Warc Blog

Consultancy calls for agency roster cuts

8 October 2013
BOSTON: Larger brand owners should consider cutting the number of agencies they work with if they want to increase the efficiency and effectiveness of their marketing, a leading consultancy has argued.

The Boston Consulting Group (BCG) suggested in a new analysis that the consolidation and improved management of agency rosters could save money while improving the consistency of brand messaging.

BCG noted that many companies turned to local agencies for marketing outside the US, a practice intensified by the need to create specific messages for the many different media channels now available.

But by relying on fewer but more strategic partners, said BCG, "large companies can consolidate their spending and reduce their total agency fees while improving quality, focus, and service".

The authors cited the example of Procter & Gamble, which saw its global agency-partnership roster grow to over 1,000 different companies, but had since managed to reduce this by over half, making significant savings in the process.

Working with fewer agencies meant that companies would be better able to strengthen their partnerships with the most talented ones and increase the consistency of the overall brand message, said BCG. 

The report also pointed out that marketers could then spend more time managing their brands and less time managing agencies.

BCG further observed that effective management of agencies could save companies up to 20% on their agency fees, but this required agreement on a clear statement of work and the necessary resources, including the mix and seniority of agency employees working on an account.

Nor was it just the external partners that executives should be considering if they wanted to boost the productivity of their spending, warned BCG.

It highlighted several internal sources of inefficiency, including "unclear brand strategies, vague and poorly developed decision rights regarding content creation, unstructured agency-engagement processes, and poor briefing practices".

The best-performing companies, it said, ensured that every brand and message reinforced an overall brand strategy in a regular, consistent manner, while senior executives were able to evaluate each brand and location in terms of potential value and allocate marketing resources accordingly.


Data sourced from Boston Consulting Group; additional content by Warc staff

 
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