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Will the market see more digital AORs?

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Despite digital taking the lead in marketing campaigns, digital AORs in Singapore is still not commonplace unlike creative, media or PR. Why, Marketing quizzed experts?Unilever for instance, is driving digital with a roster of agencies and Rahul Welde, vice president, Media, Unilever - Asia, Africa, Middle East, Turkey and Russia says, since this is a nascent space, the roster agencies are still in the process of strengthening ops and inducting better talent on board.Given the fact that the scope of digital has increased immensely covering a broad spectrum of social, mobile, search, CRM, e-commerce apart from the basic aspect of website development and management, Welde feels the key challenge and opportunity lies in harnessing the expertise and creativity to leverage the rapid transformation that is taking place.The retainer/project basis divide is also a result of how digital evolved historically. The traditional business was mainly built on commission, retained production and co-ordination.The digital marketing space started on man-hours and accountability towards delivering measurable results. On top of that, agencies had to fight tooth and nail for the 3%-5%, or lesser than that, of the overall campaign budgets.While there has been a change in the client's mindset over the years as they are increasingly getting comfortable with retainers, the true tipping point will have to come from the digital agencies, says Paul Soon, regional director at XM-Asia."Many saw digital agencies as being less strategic. Ten years on, digital agencies now sit at the same table as our esteemed colleagues in traditional and media agencies; it is really in the hands of digital agencies to prove that we are worthy," Soon says.XM, over four years, has seen its business move from 15% on retainer to 40%. For other agencies such as Blue, the ratio of AOR to project based work is approximately 60:40.The benefits of retainer relationships for the clients are that they help both client and the agency plan ahead and ensure staffing levels and key personnel on their business. However, the presupposition that project-based relationships are somehow bad for agencies is stretching it a bit too far, says Thomas Mouritzen, MD, OgilvyOne Singapore.According to him, in many ways project-based relationships have advantages providing there is proper planning and dialogue."For the agency they can plan to utilise resources better, aligning the best resources to the different types of projects across clients and scope can often be more clearly managed," he says highlighting that across all areas many clients are in fact going for a mixed model of retainer and project based.Ogilvy sees the need for full project -based model while building bigger applications where different phases of the project require different resource needs and the project may finish after 3-6 months. For this type of task it does project-based costing with clearly defined milestones.However, on the split between retainers vs. project-based work Mouritzen says the main concern for Ogilvy is what percentage of its client relationships are long term contractual partnerships, where it can build a deep knowledge of the clients' businesses and work towards common goals."This would cover 95% of our relationships, basically apart from some very new relationships. This is the kind of relationship we aim to have with all our clients," he adds.Once the role of digital is defined by brands and agencies, a retained relationship will naturally happen. "Especially with the growth of social media marketing," Soon says.

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