CHARTERED INSTITUTE OF PURCHASING & SUPPLY
Marketing Specialist Knowledge Group Paper:
Finding and Appointing a Marketing Communications Agency
Section 1 - Introduction
This Knowledge Works guide is intended for those who are encountering, or being asked to manage, marketing procurement for the first time.
It is not an exhaustive treatise. The intent is to provide some basic, practical information and advice to help those who are new to this sector to get started, together with some additional information links for those who, having read the guide, would like to know more.
Section 2 - Definitions
Marketing professionals and communication agency personnel will frequently use terminology to describe functions and processes that may take place during an agency search and selection programme that is different from the terminology more commonly used, or familiar to, the procurement professional.
In order to minimise the confusion that these differences may cause, some of the more commonly used terms have been briefly defined below, indicating the equivalent procurement terminology where appropriate.
Above the line / ATLgenerally defined as advertising communication for which a payment is made to a media owner (TV channel, press title, cinema screen, poster site etc) and for which the agency creating the advertising, and/or planning and booking the space where it appears, is paid a commission or fee.
Advertising agencyA company specialising in the creation of ideas to promote a product, service or message by an identified sponsor using paid-for media. Many advertising agencies offer communications services beyond this narrow definition.
B2BBusiness to Business. Relating to the sale of a product or service for any use other than personal consumption. The buyer may be a manufacturer, a reseller, a government body, a non-profit making institution or any organisation other than an ultimate consumer.
B2CBusiness to Consumer. Relating to the sale of a product for personal consumption. The buyer may be an individual, family or other group buying to use the product themselves or for end use by another individual.
Below the line / BTLNon-media advertising or promotion where no media commission has been paid to the agency: BTL includes communications such as direct marketing, point of sale and promotional marketing (sales promotion).
BrandThe set of physical attributes of a product or service together with the beliefs and expectations surrounding it – a unique combination which the name or the logo of the product or service should evoke in the mind of the audience.
BriefA formal document passed to an agency by a current client or prospective client (see Pitch Brief below) containing the essential guidelines for the execution of a communications campaign of some kind. Structure and content vary in practice but might include campaign objectives; budget; product, company and market profiles, strategy guidelines, timetable; implementation procedures; constraints, criteria for evaluation of effectiveness, and other directives.
Chemistry meetingA face-to-face meeting between the client and the prospective agency which precedes a formal pitch, giving the two parties the chance to take a look at one another. The agency has the opportunity to briefly present their relevant credentials/experience and their first thoughts about the client’s business. The client has the opportunity to meet the agency’s principals/potential team, talk in outline about the objectives they are hoping to achieve and to ask relevant questions. Part of the intent is for the parties to intuitively tease out whether they can work together. It is a formal meeting but it isn’t a pitch.
Credentials PresentationA relatively informal presentation by a communications agency to a prospective client. It may also take the form of a written document and be presented/written as a response to a Request For Information (RFI).
Design consultancyA company specialising in design projects ranging from brand identity, design of marketing communications (including web and print) and structural design (including packaging and product design).
Digital agencyA company specialising in the creative and technical development of internet based communication including web design, email marketing, viral campaigns, online advertising, search engine optimisation, podcasting and more.
Direct marketing agencyA company specialising in the creation and implementation of activities that make it possible to offer goods, services or transmit messages to a segment of the population by post, telephone, email or other direct means.
IncumbentAn agency that has been engaged to provide consultancy and services to a client on an on-going basis and is therefore deemed to be the client’s agency of record (see Retainer).
IntermediaryAn expert adviser on the communications agency marketplace, specialising in helping clients (both marketers and procurement) to find and appoint the right communications agency for their needs.
MarketingManagement process responsible for identifying, anticipating and satisfying customer requirements profitably.
MarcommsAll methods used by a company to communicate with its customers and prospective customers.
Media agencyA company specialising in the planning, negotiation and buying of the media space (channels may include TV, cinema, press, posters, PR, sponsorship, digital/interactive, word of mouth and direct mail) where commercial messages will appear.
OJEUOfficial Journal of the European Union (formerly known as OJEC), the publication in which all contracts from the public sector valued above a certain threshold must be published and a call for tender issued. Local authorities, NHS Trusts, Central Government departments and some privately funded/managed contracts if the project is in receipt of more than 50% public funds are obliged to publish their contracts in this way. Information used to appraise potential suppliers who tender for the contract includes financial (accounts, prices), quality systems (ISO9000), environmental policy, references and site visits. The process is governed by strict time deadlines, notification processes and paper trails that must be adhered to/completed. See
PitchA formal presentation made by a communications agency at the invitation of a prospective client who considers the agency qualified to handle their business/account. This may also be referred to as ‘tendering’.
Pitch listThe short-list of agencies selected by a client to pitch for (or ‘tender’ for) the client’s business/account. This short-list will normally have been drawn from a wider pool of prospective agencies that have already made credentials presentations.
Public Relation consultancy A company specialising in activity that aims to establish and protect the reputation of a company or brand, and to create mutual understanding between the organisation and the segments of the public/communities with whom it needs to communicate.
RetainerA regular fee paid to secure and retain the services of a professional adviser (i.e. agency) on an on-going basis.
Sales promotion agency A company specialising in the creation of a range of techniques
used to engage the purchaser. These may include discounting, coupons, guarantees, free gifts, competitions, vouchers, demonstrations, bonuscommission and sponsorship. May also be known as Promotional Marketing.
Sponsorship agencyA company specialising in this specific branch of sales promotion where an organisation will help fund an event or support a business venture in return for publicity.
