Blog

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                    [post_content] => HossA couple of months ago, the 4A’s and ANA released a joint report from their Agency Search Simplification Initiative. It contained results from a survey of 100 agency leaders and 41 clients about priority concerns in new business pitching. The report revealed some significant areas of misalignment between brands and agencies, which are ripe for improvement.

We spoke with 4A’s svp of business intelligence & insight, Matt Kasindorf, to learn more about the report’s findings and other agency new business trends. Read on for excerpts of our discussion on budget disclosure in searches, IP ownership, spec work, misalignment between procurement and marketing, and the latest new business challenges.
The 4A’s and ANA Agency Search Simplification Initiative
According to Kasindorf, the motivation for the Agency Search Simplification report is to elevate mutual understanding. He says, "when you don't understand another person's view and perspective, you can never come to an agreement. Once you understand the motivation, it is far easier to have a discussion where you are removing barriers instead of creating them."

Additionally, the research between the 4A's and ANA "was never meant to be a one and done," says Kasindorf. There are plans to launch a client-agency relationship forum in 2023 specifically designed to keep these important conversations going. The Agency Search Simplification report is meant, he says, "to be the start of ongoing conversations that will better the efficiency, productivity, and effectiveness of agency reviews, and therefore agency-client relationships."

As Kasindorf explains, great relationships increase the likelihood of great work and, with it, the probability of a positive impact on the client's business. Which is what agencies and clients are really here for. So, he says, "we need to reclaim the focus and get back to the most important question, which is, 'how are we driving business results for you?'"
Insights from the Report
Budget disclosure for agency searches
According to the 4A's/ANA report, 98% of agencies said it's valuable to know the size of the account, but only 61% of marketers said providing the budget is valuable to the process.

When asked why so many clients don't seem to understand the importance of budget disclosure for agencies, Kasindorf shared what he's learned about the marketers' perspective. "While often it may be due to corporate policy, there are two other aspects to it. The first is that some clients think an agency will pitch to the budget. They are concerned that once a number is given, it will automatically become the proposed budget instead of the agency giving them options at lower costs. Secondly, there are some cases where marketers don't know how much things cost or what they should spend."

For their part, Kasindorf says, agencies today are "focused on what they need to do to solve the client's business problem."

Without knowing the budget, says Kasindorf, "you can't know the kind of resources you need or what solutions you can offer," making it a real challenge for agencies. He adds, "not knowing the budget also makes it difficult for the agency to know if the client is a good fit and what internal resources it can commit to the review process."

Kasindorf notes that an increasing number of agencies are refusing to participate in a search if the budget is not disclosed. It requires too many resources on their part for the end goal to be a question mark. They need to know if it's something they can deliver on if chosen and if it's worth their time to pursue.

One solution that can work for both parties, Kasindorf says, is for clients to disclose a budget range. That can allow the agency to step back and consider:

 	
If they believe they can solve the client’s problem for that amount of money.
 	
Whether they want to pursue the business.
 	
The opportunity to provide different budget options to the client.

Agencies and brands still out of sync on IP
According to the Agency Search Simplification Initiative’s report, more than 80% of agencies find it painful when brands require ownership of the work created during the pitch process. For their part, more than half of brands do not find it valuable to the search process to allow agencies to retain IP.

This year, Adweek reported agencies pitching without retaining IP is on the decline, as "heads of new business indicated their agencies won't agree to pitch without signing an agreement to own their work – or at least get paid a fair price for it."

When asked why IP ownership for work created in a review continues to be such a sticking point, Kasindorf refers to report findings and what he's heard from marketers. Their concerns include the following:

 	
Seeing very similar work from multiple agencies makes it hard to give any single agency credit.
 	
Seeing work done for their brand go to a competitor.
 	
Feeling a sense of ownership around the work produced due to the time they spent crafting a detailed strategy and brief.

 

On the agency side, a big concern is that clients will demand to own the work, then not hire the agency, and end up producing the work on their own or with a lower-priced agency. Kasindorf notes that while this “does not happen often, when it does, it’s shameful.”

