Ad Agency: Structure &
UNIT 6 MANAGING CLIENT AGENCY Functions
RELATIONSHIP
Structure
6.0 Introduction
6.1 Learning Outcomes
6.2 What is Client-Agency Relationship?
6.3 Why it is Important?
6.4 Basic Principles of Agency-Client Relationship
6.5 Elements of Good Client-Agency Relationship
6.6 Do’s and Don’ts of a Client with Agency
6.7 Do’s and Don’ts of an Agency with Client
6.8 Strategy Based on the Size of the Client
6.9 Strategy Based on the Size of the Agency
6.10 Barriers in a Good Client-Agency Relationship
6.11 Let Us Sum Up
6.12 Check Your Progress: Possible Answers
6.13 Further Readings
6.14 Glossary
6.0 INTRODUCTION
In the earlier chapters you have studied that an Ad agency is as Philip Kotler opines
that “is a marketing service firm that assists its clients in planning, preparing,
implementing and evaluating various activities of advertising campaign.”
Another view expressed by Rozer and Borton is that “Advertising agency is a group
of persons who have a specialization in advertising. It includes ad copywriters, ad
designers, media selectors and advisors for various advertising issues”
Thus, there are certain common features that define an advertising agency:
Advertising agency is an independent business organization.
Agency provides services to its clients who are searching customers for
their goods and services.
Agency employs the experts, researchers etc.
Agency performs the functions like planning, implementation of campaign,
research, follow up advertisement, measuring effectiveness of various media
for its clients.
It charges fees, service charges and commission from its clients.
Thus, under all circumstances an agency survives because of its relationship with
the client. A vibrant and professional agency-client relationship remains the basic
premise of a successful advertising agency. 119
Practice of Advertising
6.1 LEARNING OUTCOMES
After reading this unit you should be able to:
Identify the elements responsible for agency-client relationship;
Analyse the barriers in a professional agency-client management;
Evaluate the importance of a good agency-client relationship; and
Apply the basic principles of agency-client management.
6.2 WHAT IS AGENCY-CLIENT RELATIONSHIP?
A client-agency relationship is an agreement between a company that provides services
like marketing, research, video, animation, advertising, or public relations services
to the client and the company that provides such services is known as the agency.
This relationship starts when the client provides the agency with a briefing of what
the client wants to do with the product and continues through the pitch and selection
process until the work is awarded and a contract is signed.
However, the relationship extends far beyond this, to include the client’s and agency’s
collaborative efforts which comprises of the contract’s deliverables, the frequency
of meetings, reports, and interactions, how ideas will be developed, agreed upon,
and implemented, the degree to which the two parties will collaborate, how feedback
will be supplied, and how the contract will end.
6.3 WHY IT IS IMPORTANT?
A good client-agency relationship is essential because :
To get the expected outcomes, the best quality results. Meeting the client’s
desired objective in reaching out to the target market. The advertising team
should feel motivated enough to do the work and this is possible only when
there is constant communication between the two parties
To avoid problems such as misunderstanding and distrust among both parties,
an agency shares the goals of the client. Therefore, a good relationship
can build an environment of mutual trust and confidence and together both
the parties can achieve the goal.
To help the client in facing challenges like ever changing market conditions
and devising strategies likewise. Building relationships takes time, but it is
crucial for both the agency and the customer. Agencies draw attention to
a target audience’s problem and entice them with answers. They devise
various techniques to bring in more and more business. Strong client-agency
relationships result in the firm prospering at the top. What matters in the
end is how much you paid for the agency and whether they delivered on
their promises. In terms of technology and marketing trends, agencies are
ahead of their clients. They are aware of SEO tools. Have a good
understanding of how to capture a big number of people while keeping
trends in mind. The primary priority of the agency is to keep their hands
on the target audience. They discuss and shape all marketing plans in
accordance with current trends. Agencies work hard to keep their clientele
120 informed. They investigate and recommend the best option for the client.
To avoid unnecessary wastage of funds and time. The agency finds out Managing Client
Agency Relationship
everything to know about its clients and can honestly advise them on what
is best for them. They meet, talk about, and plan all the initiatives while
keeping the clients’ objectives in mind. When there are two of them, i.e.,
Client and agency analyse all the advantages and disadvantages of each
technique, resulting in several plans. Work as a team if you want to work
smart. Agencies collaborate with firm brand managers or marketing managers
to develop new results-oriented goals at all hours of the day and night.
