MedAdNews: Agency relationships, by the numbers

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Sue Lipinski
Sue Lipinski, TGaS® Advisors, a division of Trinity

When we are out talking to brand leaders and benchmarking pharmaceutical firms, we hear repeatedly that they have just made an agency change or are about to put their work out for bid. Most pharmaceutical brands are really happy with a handful of their agencies, satisfied with some, and not too thrilled with one or two.

TGaS® Advisors uncovered four areas to watch in 2019 through its benchmark-based consultancy:

• The rise of internal agencies in pharma has put additional pressures on agencies to execute flawlessly.

• There is a distinct difference between having a great relationship with a brand and “getting too comfortable” with a brand.

• If you have a seat at the table, it had better be a useful conversation.

• There is an increase in demand for the next-generation brand and agency marketers; the status quo is not delivering.

A common theme that is table stakes for agencies these days is to deliver what you said you will deliver on the timeline we agreed to. According to the most recent TGaS Internal Agency Landscape:

• Over 55 percent of pharmaceutical companies have internal agencies.

• Of those internal agencies, 64 percent are providing design services, not just derivative content.

• Compared to other “trend-worthy” items such as predictive analytics and AI, the use of internal agencies has had the greatest impact on marketing.

These internal agencies continue to be more cost-effective, with a faster speed to market than the traditional agency model. And the savings to both time and dollars can be … game-changing. Not to mention, almost all brands are using them in some capacity these days. So, the story is, there is almost no room for error these days for agencies.

Another theme is that complacency is the ultimate relationship killer. A lack of new thinking and status quo is one of the top reasons agencies are replaced. The feeling that the client has been deprioritized, that new ideas are not being brought forth, and a lack of urgency chips away at a strong foundation and can lead to dissatisfaction. For example, here is a direct quote in the TGaS Vendor Insights database about an Agency of Record (AOR), which was replaced soon thereafter:

“They consistently have shown a strong understanding of the therapeutic areas we work in along with consumer insights. There have been some challenges, however, in the past six months around satisfaction with the creative ideas brought forth which required numerous rounds of re-work. Additionally, there has been some lack of flexibility and creative thinking around achieving last minute requests or changes in direction. Not sure why, but we have not been on the ‘same page’ as consistently as in the past.”

Of the most frequently utilized and rated AORs in the TGaS Vendor Insights database, about 30 percent are rated as highly recommended, leaving about 70 percent that were “Good to OK” or just “meh.” The message here is that relationships will get you only so far; that in 2019 agencies are going to have to dazzle and outperform like never before.

We expect to see a rise in the general marketer in 2019. Having deep expertise in a particular facet of marketing – say media, digital sales aids or SEO – is a great starting skill set at any agency. But, brand marketers are charged with bottom-line fiscal responsibility and are paying more and more attention to which roles are funded and how much allocation (aka dollars) these roles have. According to TGaS data, the average number of roles per brand supported is 25, so the days of bringing multiple people to the table for a conversation are limited. Agencies are encouraged to cross-train employees among multiple disciplines, and, to deserve a seat at the table, personnel are expected to have an integrated view of how marketing impacts the bottom line.

Lastly, leading pharmaceutical companies are making a concerted effort at cultivating their rising stars, and what they are looking for is a well-rounded skill set. Within the brand teams themselves, the talent they are prioritizing have a variety of experiences – multiple therapeutic areas, global marketing, managed markets, training, multichannel instead of only deep expertise within one category or target audience. And the number one thing on their list? Business and financial acumen. A good idea is no longer enough. Agencies, brands, and commercial analytics organizations are working closely together to develop proof of concept business cases for innovative ideas. The most highly regarded agencies bring forecasted impact to the table when they are presenting a new idea. Imagine that the brand manager or brand director needs to take an idea to a franchise head for approval. How does the end justify the means?

Sue Lipinski is executive director, omnichannel marketing, TGaS® Advisors, a division of Trinity.

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