Should agency management sit with marketing or procurement?
By Jim Wallace
This article was originally published on mxpiq.com. in 2023
The Winning Formula
“Agency management is constantly challenged to show value. Internal knowledge of both marketing and procurement combined with a deep understanding of agency models is a winning combination for agency management professionals”
Let’s face it. Agency models and marketing operations have absolutely become more complex!
For most organizations, agency management, agency models, and marketing operations have become more complex than ever before. Gone are the days of a predictable universe of agencies or a holding company single point of contact approach to meet all marketing needs. In the agency model of today, many client ecosystems include an in-house agency plus a host of specialist agency partners for services like advertising, brand, communications, social, digital, media, search, and experiential, and that may not be all.
Agency Model Complexity
On top of agency model complexity, there is a an ever increasing plethora of marketing technology platforms plus all the standard agency operating procedures that need to be figured out, communicated, and managed. For instance, marketing technology that ties to agency and marketing operations can include your workflow tool, the CRM platform, a digital asset management system, and a data management platform, just to name a few.
For marketing and agency operations, this means updates to the strategy and approach for key activities like planning and scoping, briefing, reporting, rights management, agency assessments and the list goes on.
Operational Challenges
All this complexity, if not managed well, can cause operational challenges, fragmentation, and confusion for clients:
Lack of Scope Clarity
Confusion on Agency Roles and Responsibilities
Poor Collaboration
Inconsistent Briefing
Fragmented Reporting Approaches
Poor Output and Missed Deadlines
Territorial Behavior
Lack of Trust
Internal Tension or Frustration
This ecosystem complexity has led to an increase in the importance of agency management and agency operations functions within most client organizations. Before we talk about where agency management should sit to be most effective, let’s first outline some of the typical agency management functions and the knowledge and skills required to set up a successful agency management practice.
Key agency management functions
Agency Model and Strategy
Agency Reviews
Roster Management
Relationship Management
Survey Cadence & Questions
Key KPI’s
Feedback and Action Planning
Standardizing Key Operations
Scoping
Briefing
Reporting
Documenting Key Agency Processes
Workflows & Approvals
Agency Collaboration & Handoffs
Asset & Rights Management
Like most marketing functions, agency management requires some specific knowledge and skills, including a complete understanding of the needs of marketers, and of the marketing function and how it operates. Procurement is also a key collaboration partner for any agency management function, no matter where it sits in the organization.
How agency management shows value
Agency management is constantly challenged to show value. Internal knowledge of both marketing and procurement combined with a deep understanding of agency models is a winning combination for agency management professionals. It is important to know the agency landscape, stay current on what is happening in the marketplace with agencies and holding companies, understand areas of strength for each agency, how they operate, and what each agency type needs from the marketing clients to be successful partners.
The ability to listen to both marketing and agencies and the willingness to take the necessary actions to help solve either short term issues or longer-term systemic challenges, and the ability to manage up and across within the organization is critical to agency management’s success.
And finally, agency management needs to have a collaborative spirit to work with and across marketing and procurement and with the in-house and external agency partners.
Where should agency management sit?
The question on everyone’s mind is where should agency management sit?
Agency management is typically embedded in one of three teams in client organizations:
Marketing
Marketing Operations
Procurement
The truth is this is an important organizational decision. When assessing where this function should reside there are many factors to consider. Following is a list of criteria to consider before deciding.
Current organizational set up
How complex or simple is the organization to navigate? Are there many brand teams or one centralized marketing team? How many lines of business in the organization?
Geographical footprint
What are the agency network needs and roles at a global, regional, and country level? How is the marketing budget allocated around the globe and who makes the agency selections?
Marketing and product portfolio
How many product launches does marketing execute per year and how complex are the go-to-market model and channels? How many campaigns and assets are created on an annual basis? What does the marketing calendar look like from a quarterly and seasonal perspective?
Brand ecosystem
A branded house or a house of brands? How is the brand identity team set up and how do they work with marketing? Does each brand select their own agencies that best fit the needs?
Agency model & strategy
Does the organization use a single holding company model or more bespoke best-in-class agency model? Who determines agency needs in the organization? Is the decision-making process CMO led or does each marketing/product team select their own agencies? Do you have a single AOR approach or have multiple agencies depending on the service area?
Key takeaways for agency management optimization
Internal alignment on the goals for marketing, evaluation of the complexity of the agency ecosystem, and review of the current organizational structure are all key to making the right decision for your brand.
Generally, the more complex the organizational set-up and brand/product portfolios combined with the breadth of the geographical needs and go-to-market channels tend to be best suited to have agency management sit closer to the CMO in marketing or marketing operations.
In less complex organizations, with more limited brand/product portfolios and go-to-market models, it may make more sense to locate agency management in the procurement team.
So, in the end the point is there is no universal right or wrong answer. It all comes down to having an agency management team with the right background and skills and placing them in the right location that will best serve the organization.
About the author
Blum Consulting Partners, Inc., specializes in process review, analysis, and implementation to maximize creative output, effective process, and efficient use of resources in the creative execution process. We work with agencies, creative content providers, marketing stakeholders, and in-house agencies, to identify and close gaps at each step of the creative process. We deliver solutions and implement procedures that help companies plan for future growth, deliver on expectations, communicate better internally and externally, and save time and money.