One potential solution to this long-standing sticking point, Kasindorf says, might be a "temporary embargo." While the agency would retain ownership of its IP, it might agree to the work being embargoed for a period, giving the brand some peace of mind that the work won't show up elsewhere next month. While not a perfect solution, this compromise could leave each party reasonably satisfied.
Spec work on the decline?
Kasindorf reports that the 4A's are seeing an uptick in reviews without the requirement for spec work. While some agencies are pleased with that — because it means less demand on their resources — other agencies are not so happy. Those agencies feel very strongly that the spec work helps them win business.

When asked whether those agencies couldn't 'go the extra mile' and still provide spec work if they felt so strongly about it, Kasindorf replied that it "opens the door to another uncomfortable issue for agencies." For example, "what happens if the marketer says they don't want spec work but ultimately chooses an agency because they did spec work anyway, thus 'demonstrating more passion for their business'? Is that fair to the other competing agencies?"

Kasindorf presents another potential outcome for consideration: "if the marketer made it clear that they don't want spec work and an agency does it anyway, maybe they should be told 'you broke the rules, and you're out.' It would be a drastic measure, and we may not ever get there," Kasindorf says, "but having clarity upfront helps make it easier for agencies to decide if they want to participate and helps avoid surprises at the end."
In the Agency Search Simplification Initiative’s report, 100% of agencies and brands agree that what agencies are being judged on should be clearly communicated. Additionally, more than half of brands find it painful when agencies go “off book” and deviate from the pitch guidelines.
 

A recent ANA study revealed just 15% of agencies consider their relationship with marketing procurement to be “extremely or very healthy.”

In a previous conversation, Kasindorf mentioned that "marketing and procurement face fundamental challenges to alignment because their goals are often at odds. Procurement generally aims to generate savings, while marketing aims to generate growth." We asked him to speak about that further.

Historically, procurement's purpose was to source materials and components directly, Kasindorf explains. "The goal was most often lower cost, comparable quality. So once you meet certain standards, then price becomes a factor. And in that sphere, it was very effective."

However, Kasindorf continues, these "legacy procurement objectives and protocols are not a good fit for professional services — agencies in particular — because the differences in quality, pricing, and output are much greater." Forcing agencies into a process designed for a very different purpose "is not how an agency is going to succeed and may not even be how the internal marketing team is going to succeed," Kasindorf says.

While traditionally, procurement's goal is to generate savings, marketing's goal "is to drive value; whether through incremental sales, incremental awareness, or incremental clicks. It's about bringing additional value to the client's organization through marketing activities," explains Kasindorf.
And the conflict "really stems from how people are compensated," he continues. "You have to look at how they earn their bonus. So marketing may be incentivized to increase share or awareness by X amount, while procurement is likely awarded a bonus by reducing costs year over year. Those goals are often fundamentally at odds." And navigating these two teams' oppositional goals puts agencies in a no-win situation.
The fix for that, which the ANA and the 4A's are "very much in agreement" on, Kasindorf says, is "internal alignment on the client's side. Marketing and procurement must come together to engage with an agency through a singular voice."
In the Agency Search Simplification Initiative’s report, 92% of agencies and brands said it was valuable for procurement and client marketing teams to agree in advance on the criteria for an agency’s success.
 

Kasindorf is quick to point out that while this misalignment tends to happen at organizations with a "legacy procurement process" in place, there are also "many outstanding marketing procurement professionals who are taking a different approach, and they 'get it.'"
How can agencies tell if marketing and procurement are aligned?
There aren't any tips or tricks for this one, says Kasindorf. You just have to ask the question and trust they will be upfront about it. For example, he suggests asking the marketing team, "Is your procurement department involved in this review? Do they agree with the objectives outlined in your brief?"

Kasindorf notes that the 4A's are working with the ANA on additional initiatives surrounding procurement, which will "hopefully help procurement professionals understand agencies' value and think about advertising and marketing as an investment instead of a cost. If we can make that change and evolve how procurement perceives advertising and marketing, it will make things a lot easier," he says.

Kasindorf also references important work done by the World Federation of Advertisers (WFA) through the Project Spring Initiative, which published a report on transforming marketing procurement in 2020.
Other current new business challenges for agencies
We asked Kasindorf what other new business challenges he’s heard about from agencies. He shared two with us.

The first is that "some clients are requiring their existing agencies to go through the whole RFI/RFP process to get an additional piece of business from them." While Kasindorf doesn't know what's driving that, it's something the 4A's are hearing about more often.

