Becky McKinlay, Managing Director at Oystercatchers, clarifies the misconceptions around true intermediary services and highlights the essential factors brands should consider to make informed decisions when choosing an intermediary partner.
In the 5 months since I’ve been at Oystercatchers, I’ve been exploring the differences between a number of organisations offering intermediary services, the value they bring, what the future holds and how Oystercatchers can continue to lead this market.
I’ve shared a number of my thoughts and observations in individual conversations and more broadly on LinkedIn. It’s been enlightening and encouraging. But it seems there is still some confusion, and we need to get louder and be clearer.
As a client or an agency, as you consider or embark on working with a business that offers intermediary services, these areas are the important ones for you to ask questions around, and be comfortable with:
1) True intermediary services add real, tangible and ongoing value. Does yours?
Offering a list of agencies to clients for free, and then charging the agencies for the opportunity and then again if they win the work is, at best, bad practice.
Businesses that offer intermediary services provide clients with specialist knowledge, insight, nuances and advice. And they help agencies ensure clients see the best of them.
Companies that offer agencies lead generation services, or offer clients names of agencies to approach, are not offering intermediary services.
That model puts unfair pressure on agencies who need profitable work, unencumbered by penalties, to continue to deliver the best they can for their clients. We all know that there is no such thing as a free lunch so how on earth can there be free (to clients) intermediary services?
Someone is paying – and with these models the agency pays twice, which means the client also suffers. Yes, a client needs to fund a strategic intermediary service and yes, that means businesses offering these services need to justify their value. That is exactly how it should be.
So, the questions a client should ask of a partner in this area is:
- What is the value you deliver to me and my team beyond the cost of the service?
- If you are offering this service to me for free, how are you making money?
- What will the impact of your fees to the agencies we work with have on the agency we select?
- On what basis, with what knowledge have you validated the agencies you suggest to me?
And the questions an agency should ask are:
- What am I paying you for and how does that equate to value?
- Is this a one-off fee or is it ongoing?
- Does the client know we will pay you when we win your business?
- Why are you able to offer your services to clients for free?
2) Few marketing challenges are solved, or opportunities realised, by simply changing agencies. So why is a pitch being suggested?
As an industry we’re known for running pitches. And that’s certainly something Oystercatchers do very well – but mainly if the relationship can’t be repaired or because of contractual reasons.
We’re pretty good at stopping pitches, when they’re not needed or won’t help. Like any partnership, the client agency relationship is a two-way thing – and if it’s broken at one end, the other end can’t fix it. So, we hold a mirror up to our clients, suggesting operational changes, ways of working enhancements, upskilling or retraining of stakeholders when it’s needed, before we recommend a pitch. Not all intermediaries will do that because it’s not in their own business model’s interest to foster long term relationships. We are paid by our clients to offer consultancy, so if a pitch won’t help them, we won’t recommend it.
New relationships take time to bed in, and the magic only often happens after a while.
Few of us give up on a long-term relationship without candid communication or trying new approaches. And when we do recommend that a pitch is the solution, we work as hard to ensure that the pitch is run and managed well, as we do when we are talking to clients candidly about what is needed to repair the existing relationship.
Adding additional agencies with specialist capabilities or new geographical reach is another thing. The search and selection for these agencies needs to be carefully managed.
The questions we ask our clients as they consider changing or adding agencies include:
- What have you tried to fix the relationship, and why are you sure that changing agencies will solve the problem or accelerate the solutions you are looking for?
- If the relationship is so broken, why are you asking to include the agency on this pitch?
- You need a new agency to deliver X. Have you explored if any of your existing agencies can do this before broadening your search? How do you envisage them working with your existing agencies - where could the overlaps or tensions be?
- How are we going to set the new agency up for success from the outset, without rocking the existing boat?
3) The agency market is vast and very nuanced. Can a comprehensive review & operational recommendations be done by existing internal teams?
The market is also highly competitive, very people-focused and changes at pace. From a client perspective, agency stability, ability and the magic dust they can bring today and well into the future, are key. What was true of an agency a client worked with previously may have changed entirely in the elapsed time. Getting to grips with the right partner for today and well into the future takes true market understanding, time and rigour.
Commercial reviews and the appropriate remuneration structures are essential to finding the right partner. Our place in the market means we can see what works, and what doesn’t – where some short-term savings will negatively impact long term growth. Or where a new incentive structure might be the best way to move forward. And we can play a hand here fairly and evenly – we won’t be sitting in the middle of the relationship moving forward, so there’s no embarrassment or hesitation our end in exploring alternatives or asking the difficult questions.
So ask yourself, can you do and understand all the following without external, agnostic advice:
- Who’s in the market who might be able to help you? That includes the ones that have been recommended by respected colleagues, the ones who have recent relevant campaigns and high profiles, the newcomers, the ones that have merged or rebranded, the ones that are new in market, and the ones you really want to work with but who can’t work with you for competitive or commercial reasons. As a client dealing with strategy, budgets, teams and day-to-day activities, can you really do this by yourself?
- How can I be sure I’m getting the right effort, the right rates, the optimum value from my agencies? How can I benchmark our relationship with confidence across the industry, the market and the services we need?
- What guarantees do I need to make sure this relationship can build – and how do I know the agency can really make them?
- Is this a fair price for the service, skill set and resourcing I need. Will I continue to be a priority for the agency?
4) Training and upskilling is key to success.
We’ve seen where things have gone right, where they go wrong and the skills gaps in client businesses and in agencies. We’ve worked for years to help elevate standards and share the practices that work. We offer these services both formally when needed, and informally, in the way we interact with the industry.
On a personal note, it makes me really frustrated that many agencies pull back on internal training because they have been squeezed in other areas. A third party adding a kick-back fee for lobbing a brief over the fence and reducing their margins means agency staff training may suffer. And client-side, changes in structures, business priorities, headcount pressures mean that many marketeers have not onboarded new agencies before, are not comfortable with creative conversations, or know they need support in delivering the best possible briefs.
Please ask yourself, and your colleagues (or us):
- Are your marketers fully equipped to run the pitch, with or without external support?
- Do your agency teams really understand how their specialist practice works in conjunction with the other marketing priorities
- If the agency I select is having to pay a fee for winning our business, what is going to suffer?
So yes, an intermediary comes at a cost but a cost that delivers value. That value needs to be explained clearly and transparently.
At Oystercatchers, we welcome conversations around this and we have a clear stance.
- We don’t believe that after weeks of preparing detailed responses, often with creative and strategic costs involved at no cost to the client, that an agency should pay commission to a third party with limited involvement, for the work they are best placed to deliver.
- Where clients do engage on a ‘no fee’ basis with an intermediary, they are still incurring a cost, albeit a hidden one. Please ask who you are thinking of engaging where the % commission paid will hit you as a client – because it’s likely it will and likely in an area that impacts you significantly; in the investment the agency is able to put to helping your business grow, in the experience of the team they commit, in the training they offer or the investment them making in technology.
- To our mind, the model that works allows for the foundations for a long-term partnership of respected equals to be established. That’s what the industry deserves.
Oystercatchers exist to be in service to the industry. To help connect, uncover and upskill. By answering the hard questions and by being open and transparent, we will continue to elevate standards and celebrate success. To find out more about how we can help you, get in touch.