Check Your Progress: 1
Note: 1) Use the space below for you answers.
2) Compare your answers with those given at the end of this unit.
1. If a client-agency relationship fails what according to you are the possible reasons?
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2. What is agency-client relationship?
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Activity 1
Make a list of all the award-winning advertising campaigns of India in 2020-
2021 and their advertising agencies
6.4 BASIC PRINCIPLES OF AGENCY-CLIENT
RELATIONSHIP
These principles are:
1. The agency does not promote a competitor’s product that is a close substitute.
The client, likewise, avoids using the services of a competitive advertising
agency. This is done to keep the focus clear.
2. The client gives the agency permission to charge the client for all advertising
charges. It is made clear at the very beginning that all the expenses that
the advertising agency would do, must be borne by the client.
3. The media commission is kept by the agency, and the client agrees to pay
the bill immediately. A separate fee is charged for the media services. In
advertising, fees for broadcasting or printing or in social media are required
to be paid to the media houses. The agency charges this money on behalf
of the media houses as the advertising agencies does all the media scheduling.
Media scheduling is deciding at which time the advertisement should go in
which channel based on TRP’s (Television Rating Point), so that more
audiences get exposed to it.
4. Any cash discount offered by the media is passed on to the client. The
agency does not keep any special discounts offered by the media houses
and is passed to the client. 121
Practice of Advertising 5. The agency is not held accountable for media blunders such as scheduling,
positioning, and so on. Although an agency designs the advertisements for
the client and schedules it too, but is not responsible for any mistakes.
6.5 ELEMENTS OF A GOOD CLIENT-AGENCY
RELATIONSHIP
Businesses of all sizes have been using agency services to replace their in-house
marketing teams for decades. As a result, agencies can provide a company with
more diverse prospects and unique partnerships that an in-house team would never
be able to provide. Many firms are afraid to enter into a agency relationship because
there are so many grey areas and unknown territories to explore. While both parties
enjoy the excitement of new client-agency partnerships, many find it difficult to develop
trust, commitment, and strong teamwork right away. It is the wish of both the agency
as also the client to maintain a fruitful, long-term relationship.
Some of the elements of a good client-agency relationship are-
Develop a mutual understanding of each other’s businesses to deliver
customized solutions.
The client and the agency must be conversant with each other’s industries and
business vision and philosophies. The outcome and satisfaction of advertising
projects are influenced by the understanding of each other’s business. Both
sides should investigate how their industry and company principles operate in
today’s market before initiating a client-agency relationship. The more one side
knows about the other, the better conflicts can be resolved, campaigns can be
finished more quickly, and the chances of developing a long-term client-agency
relationship improves. There is no one size- fits- all solution in today’s market.
Agencies which attempt to understand how unique each client is have higher
chances of establishing trust and confidence, as well as making each customer
feel like their agency is an extension of their team.
Encourage realistic goals.
For setting standards and benchmarks, creating goals, milestones, and monitoring
progress, both parties’ expectations are crucial. When it comes to things outside
their purview, agencies must be cautious not to overestimate their powers. Clients
must also hold their agencies accountable for providing timely and accurate
information that allows them to function effectively on their behalf. It’s easier
to define and manage expectations when an agency maps out a campaign’s
process with objectives and deliverables, as well as distributing tasks between
it and the client. This also quickly detects bottlenecks and potentially troublesome
areas. If a client has unreasonable expectations or if an agency fails to set realistic
expectations, a client-agency relationship is bound to collapse.
Transparency and Authenticity
It’s crucial to remember that the best client-agency partnerships are determined
by both parties’ absolute candour. An agency, for example, should be transparent
about its approach and payment structure. In the meantime, clients should be
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honest about their objectives and financial situation. While agencies may have Managing Client
Agency Relationship
their own protocols, a high level of transparency is necessary to build confidence
and set acceptable expectations. While some clients may be uninterested in
micro-level data, a respectable agency will encourage this conversation by
providing them with frequent overviews. Establishing checkpoints throughout
the engagement fosters mutual trust and boosts the possibility of meeting and
exceeding marketing objectives. As a result, the client can understand the agency’s
actions and aims. When a campaign or plan does not align with the client’s
overarching goal or is difficult to implement, agencies should notify them. Clients,
on the other hand, should feel free to express their discontent or delight with
the project’s results.