It's "a shame," he says. "If you have a good client relationship and the client trusts the agency, why wouldn't you have a conversation with your agency and say, 'hey, we've got this new issue, we've got a new product, whatever it is…a new vertical we need to go after.' It seems to me you'd have that conversation first with your trusted agency partner."

Secondly, Kasindorf reports they've heard that many reviews are still long and drawn out, with moving targets and increasingly smaller prizes. "Even with the smaller prize size," he says, "the process can be equally as difficult as a huge review." And you may be told you're going to the finals, given a date for the finals. Then you complete the process, he explains, "only for the client to say, 'hey listen, we've got a couple of other stakeholders you're going to have to do another presentation to.'”

There is a resource cost to that for agencies and an emotional cost, says Kasindorf. "Because you think you're done; like 'I passed my final exam,' and then you're hit with 'oh, actually… there's another final exam you've got to take.'"

Editor’s note: Comments from Matt Kasindorf’s interview have been edited for length and clarity.
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                    [post_content] => There were quite a few studies published recently about the outlook for agencies, and last week it seemed like the industry publications ran with them all at once. I may have read one too many negative projections, and the cumulative effect was a little deflating. And it could be just a coincidence, but conversations and opportunities seemed to become more hesitant, too.

There are a couple of things to address here. As always, where are the opportunities for agencies in all of this? But of equal importance, particularly following last week’s flurry of conflicting projections, is the media’s influence on the overwhelming mood — and why we should exercise caution.
The power of a word
The reality is that when multiple negative stories get published at once, they can impact mood, beliefs, and behavior. Thankfully, we have many worthy journalists in adland who provide balanced news coverage. But sometimes, it’s not just about balance within a single article. Sometimes it’s about the volume of stories and their net impact.

Research has found* that negative news leads to more pessimism. Interestingly, the reverse is not equally true. Positive news does not cause the same degree of optimism among the public.

Researchers have also found that public economic pessimism can cause more negative media coverage. And that economic news can itself have an impact on the economy. Specifically, journalists in the UK and US “writing about the possibility of recession—even in times of economic growth—make the occurrence of an actual recession more likely.”** Talk about messy!

It means we all need to exercise caution when discussing the future outlook for ad agencies. Words are powerful and can manifest positive or negative outcomes. If they can influence the economy, they can influence marketers’ budgets and spending decisions.

At TDP, we always strive to balance realism and concern with proactivity and persistence. Challenges mean opportunities. Advertising isn’t going anywhere.

Agency leaders’ critical thinking skills will serve them well at times like these. Not only due to writer or publication bias but even when it comes to reported data.

Earlier this year, I called out research that appeared to over-report pessimism because of the survey design. Sure enough, more reporters latched on and were writing about people’s rising pessimism when what we were seeing was probably better stated as “cautious,” “anxious,” or “proactive,” all of which have less negative connotations.

On the flip side, earlier this month, the ANA published a surprisingly hopeful article with the promising implication that brands are seeking more creative services. It cited a “surge in ad account reviews” (referencing a mid-2021 article) and a survey that found “about one-third of US brands in 2021 said they were contemplating changing their ad agency within the next six months.” Who believes that would still hold true after the 2022 we’ve experienced? A 2021 survey is already obsolete.

Additionally, just about any comparative data right now should be interpreted carefully. We are still coming out of an atypical period, and situations are evolving rapidly. In recent years we’ve seen some growth reflective of catch-up activity to compensate for pauses during the pandemic. And numerous stops and starts along the way. Insider Intelligence analyst Paul Verna referenced this phenomenon on a recent podcast. So when we see headlines about X% increase or decrease, we must carefully unpack what those figures actually represent.
Back to these trends: what’s the real story?
Recently published reports and data sources include LinkedIn’s global B2B Marketer Sentiment study (via WARC), a MediaPost analysis of Standard Media Index data (via Insider Intelligence), a poll by the UK-based Alliance of Independent Agencies (via Campaign), the UK-based IPA’s quarterly Bellwether report (in The Drum), Campaign and R3’s CMO Outlook Survey, research from the WFA and Ebiquity (in Adweek), and Digiday’s 2022 Media Agency Report.

