Lack of Measurement and Innovation Has Turned Agencies Into 'Vendors'|

©IDG Communications, Inc. Photo contributed by Matthew Mikaelian.

Ad Age, 1/26/11

Stop Blaming Procurement — CMOs Can Help Matters By Demanding Focus Shift Away From Price

Most agencies are pretty much the same. They have the same basic capabilities. They all claim to have proprietary tools or processes. They may have different labels for what they do, but the approach and yield is essentially the same at any holding company, global agency or small agency. In an industry that exists on branding and selling an image, judging which agencies are truly “special” can be a challenge for clients.
Parity always breeds differentiation based on price. It also expedites procurement’s involvement in client-agency relationships.

Procurement came late into agency relationships, and, tellingly, when relationships were experiencing a major transition. The last two decades of the 20th century saw the gradual commoditization of agencies, fueled by the rise of holding companies, which preempted individual brands and emphasized coordination over skill. The second detrimental event was the unbundling of media from creative agencies, resulting in the fragmentation of brand stewardship. Over time, brands gave way to parity. And differentiation by quality of ideas gave way to price differentiation.

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