4 signs you need to fix your agency relations

Marketing Magazine’s The Futurist Live! was kickstarted by a high-power debate on the topic: Is the client-agency model dysfunctional?Speaking for the motion was Richard Bleasdale, regional managing partner, APAC, Roth Observatory International and against the motion was Vernon Vasu, former director of corporate marketing and communications - Health Promotion Board.Whilst Bleasdale argued that drastic changes need to take place in order for the industry to be future-ready, Vasu painted a much more optimistic picture saying minor tweaks are all that is needed for the industry to move forward.Moderated by Taru Jain, founder at Maxential, the debate touched on key areas of client-agency ties such as remuneration and talent management.Here is an excerpt of the debate:Taru: Welcome to the debate Richard and Vernon. Would you say the house is on fire, that our industry is completely dysfunctional?Richard: A resounding yes. How many of you are ‘completely satisfied’ with the quality of work you and your agency is producing? (Asking the audience). We can see that a vast majority of you are dissatisfied with the quality of work you and your agency are producing. The critical issue here is the working relationship between client and agency.Vernon: You can’t do a snap poll and consider these results final. What creative person or a marketer is “completely satisfied”? I think it is the hardest motion to oppose because some of it is true, I agree. But the problem is not endemic. It occasionally happens because relationships occasionally break down. Now, I’ll tell you what Cosmopolitan (magazine) says about relationship break downs (laughter).Failure to communicateYou are boredYou pick fightsYou avoid future plans.Taru: Thanks Vernon. Now let’s agree therefore, that there are some changes needed. If you are given a chance to re-architect the model, would you make wholesale changes or small tweaks?Richard: The changes have to be fundamental. In this age of real-time marketing, brands are travelling with the customer throughout the journey and everything is measurable. Most of you have too much data and there is a massive pressure to deliver ROI and that pressure is driving caution. It’s not driving experimentation and marketers are pulling back from taking risks.CMO tenure is about only two years globally, and research into marketing projects isn’t positive either. Around 50% of marketing projects are costing double than what was actually projected and 85% of marketing projects are over-budget and delivered late. And nearly 30% of marketing projects are cancelled before completion.On the agency side, standard agency contracts over 20 years have dropped to an average of about two years from seven years. Agency hourly rates over the last 10 years have dropped to about 20%. Agency income per work unit has seen a 40% decrease. This, on top of major issues such holding onto the right talent.So all key drivers are changing and we have to bring a fundamental change.Vernon: It’s very easy to take stats such as those that you have mentioned and cast the light on our industry as being sick. I would challenge you to take those stats and correlate them to any professional services industry. The results will be similar. I think there are structural issues but as an industry we look at problems differently. We are working towards these issues. The problem is that as we achieve a goal, the goal-post has moved due to some innovation or other and we have to revitalise ourselves again.Taru: So on one hand we see there are enough stats to support big change. On the other hand Vernon, you are agreeing in part but also saying, let’s not hide behind the numbers as every professional services is bound to go through this cycle.Read the full transcription of the debate in Marketing’s special edition The Futurist next month.