What stands out the most for me in recent coverage is that there is not one overarching story but multiple things happening simultaneously. That’s as true for advertising budgets as it is for the economy. We are seeing a lot of conflicting and contradictory indicators. For example, some marketers expect to cut their budgets, but equal amounts expect to grow them.

Everyone seems to be experiencing some anxiety and pressure, but the degree to which they feel it varies, perhaps based on their industry vertical or geographic location. It may be influenced by their business circumstances or even their comfort level with uncertainty and change.

As expected, some marketers plan to invest more heavily in short-term (performance) marketing initiatives versus longer-term (brand) marketing. But there is also a greater understanding of brand marketing’s value (LinkedIn research, via WARC). And more budgets are moving into digital versus offline channels.

The trades reported what they've seen and heard, and some of it is relatively predictable. For example, smaller businesses feel the impacts of budget constrictions more than larger ones (Digiday), and some industries (like automobiles and CPG) feel more pain than others (Digiday).

One thing to keep in mind is that trade publications and research coming out of the UK may be less applicable to us in the US right now. According to research, the current outlook is better for us here than for our friends in the UK, where just 56% of B2B marketers indicated they felt positively about their plans (vs. 91% in the US) (LinkedIn research, via WARC). The IPA’s latest Bellweather report further reinforced the air of pessimism among British companies regarding their financial prospects.
Bright spots and opportunities for agencies
Things are far from doom and gloom. Agency leaders who pay attention to trends and take steps accordingly are more likely to keep it that way.

Let's explore where you may be more likely to find opportunities in 2023.
Brands expect to spend more in the following channels:

 	
Retail media (projected to see more double-digit growth, via Insider Intelligence).
 	
Connected TV (also projected to see double-digit growth, via Insider Intelligence).
 	
Anything related to the World Cup and upcoming elections (Digiday’s 2022 Media Agency Report).
 	
Digital display/websites and social media are the top two media channels targeted for spending increases in 2022 and 2023 (Digiday’s 2022 Media Agency Report).

 
Positive takeaways from the latest reports:

 	
67% of senior B2B marketers plan to maintain or increase their spend on brand building over the next six months (LinkedIn’s global B2B Marketer Sentiment study).


 	
76% of senior B2B marketers remain optimistic about their marketing strategy over the next six months (LinkedIn’s global B2B Marketer Sentiment study).


 	
About 75% of CMOs expect to increase their digital retail media budget in the coming year (Campaign and R3’s CMO Outlook survey).


 	
Agency respondents said clients thus far have been nearly equally divided on whether to increase, decrease or keep budgets the same in 2022. In all, the results trended slightly toward cautious optimism (Digiday’s 2022 Media Agency Report).


 	
Media agencies are optimistic about their spending in 2023. 49% of survey respondents said they expect budgets to increase next year (Digiday’s 2022 Media Agency Report).

3 things you can do for new business now
We can’t be certain what tomorrow holds, nor can we control external forces. But we can be sure that we will still need to work! To do that, we need to be proactive about servicing current accounts — and generating agency new business.

Here are three specific things you can do to support agency new business right now:

 	
Continue building relationships, having conversations, and doing new business outreach. It doesn’t matter if things are paused for now; it’s an investment in your pipeline for future new business. A year from now, future you will thank you.


 	
Pay attention to the industries and channels where brands are spending. It may mean evolving your approach, from how you talk about your agency and its services to how you hire and train your team.


 	
Stay focused on talking about and delivering proof of ROI and business value. That should be baked into your process, from outreach messaging to contract negotiation and customer relationships.

 

That’s all I have today. I hope it was helpful.

*See page six of this 2018 literature review on the effects of how the media covers the economy in Sociology Compass by Damstra, Boukes, and Vliegenthart. They cite many sources.
**Ibid; see pages seven and eight.
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                    [post_content] => There were so many important things to discuss this week that we couldn't pick just one. Instead, we're trying something a little different, focusing on the top five things that moved us this week—and all are valuable for agency leaders to know.

Read on to explore what's new for in-housing, winning new business without pitching, creative effectiveness, treating people decently, and new business insights from global consultancy R3. As always, you'll find our insights layered in to address what it means for agencies.

In-housing fails
Over at The Drum, Sam Bradley covered a new small study on in-housing conducted by digital agency Collective. 150 chief marketing officers at companies with more than 250 employees participated. The study revealed that CMOs are disillusioned with in-housing.

