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Agencies: Hate Project Work? Act More Like an AOR.

Most agencies hate project work because it’s less predictable and harder to manage and staff. What’s more, agencies believe project work negatively impacts the agency-client dynamic, with agencies treated more like vendors than partners, and their contributions focused on tactics rather than strategy. The relationship can feel transactional and shorter-term.

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Agencies: Hate Project Work? Act More Like an AOR.

And in truth, many agencies have experienced business declines as project work has increased. In my view, these declines are not from an increase in project work, but more about the detrimental way agencies respond to it, such as:

1. Managing project budgets in isolation. Of course, this is the very definition of a project-based relationship. Each project is budgeted and managed independently. For clients, the intent is to increase the transparency of agency costs, help them better manage their budgets, and determine the relative value of tactics. Agencies that have embraced this model are carefully managing every change in assumptions, thereby triggering a budget increase.

So is it a win-win? This approach’s upside is that it holds clients accountable for any changes, ensures proper staffing, and often drives revenues and profits.

It could be a win-loss. The downside is that it ignores the fundamentals of client-agency relationships. Each transaction does not exist in isolation. Each is part of a broader context that includes everything that came before, and everything expected going forward.

The focus on budget encourages many agencies to discuss compensation before anything else. The message clients receive is that the agency’s business is more important than the client’s and that the agency does not value the relationship.

I once worked with an agency that lost a very large account after the client asked for additional framed copies of an ad, and the agency responded by preparing an estimate. The agency allowed $200 framed ads to blind them to the larger picture.

2. Staffing each project independently. Agencies may argue that the shift to projects has made it more challenging to staff. True, it can be difficult to predict needs longer term and account for peaks and valleys in the work. These agencies use the increase in project work to justify continuous staff shifts to maximize utilization and maintain margins. Unfortunately, this approach causes agencies to give up a critical competitive advantage—brand knowledge.

Historically, agencies have maintained staff on an account over time. Changes were orderly and viewed as natural transitions. Agencies often helped onboard new clients with everything from competitive reviews to brand history, which clients valued and appreciated.

The current pick-up game approach to staffing is less efficient and prone to error since the staff is not expert on the brand. This practice reduces the cost of clients changing agencies since they are likely to have to onboard the agency team, current or brand new.

3. Managing the project, not the result. Many agencies handling projects consider their work complete when they hit “send” on a deliverable. The client is left to determine if the project has met its objectives, or if refinements are needed. Agencies argue that they are not being paid enough to stay involved in the project or monitor its effectiveness.

Again, it’s a missed opportunity because evaluating performance is a chance to demonstrate the agency’s commitment to the brand and identify opportunities. It also ensures that the agency will be tapped to build on the work going forward.

So what should agencies do? Act like an AOR. Think of it as new business without the competition. Staff the brand as consistently as possible and require staff to know the client, category, and brand. Offer market monitoring and program evaluation as standard operating procedure. Even if clients are not willing to pay for them, the incremental work they generate will more than cover the cost. Consider client requests and changes in the context of the total relationship. (As my dad says, “Don’t step over dollars to pick up pennies.”)

Finally, remind staff that clients embrace project-based work as a billing mechanism, not as a framework for the relationship.

Agencies that have a project mentality signal to clients that they are not committed to their business. Agencies that show they are committed will grow their own business.

Stacey Singer is a client retention and growth specialist. She can be reached at stacey@staceysinger.com

Stacey SingerSeptember 15, 2020