When did Agencies and Vendors become banks for their Clients?

Posted on October 7, 2019February 10, 2021 by Bajkowski + Partners

Increased pressure from brands on their agencies and vendors to extend payment windows is greater than ever

Mega brands such as General Mills and Chrysler are seemingly throwing their weight around, conducting agency searches of which agency payment terms have reached a new low – or should we say high?

General Mills’ recent creative agency review reportedly demanded a payment window of 120 days. And according to a post on Digiday, “Chrysler succeeded in pushing its payment window to 180 days last fall…And around the same time…a big brand started asking for payment terms of a full year, according to the 4As, which received complaints from creative and media agencies about the terms.”

The client in that latter situation asked agencies to “work out a deal where on paper it looked as if the agencies had agreed to payment terms of one year”. Often this results in having agencies and vendors pre-bill far in advance and reconcile later.

So in reality, cash-flow management has not improved.

At least that’s what occurs with some of our clients and agencies, whether we’re handling a search or modernizing their agency contracts that have to include such burdensome corporate-wide payment windows that go beyond a 30-day period.

The Digiday article further reveals that marketers requiring these abnormally long payment periods assume agencies will get financing to cover the widening payment to expense gap.

Yet the client won’t pay the financing fees.

Clients should realize that such demands, if an agency acquiesces, can become part of the agency overhead – so you’re still paying the finance charges.

Equally troublesome is the use of third-party invoice processing systems that charge agencies for every invoice that is submitted – non-reimbursable of course.

Agencies are in the business of driving brand revenue through their communications expertise, not money-lenders to clients.

Wonder if client-side staff would be okay with being paid 120 days out.

Definitely not.

Is this what clients really mean by wanting agencies to be their partners?

Probably not.

Yet here we have another strain on client-agency relationships.

Agencies Need to Make a Better Case

Posted on October 4, 2019February 10, 2021 by Bajkowski + Partners

Show your case studies and capabilities – don’t phone it in

So, you finally got that elusive call with an agency search consultant. Or, better yet, someone at the client. But, you didn’t host the call on an online conferencing service?

That’s a missed opportunity given today’s technology.

And a 5-page deck is all you need to:

Show you researched the brand or search consultant
List your capabilities on one page and let the conversation steer the drill-down
Show 2-3 of your best case studies – one page each with creative links

That’s it. Not complicated.

So why do so many ad agencies try to “talk” their capabilities and case studies at their audience over the phone?

As a result, you won’t keep your audience engaged nor leverage the impact of visuals to make a lasting impression.

Granted, technology can let us down at times. So you may want to send that deck just before the call.

But to get the most out of the short call, try to leverage online conferencing services and present a quick deck!

Bajkowski + Partners is a global consultancy with practices in Agency Search and Selection Management, Agency Performance and Relationship Management, Marketing Organization and Optimization, and Brand and Marcomm Management.

Do Consultancies Have an Unfair Competitive Advantage Over Agencies?

Posted on July 9, 2019February 10, 2021 by Bajkowski + Partners

In a July 3, 2019, commentary on Media Post, staff writer Richard Whitman raised the question of whether consultancies – Accenture in particular – were more conflicted than holding companies.

While some agencies have on occasion refused to participate in agency searches that included agencies held by the client’s auditors, WPP has reportedly declined to participate in Accenture-managed agency searches.

Accenture, as well as a few other consultancies, still provide brands with consulting services which range from in-depth audits of client’s agency contracts, pricing, scopes and processes to managing agency searches (which also gives them detailed access to confidential proposals from participating agencies) and realigning agency rosters. And now of course they all hold a number of advertising agencies and related service providers.

As agency search consultants, we have argued over the years that there is indeed a far bigger conflict of interest than agencies within a holding company offering work to competing brands.

In the case of the latter, most agencies within holding companies don’t talk to each other – nor do agencies within a network of offices unless they share an account. This is not as true, however, of media agencies despite the claims of “fire walls,” but that’s a topic for another time.

However, the conflict for consultancies, in our opinion, could rise to unfair competitive advantages over the holding companies and their agencies – whether leading a client audit or managing an agency search, they do indeed receive detailed information that agencies have provided to clients in the form of proposals, contracts, scopes, staffing plans, pricing, and reconciliations.

Despite receiving assurances that there are strict safeguards between the consulting practice and the agency practice, we’ve had a few former new business leaders from consultancies who are now at holding company digital agencies tell us that the consulting team from their former employer did indeed share such confidential information with its agency new business developers.

While this is all hearsay, it’s definitely something the 4A’s and their member agencies should investigate and develop explicit clauses in their client contracts to prevent any unfair competitive advantages by consultancies.

For the ANA, with all its efforts around media and production issues, they should also be developing standards of client ethics around agency audits and procurement to ensure unfair competitive advantages for consultancies are avoided.

And, maybe, the DOJ needs get involved in this issue as well.

Bajkowski + Partners LLC is a leading consultancy providing services to marketing and procurement teams in the areas of agency relationship management, agency search, process audits, contract and SOW development and audits, and other marketing operations related areas. For more information, please visit our website.

Agency Search: MedStar Health Selects Doner as AOR

Posted on July 15, 2018February 10, 2021 by Bajkowski + Partners

From AdAge by Megan Graham on July 13, 2018: “MedStar Health, a healthcare provider in the Maryland and D.C. region, has picked MDC Partners’ Doner as its agency of record. The agency will oversee strategy, creative and production for the provider, which has 10 hospitals, a home health agency and more than 300 urgent care, physician practice and other care sites. The company previously worked with AB&C Creative Intelligence. Bajkowski & Partners led the search.”