Section 3 - Role of the procurement professional in agency search and selection
Whilst the relationship with the communications agency is principally the province of the Marketing department, it is acknowledged good practice for Marketing and Procurement to work in close collaboration with one another when agencies are being selected and appointed.
It is a common desire amongst marketing personnel that they should be the ones to lead the search process; the responsibility for demonstrating where they can add value and rigour to the proceedings and support the Marketing department (as opposed to just being drafted in at the end of the process to negotiate commercial terms with the selected agency) can therefore rest squarely on Procurement’s shoulders.
Procurement can add value and rigour by:
- Helping the Marketing department to define the criteria that potential agencies must meet in order to be considered for the opportunity
- Creating a time line within which all of the key milestones of the search process will be reached and then ensuring that the time line is adhered to by all parties
- Maintaining a level playing field for the participants to compete within, ensuring an efficient flow of information between the Marketing department and the participating agencies and giving impartial feedback to the agencies where appropriate
- Helping the Marketing department to construct a meaningful scoring system or evaluation criteria by which to assess the short-listed agencies
- Helping the Marketing department define the scope of work/requirements against which the short-listed agencies or appointed agency must submit their remuneration proposals
The purchasing of marketing services requires a sensitivity and modification of approach that would not be necessary when purchasing some other goods and services. You are buying creative thinking (which can seem very intangible) and creative output (the judgement of which can seem very subjective).
The success - or otherwise - of the agency’s creative thinking and output is also very dependent upon the strength of relationship between the Marketing department, the procurement department and the agency. The emphasis upon and importance of the chemistry between the parties, the engendering of trust, and the development of appreciation of both creative and commercial sensitivities, should not be underestimated.
Section 4 - Things to consider before you undertake an agency search process
The following questions are well worth considering with your Marketing team prior to embarking on an agency search process:
- Do you really need to do this?
A communications agency pitch demands the commitment of considerable time and effort by those involved in the process, diverting them from their other professional responsibilities and commitments. A full search process may take 3-4 months or more to complete. Due consideration should be given as to whether or not your current agency relationship has irretrievably broken down and could be mended or whether you may already have the resources to satisfy the brief in-house or via other existing agency relationships.
- Do you have senior management endorsement/authority to proceed?
Making sure that senior management are aware of the proposed review and agree with it is essential. It can lead to existing relationship damage, the expending of unnecessary time and effort and considerable embarrassment if you fail to get the buy-in of key senior stakeholders upfront.
- Have you told your incumbent agency or agencies of your plans?
Once you have made the decision to proceed with an agency search process, it is highly recommended that you advise your incumbent agency of your intentions; this will avoid them discovering from another source that their tenure of the account is under threat and will stimulate open discussion about their future with you, whether they have an opportunity to retain the account etc
- If you have an incumbent agency, will they be invited to take part in the pitch process?
The incumbent should not be invited to re-pitch for the account if it is clear to both the marketing department and procurement that they have little or no chance of retaining the business following a competitive pitch.
- What are your contractual obligations as far as the incumbent agency is concerned?
Your obligations may relate to notice period, termination, TUPE issues, materials/company information currently in the agency’s possession, and creative work already planned for or in production but not yet completed.
- Are there any third party relationships that the incumbent agency manages on your behalf?
Will these continue to be managed by the incumbent or new agency going forward or will you now require a direct relationship with the third party/parties?
- Who are the key stakeholders that will need to be involved in both the process and the final decision-making?
It is important to give due consideration to those within your organisation who need to be involved with the process and final decision-making as opposed to including everyone who wants to be involved. Pitch processes are time-consuming affairs, requiring significant diary management of senior personnel who also have their day jobs to manage whilst this is going on.
Making sure that you have the right people involved at each stage of the process is key to achieving the successful appointment of the right agency in a reasonable time frame.
- Who, within your organisation, needs to be aware that the pitch is happening but will not be actively involved in the pitch process?
Identifying those within the organisation who need to be aware of the pitch (even if they won’t be directly involved in the process) and advising them of the ‘party line’ to give if they are approached by those outside the organisation (journalists, other agencies etc), will help you to control and manage the flow of information about the pitch and prevent inaccurate information finding its way into the trade press.
It is advisable to prepare a press release stating the information about the pitch that you are happy to have in the public domain; this, again, will allow you to control the flow of information and go some way to prevent inaccurate speculation.
- What is the objective in holding the pitch and what is the defined scope of work?
Are you intending to appoint an agency to provide on-going consultancy/service or is your requirement for a project-based relationship only? Do you need a single agency to manage all of your needs, a ‘lead’ agency who will define the approach or strategy that will be executed by another agency or agencies, or do you need to create a roster of agencies that will handle your brand, brands or projects?
- Is there a requirement for this process to take place within the provisions of the OJEU public tender process?
All public sector organisations (or companies who are managing projects whose funds are made up of more than 50% of public funds) will need to use the OJEU public tendering process for projects with a budget of £93,000 or more.
- Do you need to engage the assistance of a specialist intermediary or industry trade body in order to compile a list of agencies, advise on best practice or help you to manage the process?
The marketing communications industry is complex, fast-moving, and significantly over-supplied in all communication disciplines and at all levels of capability, size and sophistication. This can make finding the right agency for your needs an arduous and confusing process. It is worth considering whether you might benefit (particularly in terms of saving time and avoiding expensive mistakes) by enlisting the help of authoritative third party advice and guidance.
THE REMAINING SECTIONS OF THE KNOWLEDGE PAPER ON PITCHING HAVE YET TO BE DRAFTED
Section 5 - The agency search process
Section 6 - The pitch
Section 7 - The appointment of the agency / agencies
Section 8 - Things to consider following the agency appointment
Section 9 - Useful sources of information