33% of CMOs at mid-size companies (with 500 employees or less) say in-housing is an operational/managerial nightmare. Over 50% of CMOs at enterprise organizations (with 2,000 or more employees) agree it's a nightmare. And 39% of CMOS think in-house marketing teams lack inspiration.

Despite its limitations, the study delivered some satisfaction for many agencies who have been waiting for the pendulum to swing back in their direction. (Should you want to bask for a moment in the petty glory of marketers’ in-housing challenges, we won’t judge.)

But is in-housing going anywhere? Don’t count on it. Instead, expect an ongoing evolution of how in-house teams and agencies work together.

Need convincing? In a recent presentation to the 4A’s, global consultancy R3 suggested that agencies build “use case experience” from working with clients’ in-house teams and be willing “to implant agency talent within client teams.”
Winning without pitching
The traditional agency review and pitch process have long been out of control in terms of costs and value to agencies. For most agencies, in most cases, it's preferable to avoid the costs of pitching by leveraging a project into an opportunity for growth.

Jameson Fleming recently covered a series of notable wins by The Martin Agency in Adweek: Royal Caribbean, Santander, and LegalShield—all won without pitching. Between those wins and other new work for Google Creators and Hasbro brands, The Martin Agency has brought in about $20 million in new revenue outside of a full formal pitch.

How are they able to pull this off? First, The Martin Agency and its CEO, Kristen Cavallo, have enjoyed significant positive press and accolades based on recognition for their creative work and organizational culture. But what Fleming specifically calls out is their leadership’s ability to maintain relationships with past clients (both of The Martin Agency and from prior agency roles).

At the same time, he notes that they’ve been selective in the accounts they pitch. That’s an important point. Because had they not been as selective about pitches, The Martin Agency would have had fewer resources available to invest in developing and maintaining their prior relationships.

Could this approach work for you? Yes. Will it work as well for you as it did for The Martin Agency? Probably not, because you’re (most likely) not The Martin Agency. But you can find the right balance of new business strategies for your agency and ensure you are allocating enough resources to cultivate relationships effectively.


 
Let’s talk about creative effectiveness
At TDP, we’re gung-ho about creative effectiveness because it leads to the measurable results needed to win new business. There have been two noteworthy pieces of content recently on the topic. One explores whether awards juries are rewarding work in a way that furthers the disconnect between creativity and brand performance. There are a lot of layers to unpack in that discussion, and Gurjit Degun does so with skill.

For example, why is most creatively effective work misaligned with the work recognized by creative awards? And perhaps most importantly, how can we get back to valuing work that drives business impact, particularly as we enter an economically challenging year where clients will be focused on bottom-line impact? Read Degun’s coverage at Campaign UK to see what industry insiders say about it.

Second, the IPA published its Marketing Effectiveness Roadmap 2022. Their research "revalidated that having an effectiveness roadmap is a key component of creating a strong(er) marketing effectiveness culture." Specifically, the roadmap helps create a more balanced approach to value creation within brands and agencies.
“When a roadmap is present, brands are 41% more likely to believe that their organization balances the long and short term and 71% more likely to believe long term brand effects are crucial.” — IPA’s Marketing Effectiveness Roadmap 2022
 

Despite the potential benefits, 26% of brand respondents and 37% of agency respondents reported that their brand or agency still lacks an effectiveness roadmap.

The IPA also found that priority areas of improvement for agencies in the next 12 months include:

 	
Helping clients understand that the agency is a creator of value rather than a cost to brands


 	
Not allowing effectiveness to be siloed within planning, analytics or other departments


 	
Facing their biggest effectiveness challenge: the perceived lack of data sharing from and with agency clients (and clients’ other agencies)

 

TIP: Learn more about the real-world implications of creative effectiveness for marketers and their agencies (and see how it can be used to your advantage) from LIONS, WARC and the Effectiveness Partnership here.

We’re not nice 
There’s no point in mincing words. As layoffs continue across the advertising industry amid economic challenges, new data reveals the ad industry is also the worst at handling layoffs.

AdAge covered a recent study from employer review site JobSage which found the advertising and media industry is among the least compassionate when it comes to layoffs. JobSage surveyed 1,000 U.S. employees who had been laid off across 11 different industries.