All competent agencies will set clear success goals, track campaign results,
and provide campaign results quantitatively. Such goals demonstrate that your
digital agency is adding real value to your company.
Regular communication
The client-agency relationship relies heavily on communication. It’s critical to
keep in touch with clients on a frequent basis. Nothing makes a client feel more
nervous than not receiving communication from their agency. Keep clients
informed about the progress of their projects or campaigns, for example. Include
them in the process early on so they may ask questions and seek modifications
rather than waiting after you’ve finished much of the work. Set expectations
from the start on how clients can reach you and how often you’ll communicate.
This could involve arranging weekly project meetings, responding to emails within
a certain time frame, or submitting monthly campaign reports. When you start
a new connection with a client, they need to know how much communication
they can expect and what you’ll need from them to keep things moving. The
key to effective client-agency communication is to work together as partners
to accomplish mutual goals and remarkable results. Rather than telling what
they need, both parties should take the time to listen to one another and offer
what they require.
Demonstrate gratitude
Even though both clients and agencies are focused solely on business, it’s crucial
to remind your partner of their value. Both sides are entitled to cooperate with
the best. Make each other feel special by staying in touch frequently (don’t
wait for them to contact you) or sending a handmade thank you card or a small
gift to show your appreciation.
A dependable content approval procedure
The client-agency relationship is heavily reliant on content approvals. It’s critical
to establish an approval process before beginning any work with a client.
Otherwise, things might quickly spiral out of control.
Getting client approval and input via email and spreadsheets can be time-
consuming and burdensome, negatively compromising the client-agency
relationship. Personalized meetings or creating and sharing workflows can prove
extremely beneficial.
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Practice of Advertising
6.6 DO’S AND DONT’S OF THE CLIENT WITH
AGENCY
Image credits © Gaurav Akrani. [Link]
relationship-advertising-digital-marketing/
The client should always be courteous to the ad agency and never upset
its ego.
It should provide as much information as possible on the advertised product
and the company. A well-informed advertising agency will create better
advertisements.
Negotiate the ad agency’s prices only, when necessary, as this may affect
the quality of the service.
Motivate the agency to produce high-quality, high-impact work. Its expenses,
such as media bills, fees and other expenses must be paid promptly. The
client should not wait for the advertising firm to remind him of his financial
obligations
The client should have full faith in the ad agency and should not switch ad
agencies without a good reason. If the client is not happy, it should always
convey its concerns first and then wait for the necessary modifications to
take effect.
The ad agency’s recommendations should be approved by the client. He
must avoid small fights and only bring up the most important issues that
need to be addressed.
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Give the agency enough time to work on and develop an ad campaign. It Managing Client
Agency Relationship
should not be forced to work quickly by the client. He should refrain from
setting timelines.
Keep disagreements to a bare minimum.
Charges for a certain ad campaign should be finalized ahead of time.
6.7 DO’S AND DONT’S OF THE AGENCY WITH
CLIENT
Image credits © Gaurav Akrani
To ensure the success of the client’s ad campaign, the advertising firm should
work smart and hard.
It should develop a decent marketing strategy and carry it out efficiently
and successfully. However, it must first obtain the client’s approval.
The agency’s account executive has the responsibility of keeping his customer
pleased and satisfied.
It should not impose unnecessarily large fees on clients.
It should not run advertisements for a competitor of the client.
It should gather all market data that will aid in the creation of better
advertisements.
To minimize misunderstandings, discuss the ad rates with the client ahead
of time.
Provide the names of the team members (workers) who are working on
the customer’s ad campaign to the client.
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Practice of Advertising Inform the client of any changes that have occurred within the agency.
Never put a client’s ego in jeopardy. The agency should always give him
with timely services and make every effort to satisfy him.
As a result, maintaining a healthy client-agency relationship is essential.
Check Your Progress: 2
Note: 1) Use the space below for you answers.
2) Compare your answers with those given at the end of this unit.
1. How important is communication in an effective client-agency relationship?
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2. Name at least four do’s and don’ts an agency should follow with the client?
