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Home » Evaluating your ad agency’s performance? Here’s how not to do it.

Capitol Communicator has a post by Ron Owens, President of Ron Owens & Associates, on new business presentation tips.

Evaluating your ad agency’s performance? Here’s how not to do it.

by | Apr 27, 2022

By Ron Owens

As a long-time agency principal, marketing consultant and advocate of agency evaluation, I see both good news and bad news on the agency evaluation scene. 

The good news is that more advertisers / clients than ever are now formally evaluating their advertising agencies. The dramatic growth in the past 25 years reflects a recognition that the usual day-to-day assessments of agency performance is not enough. Good management practice demands a more formal audit, a longer-term perspective. Many advertisers also see in such a formal evaluation an opportunity to improve productivity and to prevent unnecessary – and costly-agency divorces. This trend to more professionalism is encouraging.

Furthermore, I believe the growth in evaluation will accelerate. One reason is that chief executives will demand it, especially during these times when greater cost-saving and efficiency are sorely needed. Already, many CEO’s – concerned about the apparent decline in advertising productivity – are asking: “How do we know our agency is doing a good job? Are we getting our money’s worth? Is our agency the right kind of agency for us today?” A well-planned, objective evaluation can answer these questions and identify opportunities for improvement.

Another reason for accelerated growth is the rash of recent mergers. When two advertisers merge, a reassessment of needs and relationships is inevitable. Likewise, when two agencies merge, clients of the two merged agencies will need to appraise the strengths and weaknesses of the new organization.

Now for the bad news. I see little evidence that the growth in agency evaluation has appreciably cut down the incidence of client-agency divorce. The recent increase of major account shifts is a case in point. Most of them, I am sure were prompted by tough competition and some declining sales and profits. But top-management pressures, “cronyism,” changes in key personnel and aggressive new-business overtures by other agencies undoubtedly contributed to the turmoil.

I have drawn three conclusions:

The first is that almost any kind of constructive evaluation of an agency’s performance is better than no evaluation at all. But the operative word is constructive

Secondly, even constructive evaluations can be improved, many of them significantly. Too many evaluations don’t live up to their full potential.

My third conclusion is that the reason why agency evaluations aren’t as productive as they could be is that too many of them suffer from the following five serious weaknesses:

  • They rely on simplistic numerical scores of one-word ratings that fail to provide an in-depth, perceptive examination of problems, their causes and constructive solutions.
  • They focus on short-term operational problems, often ignoring the fundamental strengths and weaknesses of the agency as a whole. They look almost exclusively at the day-to-day problems and frustrations relating to a single brand or service. They seldom examine the more important issue of the agency’s overall experience, resources, accomplishments and potential.
  • They lack objectivity. They look at what’s wrong with the agency, seldom at its strengths. More important, they look only at what the agency needs to do – not at the advertiser, might do to provide better direction, improve communication and procedures, and build mutual trust and respect.
  • They overlook the opportunity to improve “creative sensitivity” on both sides. By “creative sensitivity” I mean having perceptive insights on customers’ needs and interests and an understanding of how images of unique value are built in the mind, what motivates people to buy, the ability to perceive the creative implications of a piece of research or an ingredient, a feel for emotion or mood, the ability to sense the total impression registered by an ad or commercial – rather than a too-liberal analysis of each word or visual by itself.
  • They discourage candid discussion of the problems the agency encounters in working with the advertiser. They do not encourage the agency to offer suggestions for improving productivity on both sides.

A well-planned, objective agency evaluation can determine whether the advertiser has the right kind of agency to meet evolving needs. If so, it can demonstrate that it is usually far better to correct problems on both sides than to fire the agency and run into the same problems with a new one.

A properly structured evaluation, by getting top management more deeply involved, can provide reassurance that the company’s advertising – both sides – is in good hands. Above all, it can minimize unwarranted agency changes.

Capitol Communicator ad agencies neglect their people

Ron Owens is President, Ron Owens & Associates, specializing in market development, branding, diversity, equity and inclusion. A former Director, Worldwide Advertising & PR, Pitney Bowes, a Fortune 500 Company, Ron served as VP, TMP Worldwide; VP, Bozell Worldwide; Co-Founder / Principal, LMO Advertising; Past President, Ad Club of Metropolitan Washington, DC; Governor, 4A’s Region III; Lt Gov, AAF Region II; Committee Chair, ANA and Vice Chair, Better Business Bureau. Ron can be reached via Ronowens221@yahoo.com.

     

About the Author

Capitol Communicator and sponsors host various guest postings on relevant topics of interest to the advertising, marketing, public relations and media professional community that Capitol Communicator serves.

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