Respondents were most likely to report poor treatment when being laid off from employers in advertising and media compared to other industries. 83% of workers laid off from advertising and media employers reported “callous treatment,” compared to an overall average of 65% of respondents who felt that way across industries.

Those laid off from advertising and media employers were less likely to be offered a severance package and more likely to receive no advance warning. In this group, nearly half reported they “did not feel cared for at all” when being informed of their layoff, compared to just 35% of respondents overall. Almost half of this group were laid off via phone calls, email, messaging apps, or virtual meetings (either group or individual). And 20% of them reported they never had the opportunity to ask questions or discuss their layoff.

It sounds like advertising has earned its title of “worst” at layoffs. The upside is there’s a lot of room for improvement. If you are committed to treating your people better, see this post from AdAge, which provides tips on respectfully conducting layoffs.

Speaking of treating people better…
Kimeko McCoy’s article about Mojo Supermarkets’ founder Mo Said in Digiday is worth a read simply because it’s a feel-good story about a talented creative succeeding for all the right reasons. But it also illuminates Mo’s experience as a Pakistani-bred creative who felt like he had to play a character, leaving his accent, his name, and his whole self at home just to blend into the predominantly white ad industry. He describes how it broke his personality and launched him into depression.

As the ad industry talks about commitment to employee well-being, DE&I, and talent retention, agency leaders should take Mo’s story to heart. Droga5 lost Said and his talents—but it could have happened to nearly any agency. The reasons why reinforce what we already know: adland must do better. Too much creative talent is lost to the industry because there isn't enough space for everyone to be successful and be themselves. Thankfully, Mo reclaimed himself and stuck around on his own terms.
Highlights from R3’s presentation to the 4A’s
Global consultancy R3 gave a presentation at the 4A’s National Committee Meeting for September. R3 advises brands on agency relationships and is a go-to data source for many respected industry publications (so consider this information both high-value and trustworthy). Here are just a few of the takeaways:

What’s driving agency reviews?

Agency reviews (while declining overall) are currently driven by a mix of factors, including a need to improve or build out with specialist agencies in areas like e-commerce and digital. Other motivating factors are client desire for greater control, better agency expertise, more alignment with ESG values, and cost concerns.

What are clients looking for from agency partners?

According to R3, what clients most want from agency partners now is collaboration, agile innovation, data capabilities, and applied DE&I.

Specifically, where DE&I is concerned, agencies need to be sure they are walking their talk across the board. That encompasses everything from talent diversity, training and employee well-being to supplier diversity programs, portrayal in communications and purpose-led marketing.

What’s the outlook for independents?

We will continue to see independent agencies working with big brands for reasons that include their ability to tap great creative talent virtually, the nature of project-based work, and the variety of agency relationships across individual brands. Additionally, independent agencies provide better access to leadership and senior-level creatives. More big brands have realized they prefer to work with the agency's A-team.

Here’s our take: Agencies of all sizes and types will continue to find new business opportunities—if they plan accordingly. By that, we mean not only getting fit for service across the elements and qualities clients are looking for but also having the flexibility to take on opportunities via projects and know how to grow them.

Projects are commonly pitted against retainers for comparison, but when we evaluate projects against agency reviews, they start to look a lot more favorable. Project work can be a money-generating and money-saving new business onramp for agencies.

That’s it for this week.

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            [post_content] => HossA couple of months ago, the 4A’s and ANA released a joint report from their Agency Search Simplification Initiative. It contained results from a survey of 100 agency leaders and 41 clients about priority concerns in new business pitching. The report revealed some significant areas of misalignment between brands and agencies, which are ripe for improvement.

We spoke with 4A’s svp of business intelligence & insight, Matt Kasindorf, to learn more about the report’s findings and other agency new business trends. Read on for excerpts of our discussion on budget disclosure in searches, IP ownership, spec work, misalignment between procurement and marketing, and the latest new business challenges.
The 4A’s and ANA Agency Search Simplification Initiative
According to Kasindorf, the motivation for the Agency Search Simplification report is to elevate mutual understanding. He says, "when you don't understand another person's view and perspective, you can never come to an agreement. Once you understand the motivation, it is far easier to have a discussion where you are removing barriers instead of creating them."