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6.8 STRATEGY BASED ON THE SIZE OF THE’
CLIENT
The nature of inputs required from an agency vary with the size of the client and
the brand. Different expectations from agency when the brand is being launched,
when it is doing reasonably well and when it is the market leader are discussed
here.
A. Client: when the brand is being launched
Agency Task: “Nurturing of new brand” “Create positioning”
When the client is young and small, he is launching a new product/new established
market. This is an entrepreneurial phase for the client. The services the client demands
from the agency must be able to comprehend the growth pangs of the
[Link] agency therefore must devote time to their needs which are usually
unique and require an entrepreneurial decision-making streak in the agency as well.
Quick decisions and quick reflexes of an agency are critical. Such tactics, if backed
by sound marketing thinking at client/agency end usually lead to success and rising
brand shares. The basic agency task is however to create a brand positioning strategy
for the client. The demands from various departments of the agency, when the product
is launched, are as follows:
Servicing: Decision Making: Quick, based on gut feel.
Servicing person: Should be senior, capable of thinking on his feet. Must have
knowledge of AccountPlanning.
Media Planning: Should focus on low cost, unconventional media.
Account Planning: Should be capable of evaluating if client’s gut feel meets
126 marketing logic
Creative: Should never let the focus shift from the brand positioning in Managing Client
Agency Relationship
the flood of ideas coming in.
Client Focus: In early entrepreneurial phase may be survival. Agency should
understand this.
B. Client: When the client does reasonably well in the marketplace
Agency Task: “Strengthen brand positioning” to build brand leader.
When the client is of medium size and is fairly known in the market place the main
job of the agency is to build the brand as the market leader.
The focus for different. departments of the agency for a medium size client are as
follows:
Servicing : May be personalized still. But agency should meet second line
marketing people to receive market feedback directly
Decision Making : Agency should promote formalized decision making based on
Account Planning recommendations. To dilute focus on gut,
feel only.
Media Planning : Must think of using mass media judiciously. For building brand
leaders, Media Dominance Strategy must be worked out.
Account Planning : The agency should focus to heighten brand positioning or to
“reposition” a slow-moving brand.
Creative : To make brand. distinction totally different from others, it should
use media differently or design the message differently.
Client Focus : It must be made long term here by agency advice.
C. Client: Market Leader
Agency Task: “Maintaining” dominant brands
When brands are dominating ones in their product category, and market share can
be increased only marginally, with the category itself nearing maturity stage, the key
function is of maintaining brand shares. The focus is on “pre-emptive” strategies
and not “attacking” strategies. Competitors’ strategies must be pre-empted and
defensive mechanisms worked out. Aggressive strategies at this stage may drain
more financial resources than they can generate. The brand positioning must be
guarded here against imitators.
The focus of various departments of the agency for a large size client is outlined
below:
Servicing: Formal, following hierarchical structure.
Decision Making: Formalized.
Media Planning: The key input to strategy here is to research (what the
competitors plan to do) to pre-empt. Client’s marketing must
participate in this.
Account Planning: Defensive strategy for brand position
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Practice of Advertising Creative: Focused for those target audiences which competitors are
planning to tap. In other media, reminder level to be maintained.
Client Focus: Defensive for brand position and share offensive for competitive
threats.
Activity 2
Select an agency which caters to several clients. Analyse the ‘Agency Task’ with
respect to each type of client. How would you say the task varies between clients,
if at all.
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6.9 STRATEGY BASED ON THE SIZE OF THE
AGENCY
The strategy options for small, medium and large size agencies are discussed here.
The Small Size Agency
Small agencies by their very size usually do not have very large brands to work
on. The agency focus then largely becomes entrepreneurial, where the agency has
an ability to select clients whose products have a USP which is capable of becoming
a benefit, highly desirable to a particular target audience in the market.
At this stage, agency strategy involves a search for the right clients i.e., the agency
should catch the entrepreneur who has a good product. The success of the brand
then become the success of the agency. a small size agency also offers some
specialized services. Clients, irrespective of size, needing strengths in certain service
areas find such agencies useful. For example, agencies having good studio facilities
could cater to clients who have needs of printing or other work requiring high quality
artwork.
