relationships spring into action and review their agency structures, models, and ways of working”.
Best practices for advertising and/or marketing agencies around virtual pitching in the COVID era
Best practices for advertising and/or marketing agencies around virtual pitching in the COVID era include adequate preparation of the presentation, choosing the right video conferencing software, and the importance of rehearsing and timing of the virtual pitches. These best practices were garnered from marketing and advertising top leadership, industry practitioners and commentary, as well as renowned industry thought leadership sites such as Hubspot and Ebiquity.
1. Video Conferencing Software
- Ebiquity advises agencies to choose the right video conferencing software for their virtual pitch. The consultancy further adds that the software should be the same one used by prospective clients.
- Luis Vasquez, Associate Director of Venture Capital Collaboration at UC Irvine Beall Applied Innovation, reiterates this, adding, “If, for example, you’re presenting to investors, ask what software they would like to use, and, as a CEO or entrepreneur, you should be able to adapt to that software rather than imposing your own software on the audience. After all, it’s not about your ease“.
- Hubspot opines that agencies must choose excellent video conferencing software, as their audience will view and audit their performance on this software. Further, Abstrakt Marketing Group also notes that agencies must ensure that their video and graphics are high resolution and present well.
- Ebiquity also proffers that agencies must have back-up plans when it comes to their video conferencing software, noting “Systems and connections fail and you need to be prepared for the worst“.
2. Preparation and Format of Presentations
- Alison Moser, Head of Business Development and PR at New York-based agency Forsman & Bodenfors, posits that the lack of in-person pitch meetings has placed more emphasis on the actual work that goes into the pitch presentation. In her words, “The work now truly has to speak for itself. It’s forced us to be more direct in our presentations and disciplined about their delivery”.
- Additionally, industry pundits assert that virtual pitches require a different kind of “theater“. Rob Schwartz, CEO TBWA/Chiat/Day New York, states, “Part of what clients are buying is the energy and enthusiasm of an agency. It takes a different kind of stagecraft to do it virtually”. This, Schwartz continues to note, requires the synthesis of the presentation to “make storytelling more like chapters“.
- Dennis Leonard, an Innovation Consultant for the Economic Development Partnership of Alabama (EDPA), proffers that virtual pitch presentation decks must be clear and understandable. He says, “You want the people you’re pitching to understand what your business is about, why they should invest in you and understand that their investment will lead to a return”.
- To this, UC Irvine’s Vasquez adds that the presentation deck should contain simple slides, without too much clutter or content. “Make sure there’s enough white space on each slide, and make the text large enough so audience members don’t have to read each slide furiously or squint during your pitch”, he advises.
3. Rehearsal and Timing of Presentations
- Luis Vasquez of UC Irvine advises that adequate practice or rehearsal is crucial to the success of any virtual pitch. He advises that presenters should practice until they know the script, and also practice adequately with the technology they are using. This, Vasquez asserts, will help them appear more confident. Leonard agrees, saying “If you’re going to give a presentation virtually, it’s even more important that you practice, practice, practice“.
- Alex Gordon from U-Group emphasizes the importance of rehearsing virtual pitches. She writes, “Plan to do more run-throughs with your team than you might for an in-person presentation. Not only does it take longer for everyone to feel comfortable with the technology, but you also want your team to be aware of what everyone ELSE on the team is planning to say”. This, she continues to add, will help the presentation edge forward in case of any mishaps or interruptions from any one member of the team.
- Ebiquity reiterates this, further adding that agencies should rehearse pitches “in real-time” to ensure that the right people are delivering the correct content and that the video conferencing software works as it ought to. Brant Pinvidic, regarded by Forbes as one of the top virtual trainers in the US, advises that practice will help ensure that virtual pitches are “rock-solid“.
- Ebiquity also adds that while virtual pitches should run on time, a more ideal scenario would be if virtual pitches were shorter than in-person pitches, advising about 25-40 minutes’ duration per pitch. According to Ebiquity, “It is better not to overstay your welcome“.
Quotes and opinions from top industry thought leaders about virtual pitches in the COVID era
Quotes and opinions from top industry thought leaders about virtual pitches in the COVID era have been clustered around the following thematic areas: the new normal, adoption and experience of virtual pitches in the COVID era, connection and chemistry, and opinion on the format and structure of the pitch deck presentation. These top leaders include CEOs, CMOs, CCOs, and Managing Directors, and have been drawn from agencies, clients/companies, and consultancies such as Ebiquity, R3, ID Comms Inc., Havas Creative Group, Jeffries Consulting, Joanne Davies Consulting, AAR Partners, Publicis Media, Dentsu X, VCCP, Curiosity, among many others.
1. The New Normal- “Phygital” Pitching
- Ebiquity’s guide to virtual pitching proposes that the new normal for pitching post-COVID will be a hybrid the report dubbed the “phygital future“, where the best from pre-pandemic pitching will be merged with the best that has emerged from virtual pitching necessitated by COVID.
- Jodie Stranger, Chief Global Growth Officer at Publicis Media opined as follows, “Moving forward, I think we will continue to see a blend of elements that have worked well in the past, combined with ones we have been forced to pivot to. For now, we focus our efforts on preparing our teams to deliver content in a virtual world in as personal way as possible, embracing the technology to our advantage to enable faster and more direct communication on a more regular basis than what would have occurred when relying exclusively on setting up live meetings”.
