How to lower your marketing agency spend
You’re concerned about your spend with your marketing agencies.
Maybe you’ve run out of annual budget and you’re only three months into the financial year. Perhaps your boss suddenly is grilling you on external costs. Or you suspect that your agency might be thieving bloody b*****ds.
At their worst, agency costs can be opaque or inconsistent – whilst one agency appears to charge for every call and email (and invoices promptly after each), another seemingly quotes on faith, gut-feeling or the phases of the moon.
And it can feel like a battle for both parties, even contributing to the breakdown of otherwise good working relationships.
But there are ways to ensure that you’re always getting the best deal that’s fair for both you and your agency partners, and here are some of our top tips on cost-efficiency and managing spend:
Be open about financial pressures and context
First and foremost, ensure you have an open, honest and regular dialogue with your agency around cost. Set up a recurring face-to-face meeting (monthly or quarterly) dedicated to talking through finances only, and bring any specific instances that need to be addressed. Share with them not only the financial pressures of your project/role/organisation, but also how you’re affected and measured against them. Three key things to prepare for in advance of the meeting are:
- Do you feel that the quotes provided are clear, coherent and consistent?
- If you’re facing pressures on cost, why and from whom?
- Are you happy with the value of the agency work provided? If not, why?
The aim of these questions is for both you and the agency to understand the full context so that solutions can be worked out collaboratively. Our clients often share similar issues, so you can benefit on the experience of an agency that’s helped in similar conversations elsewhere.
Understanding where exactly your pressures are coming from means your agency can work with you to satisfy both the project’s needs and your own personal ones – whether that’s demonstrating out-sized value to your boss, providing procurement with ROI information, or helping you get out of a pickle with the CFO.
Use your agency strategically
One of the most common reasons that agencies are hired is to satisfy a skills or a resource gap. Their breadth of experience, skill, focus and flexibility can be a critical asset in projects that need to move fast and at scale. However, regularity breeds routine, and if left unchecked what was once a source of valued expertise can soon become the go-to for all jobs – leading to misaligned expectations on service and value. Therefore it’s crucial to review not only your agency’s outputs in development and production, but what you’re putting over to them too – are you using them for the right jobs?
Integrated agencies are often able to offer a broad range of services, but will invariably have their specialties and deficits – meaning that using them as a one-stop-shop may not be the most cost-effective option. The best agency for big strategy and creative may not be the cheapest when it comes to rollout. As in the first point, discuss with your agency where they feel they add the most value in the working relationship and explore the possibility of either finding other partners to satisfy certain jobs (such as artworking and production) or bringing freelance talent in-house for dedicated needs (such as content writing). These conversations should form part of the regular finance meetings and, if handled honestly and constructively, lead to better cost-effectiveness, a higher quality of work, and stronger working relationships.
Innovation isn’t necessarily a cost
Inertia is easier than change, and habits and routine are the biggest obstacles when it comes to innovation – particularly in large companies with standardised process and stakeholders with traditional expectations. However, the way it’s always been done may not always be the most cost-effective way (just think of all the money saved nowadays on avoiding printed product catalogues, A2-sized presentation boards, and postage stamps…)
When briefing in your agency, be conscious as to how much of a solution you’re already providing, as opposed to a question. Instead of asking for a printed brand brochure, ask what are the best ways of communicating your new brand to a discerning audience. A good agency should always be pushing you to innovate, but that can sometimes be lost in the pressures of delivery and stakeholder satisfaction. So don’t be afraid of asking your agency explicitly to explore new innovative and cost-effective deliverables, tools, and channels. (And if you’re already working with us, be sure to make use of our Labs department for this very reason.)
Provide a clear budget upfront
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[Header photo: VanveenJF on Unsplash]
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Ultimately, as in any relationship, communication and honesty are key to managing your spend with agencies. Address concerns as and when you have them through regular conversations and work with your agency as a partner to benefit from their experience handling similar pressures. Money talks, and so should we.
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[Header photo: VanveenJF on Unsplash]
There’s a curious tension around this one, as a big frustration for agencies is not being given a specific budget to work to. And there are a couple of reasons as to why this may be.
Some clients worry that their agency is going to take the piss and overcook the costs to maximise their profit (see point 1 to address and avoid this, as it’s probably the sign of an unhealthy working relationship).
For others, it can be due to a lack of available benchmarking, where they lack a frame of reference to help them in understanding what a project should cost. Careful not to overspend budget, they’ll use the tender process as a benchmarking method. Unfortunately, this typically results in an unproductive feedback loop: “What does a campaign cost with you?” versus “Well, what are your goals and how much do you have?”
There are a couple of solutions to this. Providing a specific budget gives agencies parameters to work within and invites their own views on maximising budget and ensuring cost-efficiencies. For those concerned about value for money or lacking benchmarks, provide two or three different budgets for the agency to cost against. The initial costs will usually stay largely similar (thinking and development) whereas the activation costs (such as media and production) will typically see the greatest degree of flexibility.
Another option is to approach it from the other end – instead of a budget, provide your agency with your revenue target. Offer them the license to calculate what would be required to achieve your numbers based on their knowledge and experience. This green-field approach may unlock new ways of approaching the brief, give you a better understanding of their strategic capabilities, and potentially create a marketing plan that more closely aligns with the overall business strategy.
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Ultimately, as in any relationship, communication and honesty are key to managing your spend with agencies. Address concerns as and when you have them through regular conversations and work with your agency as a partner to benefit from their experience handling similar pressures. Money talks, and so should we.
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