Medium Size Agencies
The advantage of the medium size agency is clear. It is neither too big to be unaffected
by a change in any client’s health nor is it too small to avoid offering comprehensive
advertising services. Its product portfolio, should consist of “today’s bread winners”
who are some large brands as well as “tomorrows bread winners” which are small
brands the agency is nurturing to become brand leaders. The key benefits a medium
size agency offers its clients (its positioning statement) is that it is not too big for its
clients to lack personalized agency attention. Neither is it too small to avoid investing
in full-fledged infrastructural support services. Therefore, it can claim to offer the
best of both worlds to a client.
Large size agencies
A large agency must heighten its positioning as a leader. This can be done by setting
industry standards. It can help in creating better training facilities to train professionals
for advertising. This creates goodwill as many students may move to client
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organizations. It can also help to attract the best talent, hence preserving the pre- Managing Client
Agency Relationship
eminent place for the agency in the long run. This could also be done through organizing
seminars for both agencies and clients. Yet another strategy could be to create industry
standards in auxiliary services like market research by setting up independent
companies to handle these services. Such services can be used by both clients, and
other agencies. The basic strategy is to help improve the quality of inputs for the
advertising profession. The leading brands naturally choose the largest agencies.
Hence a large agency’s client list reads like a who’s who of brands. Due to the
size of such agencies, it becomes unviable to handle brands who generate turnovers
below a certain size. This leads the “innovator entrepreneurs” who are creating new
product categories and attacking new markets to look elsewhere.
Activity 3
Select an agency, make a list of the clients it caters. Find out its most successful
campaigns
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6.10 BARRIERS IN A GOOD CLIENT-AGENCY
RELATIONSHIP
Agency professionals identify what they believe to be the most challenging barriers
to the success of a client/agency relationship:
Delivering innovative ideas- A client is always on the lookout for something
unique which will highlight its product and attract the right segment of
customers. It is important for client to break through the clutter of
advertisements that are always in front of us. Sometimes this can ruin the
relationship between the two.
Attributing revenue to marketing- An advertising campaign is initiated to
attract the attention of the prospective customers and persuade them to
buy the product in the initial stage and retain it and build brand loyalty at
the later stage. This assurance comes from the success of the advertisement
strategy that can generate a consistent revenue for the organization.
Delivering on established metrics- While we are all aware about the designing
a campaign but there are a lot of things that goes after designing and
scheduling the campaign. Tracking its success parameters like how many
viewers watched, conversion rate (how many did buy the product), what
is the return on investment and so on.
Maintaining effective project management- A client would always want the
ebt for his brand and that is the reason why advertisement agencies must
keep a track of the project in every step and inform the client. Delay in
informing or misinforming or not informing at all about the progress of a
campaign can be deadly for an agency. The client may not believe him at
all in his next assignment.
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Practice of Advertising Understanding brand completely- The people in the agency should have a
clear idea about the brand they are handling. Confused vision about the
brand will create obstacles for them in identifying target markets and finally
in designing the campaign.
Making client the priority- The client should be given utmost importance
by the agency. The agency should not distinguish between a small or a big
agency and its behavior with each agency should unique and personalized.
The client should feel wanted and feel that his decision about the choice
of the agency is right.
Using senior talent on accounts- The agency must consider the experience
of the senior advertising executives while handling a client as that would
add more value to the project and promise a better campaign.
In a survey by Ascend and its research partners in 2020, it was found that the above
points contribute to a certain percentage in the success of client agency relationship.
[Link]
success-of-a-client-agency-relationship
Check Your Progress: 3
Note: 1) Use the space below for you answers.
2) Compare your answers with those given at the end of this unit.
1. What are the different challenges in a good client-agency relationship.
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6.11 LET US SUM UP
Like any other kind of connection, agency-client relationships include ups and downs
and require effort from both parties to maintain. Building a successful agency involves
several different steps. Success requires managing several teams, juggling multiple
projects and deadlines, and being proactive with your own marketing initiatives.
Both the clients and the agency need to understand each other and develop a long
130 term and fruitful relationship. There are challenges but there also some rules to follow.
