ROI Changing the Client Agency Relationship

More companies are demanding their ad agencies prove ROI for ad dollars.  This is really shaking things up as more ad companies are scrambling to find ways to prove their worth.  I am completely for this!  However I do wonder about the approach.  Many are moving toward the web marketers domain and trying to prove ROI in that area, which is a lot easier to do than say for TV or radio.  So this is really the easy approach, the real holy grail of ad metrics isn’t being touched yet by the majority and I am waiting to see what the industry will do to tackle the harder areas.


The really interesting aspect of this is what kind of cultural change is this going to create?  This is one of those touch points that has a ripple affect throughout the entire system.  Ad agencies are often best at the creative, I remember interviewing at a few and my numbers approach was an alien language to most of them.  They saw the value, just no in their domain, but 5 years later the market is demanding they change.  How does that impact the culture of many agencies?  We are seeing the first step, will they move further into other channels where measurement is not as easy?  In these other channels it demands a lot of creative thinking to find the right metrics.  I’ve heard of people using six sigma in ad agencies, I don’t find those of much use, we are going to see more agencies try such measures and fail, a new system will be needed, one that is unique to marketing and that has been my belief from the start.


In terms of the client side, many marketing executive demand the ROI because their boss demands it, but many marketers do not understand those numbers themselves.  So the client side is going to have to beef up on the numbers also.  This again is going to create a fundamental cultural shift.  CMO’s have the shortest tenure and I believe we are going to see a rise of the metric inclined CMO, will this help the tenure issue?  Time will tell but if I were to place a bet on it, I feel strongly it will. 


The overall impact is interesting and will continue to be something to watch for the next few years.

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Filed under Branding, Business, Marketing, Metrics

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