Additionally, the research between the 4A's and ANA "was never meant to be a one and done," says Kasindorf. There are plans to launch a client-agency relationship forum in 2023 specifically designed to keep these important conversations going. The Agency Search Simplification report is meant, he says, "to be the start of ongoing conversations that will better the efficiency, productivity, and effectiveness of agency reviews, and therefore agency-client relationships."

As Kasindorf explains, great relationships increase the likelihood of great work and, with it, the probability of a positive impact on the client's business. Which is what agencies and clients are really here for. So, he says, "we need to reclaim the focus and get back to the most important question, which is, 'how are we driving business results for you?'"
Insights from the Report
Budget disclosure for agency searches
According to the 4A's/ANA report, 98% of agencies said it's valuable to know the size of the account, but only 61% of marketers said providing the budget is valuable to the process.

When asked why so many clients don't seem to understand the importance of budget disclosure for agencies, Kasindorf shared what he's learned about the marketers' perspective. "While often it may be due to corporate policy, there are two other aspects to it. The first is that some clients think an agency will pitch to the budget. They are concerned that once a number is given, it will automatically become the proposed budget instead of the agency giving them options at lower costs. Secondly, there are some cases where marketers don't know how much things cost or what they should spend."

For their part, Kasindorf says, agencies today are "focused on what they need to do to solve the client's business problem."

Without knowing the budget, says Kasindorf, "you can't know the kind of resources you need or what solutions you can offer," making it a real challenge for agencies. He adds, "not knowing the budget also makes it difficult for the agency to know if the client is a good fit and what internal resources it can commit to the review process."

Kasindorf notes that an increasing number of agencies are refusing to participate in a search if the budget is not disclosed. It requires too many resources on their part for the end goal to be a question mark. They need to know if it's something they can deliver on if chosen and if it's worth their time to pursue.

One solution that can work for both parties, Kasindorf says, is for clients to disclose a budget range. That can allow the agency to step back and consider:

 	
If they believe they can solve the client’s problem for that amount of money.
 	
Whether they want to pursue the business.
 	
The opportunity to provide different budget options to the client.

Agencies and brands still out of sync on IP
According to the Agency Search Simplification Initiative’s report, more than 80% of agencies find it painful when brands require ownership of the work created during the pitch process. For their part, more than half of brands do not find it valuable to the search process to allow agencies to retain IP.

This year, Adweek reported agencies pitching without retaining IP is on the decline, as "heads of new business indicated their agencies won't agree to pitch without signing an agreement to own their work – or at least get paid a fair price for it."

When asked why IP ownership for work created in a review continues to be such a sticking point, Kasindorf refers to report findings and what he's heard from marketers. Their concerns include the following:

 	
Seeing very similar work from multiple agencies makes it hard to give any single agency credit.
 	
Seeing work done for their brand go to a competitor.
 	
Feeling a sense of ownership around the work produced due to the time they spent crafting a detailed strategy and brief.

 

On the agency side, a big concern is that clients will demand to own the work, then not hire the agency, and end up producing the work on their own or with a lower-priced agency. Kasindorf notes that while this “does not happen often, when it does, it’s shameful.”

One potential solution to this long-standing sticking point, Kasindorf says, might be a "temporary embargo." While the agency would retain ownership of its IP, it might agree to the work being embargoed for a period, giving the brand some peace of mind that the work won't show up elsewhere next month. While not a perfect solution, this compromise could leave each party reasonably satisfied.
Spec work on the decline?
Kasindorf reports that the 4A's are seeing an uptick in reviews without the requirement for spec work. While some agencies are pleased with that — because it means less demand on their resources — other agencies are not so happy. Those agencies feel very strongly that the spec work helps them win business.

When asked whether those agencies couldn't 'go the extra mile' and still provide spec work if they felt so strongly about it, Kasindorf replied that it "opens the door to another uncomfortable issue for agencies." For example, "what happens if the marketer says they don't want spec work but ultimately chooses an agency because they did spec work anyway, thus 'demonstrating more passion for their business'? Is that fair to the other competing agencies?"