- From a client’s perspective, Ebiquity quotes Vincent The, Digital, Strategy & Insights Director at Danone Specialized Nutrition, on his thoughts about how virtual pitches have affected the evaluation of agency pitches. He notes, “Collectively, we applied all the successful principles of an in-person pitch to the virtual agency review. We were overwhelmed by the willingness of the agency partners to move into the virtual environment, be adaptable and flexible, as well as accommodate our needs and ways of working. Overall, it has been a really positive experience for all and we got a great outcome from the review. There are some aspects, without doubt, we’ll be taking forward into the future, too“.
2. Adoption and Experience with Virtual Pitches
- Ebuiquity’s guide goes on to capture different perceptions from industry leaders concerning virtual pitches. For instance, Tina Fegent, an independent Marketing Procurement Consultant, registers her surprise about how much time has been created for virtual pitches. To quote, “I’ve been impressed with how much time senior, influential people both client and agency side have made available for pitches during the pandemic. I’d characterize virtual pitches under lock-down as better value, more engaged, and quicker. In the pitches I’ve been involved in since lock-down, we’ve had all the commercial discussions and negotiations covering fees and the contract terms before the final pitch”.
- VCCP’s Group Chief Marketing Officer, Stephanie Brimacombe, echoes Fegent’s sentiments, noting that the pandemic has made senior executives create more time for virtual pitches. In her words, “In the busyness of the day-to-day before 2020, clients often found it challenging to prioritize these important decisions. Under lock-down, more senior members of the team had more time to think about them and with more clarity than before”.
- Kim Berkin, Client Managing Director with Dentsu X talks of Dentsu’s experience with virtual pitches. She reports, “What has worked well for us is being brave and not being afraid of allowing calculated elements of uncertainty into the process. We have had success thinking creatively about getting genuine engagement; not using PowerPoint at all, sending reading materials in advance, creating a second screen experience to share additional content, even letting the clients dictate their way through the presentation choosing what to hear, when. We will take these adaptations into 2021 and beyond.”
- Howie Kleinberg, President of New York-based agency Glow, notes that virtual pitches have become the “ultimate icebreaker” as the hardships everyone is dealing with at home have been an equalizer, surmising that “nobody’s riding first class in these pitches”.
3. Connection and Chemistry
- Chemistry, or lack thereof, has been cited as one of the cons of virtual pitches. VSSP’s Brimacombe posits that virtual pitches have taken chemistry out of pitching saying, “Everyone’s had to adapt and find new ways of working, and although pitching virtually has taken the chemistry from the process, it’s also humanized it too. We’ve all had to learn how to improvise”.
- Mary Bond, head of EU Media at Bethesda Softworks, agrees saying “Of course, you miss out on human interaction by running pitches virtually. Because our team is so big, we were all on mute, and there was much less discussion of ideas than in person”.
- A few thought leaders have argued, however, that chemistry can still be experienced in virtual pitches. Greg Paull, Founder and Principal at R3 WorldWide, asserts that chemistry is a “natural authentic process‘ and the best teams display it, “whether it is face to face or over video calls”. This sentiment is echoed by Tom Denford, CEO of ID Comms, who asserts that “chemistry and empathy can still exist, whatever the channel of communication”.
- According to Havas Creative Group’s CMO, Tracy Barber, chemistry is created by a team, thus agencies must ensure that they have the best teams in place for pitches, whether virtually or in-person. She attributes Havas’ pitching success to the chemistry of its teams and Havas’ value of partnership over proposals.
- Joanne Davies of Joanne Davis Consulting agrees noting that it is possible to have better chemistry over the phone and video than in person. She advises agencies to “bring chemistry to your voice and use dimension”. She also posits that it only takes a couple of minutes to establish confidence in an agency, thus imploring agencies to use the first couple minutes of their pitch “wisely“.
4. Preparation and Format of Presentation
- Ashley Walters, Chief Development Officer at agency firm Curiosity, advises agencies preparing virtual pitches to “focus on what is important“. While before Curiosity would have a brainstorming session, Walters now reports the following, “That’s what’s had to change for us is we’ve really had to focus on what is most important, what’s going to get to the business solution the fastest“.
- Howie Kleinberg of Glow narrates how his agency had to cut a pitch deck from 50-60 slides to 11 slides for virtual pitches. Kleinberg asserts that he wants to continue doing this post-pandemic, noting, “The processes have changed the concept of alleviating moving parts so something doesn’t go wrong. Sounds to me like that’s situation-agnostic.”
- Lisa Colantuono, President of AAR Partners, advises that agencies preparing for virtual pitches ought to “rethink video capabilities” to create engagement and ensure that enthusiastic employees are at the center of the presentation, who are not only passionate about the brand and their assignment, but also those able to show their personalities.
- Daniel Jeffries of Jeffries Consulting also notes that virtual pitches ought to be succinct, clear, with the presentation well-rehearsed and tested. When it comes to testing the speakers or presenters of the pitch, Jeffries also proffers that agencies should “ditch the speakers who are not clear as there is nothing worse than mumbling to lose the client’s interest“.