In June of this year, we released a comprehensive guide for mid-market agencies looking to thrive in 2019. This is the second article in our 5 part series that will detail the research results and our extrapolation of the key insights that continue to be relevant as we wrap up this year and head into 2020.
Often people may think that the larger the company, the more likely they are to win business. They’re potentially more well-known, they have larger teams available to work with clients, and with a larger customer base likely have a larger repertoire of experiences. This kind of theory holds true for larger holding companies when it comes to digital agencies in the market.
With all of this in mind, based on our research with Advertiser Perceptions, it turns out there is still a plethora of potential for mid-market agencies to win, because of their size and ability to build relationships with their clients. We will take a deep dive into what this relationship looks like, and where there is a clear opportunity for mid-market agencies to thrive.
There is no silver bullet to the agency-client relationship but there are ways to strengthen the relationship based on some actionable insights. And oftentimes, it is easier to discern how the relationship is defined when you are on the outside looking in. That, however, is not a luxury most agencies have.
To categorize the agency-client relationship as straightforward as possible, 4 types of agency-client relationships were described in an AdWeek article as being on either side of a spectrum of crappy and great. The pendulum swung from:
- Crappy agency with a great client.
- Great agency with crappy client.
- Great agency with a great client.
- Crappy agency with a crappy client.
Every agency and client sets out to achieve the great agency with a great client partnership. It goes beyond a relationship to being “partners in crime”—aligned in their ambition to create long-term brand value, shape culture and sell a lot of products along the way. Marketers see mid-market agencies as having a unique value proposition: capital created through social interaction. They are able to better connect with clients because they have the time, desire and bandwidth to build a relationship.
Mid-market agencies build relationships with their clients, provide a feeling of partnership that emerges through cultural alignment, transparency, trust and communication. According to our survey, these mid-market agencies are twice as likely as larger holding companies to perceive themselves as partners to their clients. To be exact, 61% of marketers view mid-market agencies as partners, over only 33% who view the larger holding companies as partners.
Being perceived as a partner rather than a vendor has a number of advantages. Marketers believe mid-market agencies offer:
- More access to senior leadership with more stable teams.
- Personalized service with opportunities for client influence.
- Agile responses to client needs.
The contrasting approaches to the brand-agency relationship may be reflected in the business strategies of mid and large agencies. Mid-market agencies place more emphasis on retaining and growing existing client relationships, whereas holding companies prioritize the acquisition of new clients. As seen in the chart below, mid-market agencies place more emphasis on retaining and renewing existing accounts — with 76% of their success criteria being built on this.
A close second to that is their desire to expand engagements with clients, demonstrating their desire and ability to build on the existing relationship, rather than simply chasing new accounts. Larger agencies are viewed by marketers as lacking this level of partnership and account servicing. There is a sense that, despite a wealth in resources, the larger agencies do not give due attention to their smaller clients or divert adequate resources to meet their needs.
Since mid-market agencies are interested in building a partnership with their clients, they are better equipped to act as consultants to their clients. This comes with a more comprehensive understanding of the brand’s offering and needs in the market. As a result, 91% of mid-market agencies are more likely to perceive themselves as providing strong consultative capabilities compared to holding companies, therefore holding a greater advantage.
As marketers value the intangibles of a transparent, high-touch, fluid, culturally-aligned partnership, mid-market agencies have the opportunity to win big. If you can build on these relationship elements and build synergy with your clients, you will have a greater chance of success.
“We’re not looking for a vendor. I don’t want someone that’s just an order taker. I want collaboration. I want strategic thinking. I want someone to tell me that I’m wrong, particularly if it’s true. I want someone that’s going to bring new ideas.”Senior Director of Digital Marketing, Financial
The Drivers of Agency-Client Partnerships
In addition to the trifecta above is defined as “transparency, trust and communication”, the study revealed key drivers to establishing, nurturing and maintaining the agency-client partnership. These are the areas where mid-market agencies can really up their game to set themselves apart from the competition.
1. Cultural Alignment
Fundamental to successful brand-agency partnership is cultural alignment—a feeling that both sides have “skin in the game”. Marketers highly value agencies that are proactive, come to the table having done their homework or that take the time to look forward and identify potential pitfalls.
2. Deep Experience
This is table stakes for most marketers. Marketing strategies—from awareness and acquisition to engagement—are different in healthcare than they are in automotive. Marketers expect the agency team to be experienced in the marketer’s category, understand their pain points and keep up with evolving consumer trends.
Not only does this influence everything from data to creative, but there is an expectation that the agency partner will share and apply this knowledge. How you would get to know your potential partners is similar to how you would get to know your customers when building a vertical targeting strategy.
3. Exceptional Attention to Detail
Marketers prefer agencies that react quickly during campaigns. Even seemingly minor details, like responding promptly to an email, reflects well on the agency and cements the strength of the partnership.
Marketers see meaningful benefits in the level of transparency and communication that comes with a close brand-agency partnership. They appreciate that there are fewer black boxes in the agency’s processes, especially around pricing. There is also an opportunity for increased candor and honesty on both sides. Agencies are encouraged to be active voices and to speak up if they see client movement in the wrong direction.
If mid-market agencies can level up in cultural alignment, brand experience and attention to detail, the opportunity to win more business over larger companies is immense.
In case you missed our first post, 6 Tips To Ensure Your Agency is Selected by a Potential Brand, you can read it here. We will be revealing more of the invaluable learnings we gained from our Advertiser Perceptions research—up next, the third installment of our 5 part series: Perception vs. Reality: Where Agencies Need to Up Their Game.
Reach out to your StackAdapt representative to get your copy of the report, The New Programmatic Era: How Mid-Market Agencies can Thrive and the The Mid-Market Agency: A Blueprint for Growth.