Kasindorf presents another potential outcome for consideration: "if the marketer made it clear that they don't want spec work and an agency does it anyway, maybe they should be told 'you broke the rules, and you're out.' It would be a drastic measure, and we may not ever get there," Kasindorf says, "but having clarity upfront helps make it easier for agencies to decide if they want to participate and helps avoid surprises at the end."
In the Agency Search Simplification Initiative’s report, 100% of agencies and brands agree that what agencies are being judged on should be clearly communicated. Additionally, more than half of brands find it painful when agencies go “off book” and deviate from the pitch guidelines.
 

A recent ANA study revealed just 15% of agencies consider their relationship with marketing procurement to be “extremely or very healthy.”

In a previous conversation, Kasindorf mentioned that "marketing and procurement face fundamental challenges to alignment because their goals are often at odds. Procurement generally aims to generate savings, while marketing aims to generate growth." We asked him to speak about that further.

Historically, procurement's purpose was to source materials and components directly, Kasindorf explains. "The goal was most often lower cost, comparable quality. So once you meet certain standards, then price becomes a factor. And in that sphere, it was very effective."

However, Kasindorf continues, these "legacy procurement objectives and protocols are not a good fit for professional services — agencies in particular — because the differences in quality, pricing, and output are much greater." Forcing agencies into a process designed for a very different purpose "is not how an agency is going to succeed and may not even be how the internal marketing team is going to succeed," Kasindorf says.

While traditionally, procurement's goal is to generate savings, marketing's goal "is to drive value; whether through incremental sales, incremental awareness, or incremental clicks. It's about bringing additional value to the client's organization through marketing activities," explains Kasindorf.
And the conflict "really stems from how people are compensated," he continues. "You have to look at how they earn their bonus. So marketing may be incentivized to increase share or awareness by X amount, while procurement is likely awarded a bonus by reducing costs year over year. Those goals are often fundamentally at odds." And navigating these two teams' oppositional goals puts agencies in a no-win situation.
The fix for that, which the ANA and the 4A's are "very much in agreement" on, Kasindorf says, is "internal alignment on the client's side. Marketing and procurement must come together to engage with an agency through a singular voice."
In the Agency Search Simplification Initiative’s report, 92% of agencies and brands said it was valuable for procurement and client marketing teams to agree in advance on the criteria for an agency’s success.
 

Kasindorf is quick to point out that while this misalignment tends to happen at organizations with a "legacy procurement process" in place, there are also "many outstanding marketing procurement professionals who are taking a different approach, and they 'get it.'"
How can agencies tell if marketing and procurement are aligned?
There aren't any tips or tricks for this one, says Kasindorf. You just have to ask the question and trust they will be upfront about it. For example, he suggests asking the marketing team, "Is your procurement department involved in this review? Do they agree with the objectives outlined in your brief?"

Kasindorf notes that the 4A's are working with the ANA on additional initiatives surrounding procurement, which will "hopefully help procurement professionals understand agencies' value and think about advertising and marketing as an investment instead of a cost. If we can make that change and evolve how procurement perceives advertising and marketing, it will make things a lot easier," he says.

Kasindorf also references important work done by the World Federation of Advertisers (WFA) through the Project Spring Initiative, which published a report on transforming marketing procurement in 2020.
Other current new business challenges for agencies
We asked Kasindorf what other new business challenges he’s heard about from agencies. He shared two with us.

The first is that "some clients are requiring their existing agencies to go through the whole RFI/RFP process to get an additional piece of business from them." While Kasindorf doesn't know what's driving that, it's something the 4A's are hearing about more often.

It's "a shame," he says. "If you have a good client relationship and the client trusts the agency, why wouldn't you have a conversation with your agency and say, 'hey, we've got this new issue, we've got a new product, whatever it is…a new vertical we need to go after.' It seems to me you'd have that conversation first with your trusted agency partner."

Secondly, Kasindorf reports they've heard that many reviews are still long and drawn out, with moving targets and increasingly smaller prizes. "Even with the smaller prize size," he says, "the process can be equally as difficult as a huge review." And you may be told you're going to the finals, given a date for the finals. Then you complete the process, he explains, "only for the client to say, 'hey listen, we've got a couple of other stakeholders you're going to have to do another presentation to.'”

There is a resource cost to that for agencies and an emotional cost, says Kasindorf. "Because you think you're done; like 'I passed my final exam,' and then you're hit with 'oh, actually… there's another final exam you've got to take.'"

Editor’s note: Comments from Matt Kasindorf’s interview have been edited for length and clarity.
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