Managing Client
6.12 CHECK YOUR PROGRESS: POSSIBLE Agency Relationship
ANSWERS
Check Your Progress: 1
1. There can be many reasons for the failure in a good client agency relationship.
Some of them are
b. Lack of trust and transparency in each other.
c. Lack of communication between the two
d. Failure to understand the brand and the vision of the company.
e. Delay in payments by the client.
f. Lack of effective project management.
2. An agreement between the client and one that offers marketing, video, animation,
search, advertising, or public relations services is known as a client-agency
relationship (the agency). When a client briefs an agency, the connection begins.
It then lasts through the pitch and selection process until the work is awarded
and a contract is signed. However, the partnership spans much more ground,
including how the client and the agency collaborate. This covers the agreed-
upon deliverables, the frequency of meetings, reports, and interactions, how
ideas are hatched, settled upon, and put into practice, the level of cooperation
between the two sides, how feedback is given, and how the contract is terminated.
Check Your Progress: 2
1. Establishing trust with customers and effectively articulating needs, expectations,
and obstacles are made possible by effective communication. Improved client
interactions and possible growth of the firm can both result from improved
communication.
a. Great communication can increase your popularity with clients,
b. improve how trustworthy clients see the agency and can make tricky situations
easier to resolve.
2. Name at least four do’s and don’ts an agency should follow with the client?Four
Do’s and Don’ts an agency should follow with the client are-
c. To ensure the success of the client’s ad campaign, the advertising firm should
work smart and hard.
d. It should develop a decent marketing strategy and carry it out efficiently
and successfully. However, it must first obtain the client’s approval.
e. The agency’s account executive has the responsibility of keeping his customer
pleased and satisfied.
f. It should not impose unnecessarily large fees on clients.
Check Your Progress: 3
1. The different challenges in a good client-agency relationship are-
b. Delivering innovative ideas. 131
Practice of Advertising c. Attributing revenue to marketing.
d. Delivering on established metrics.
e. Maintaining effective project management.
f. Understanding brand completely.
g. Making client the priority.
h. Using senior talent on accounts.
6.13 FURTHER READINGS
For those of you who would like to delve further in the field of marketing of
Advertising Services, the following books are indicated.
Maister David H., Professional Service Firm Management, 4thed., (Boston,
MA: Maister Associates,1989).
Philip Kotler and Paul N. Bloom, Marketing Professional Services (Englewood
Cliffs, N.J. : Prentice-Hall,1997).
Rick Webb, Agency: Starting a Creative Firm in the Age of Digital Marketing
(Advertising Age) 2015th Edition. Springer;
Robert Solomon. The Art of Client Service: The Classic Guide, Updated
for Today’s Marketers and Advertisers Hardcover – 22 April 2016. Wiley;
3rd edition
Wilson, Aubrey, The Marketing of Professional Service (London: McGraw
Hill, 1972).
6.14 GLOSSARY
Pre-emptive strategy : To effectively use this advertising method, you must first
in advertising comprehend the wants and intentions of your target
audience. Preemptive methods aim to considerably
improve the solutions, systems, and structures to acquire
sustainable benefits. Leading transformation and creating
value are the main priorities. They offer the best
opportunity to gain advantage over competitors.
Influencer Marketing, Discounts and Promotions, vlogs,
Facebook advertising are some of the strategies that are
used by the agencies to outwit the rivals.
Ancillary services in : An advertisement is produced or created with the help
an advertising agency of ancillary services. They provide services like those
of a studio, a photographer, a printer, a maker of gifts,
etc. Copywriters, jingle singers, radio announcers, artists,
visualizers, technical writers, etc. are all independent
contractors. They also include packaging, creative retail
solutions, branding on digital platforms, advertising,
production campaigns and branding for special events.
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Brand Positioning : The process of positioning a brand in the customers’ Managing Client
Agency Relationship
minds is called brand positioning. Brand positioning is
the tactic used to differentiate a particular company from
the competition and goes beyond a catchy tagline or
elaborate design. A good example can be that of Tesla
cars. Tesla is a high-end brand that costs more than its
rivals. As a result, they don’t include pricing in their
branding and instead place an emphasis on the caliber
of their vehicles. Along with being luxurious automobiles,
Tesla cars have a long range, are green, and are electric.
Tesla’s electric cars set them apart from other gas-
powered luxury cars. They set themselves apart from
conventional electric cars by offering better-quality
models with more range.
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