BEST PRACTICES IN AGENCY PERFORMANCE EVALUATIONS
Agency performance evaluations are a critical tool to help both marketers and agencies assess their relationships, improve performance and identify potential problems. There are multiple benefits provided by agency performance evaluations-to establish goals and priorities and to ensure the agency's performance is being measured and held accountable; to identify what's working and what's not and take corrective action on issues; to benchmark agency performance and contributions and assess progress over time and against other roster agencies; to provide an important component for measuring and determining performance incentive rewards. This panel of experts will discuss best practices in evaluations-including what's new and innovative-and will comment on a new ANA survey that provides a benchmark on current marketer use of agency performance evaluations.
Moderator
David Beals President and Chief Executive Officer
Jones Lundin Beals, Inc.
Panelists
Kim Courtney Director, Business Affairs
MillerCoors
Debra Giampoli Director, Strategic Agency Relations, Global Advertising Resources
Kraft Foods, Inc.
Mark Strong EVP, Group Managing Director
McCann Erickson New York
Bill Koenigsberg President, Chief Executive Officer and Founder
Horizon Media
We were encouraged to learn that most marketers evaluate one core agency at least once a year; but with the importance of integrated marketing, why exclude the creative and strategic contributions of the other agencies? Only 26% of PR agencies and 25% of multi-cultural agencies are being evaluated, and digital agencies are often overlooked as well. We agree with Bill Koenigsberg’s opinion that every agency relationship deserves to be evaluated, regardless of the level of spending. Clients owe their agencies feedback.
Current practices in Agency Performance Evaluations are based on qualitative and/or quantitative data. Quantitative metrics have a place as ongoing “scorecards” used to determine levels of incentive compensation, but they don’t provide clear direction on modifying agency and client behaviors that could improve the relationship. Qualitative evaluations, however, serve as “report cards” and can create productive dialogue.
We did not hear any panelists make reference to verbatim comments, key features that appear prominently in the performance evaluations Mitchell&McCue conducts. Qualitative scores provide good historical tracking of relationship health; verbatims, however, underscore strengths as well as surface specific issues driving action plans from both parties.
We were intrigued to find out that a majority of clients manage the qualitative evaluation process internally, in one way or another. Openness and a spirit of mutual transparency are based on a foundation of trust; only with the involvement of an objective third party to manage the process and preserve the anonymity of respondents do both sides have the freedom to be truly honest. We firmly believe in the importance of an unbiased process owner, ideally a third party, but otherwise enlightened procurement.
We would concur with several panelists that qualitative evaluations must involve persons at all levels of the organization. It is our practice to give everyone with meaningful interaction in the relationship the opportunity to complete the evaluation. We also insist that both client and agency collaborate on the determination of qualitative criteria, and that agencies provide input to quantitative metrics for which they are measured.
As with value-based compensation, Mitchell&McCue has a problem with a “cookie-cutter” approach to the process. Evaluations must be customized to both the relationship and the particular discipline, and should result in tools with which both parties feel comfortable. We feel that it is important to first optimize the qualitative evaluation process of the agency, build the required trust, and then consider if doing a 360 evaluation of the client makes sense and adds value. The panel seemed to reach consensus on 360 evaluations being an industry standard, although agency representatives voiced apprehension; we do not agree that 360 is necessarily an industry standard or always a best practice.
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