In a recent “Choosing the Right Ad Agency,” report covered by AdAge, 600 marketing executives from the largest advertisers in the country provided their feedback on agencies. Somewhat hidden in all of the interesting tidbits from that report, one metric jumped out at me in particular:
“63 percent of marketers admitted that they are not willing to share meaningful KPIs with their agencies.”
Ken Pearl, the CEO of Advertiser Perceptions, which conducted the study, was quoted in the AdAge article, saying, "For an agency to be successful, marketers need to share useful information.” Because this is challenge we repeatedly encounter with clients when trying to revamp case studies and generate new business interest, this fact in particular stayed with me. I find it surprising that so many marketers have an issue with sharing meaningful KPIs. Why do they take that position, and can it be changed?
Why won’t marketers share meaningful KPIs with their agencies?
Some years ago, Ad Age published an article about marketers and agencies battling over data ownership. At the time, the issue was that clients were unwittingly giving away control of their data to agencies, who were sometimes reluctant to share it with the client or other agencies. Likely as a result of the power dynamic that led some agencies to withhold client data, it appears marketers are now more inclined to control their own data management tools. They may also be more likely to include provisions on data ownership in their agency agreements. So perhaps it is prior overreach on the part of the agencies that led to marketers’ unwillingness to share KPIs with agencies today.
Agencies’ reputation for being tone deaf on business results
In 2016, a Forbes article listed the ways agencies were putting themselves out of business; one of them was “Agencies Don’t Know How to Measure What They Do.” In other words, agencies don’t know how to tie their work to business outcomes and quantify their results in a meaningful way. The author, Keenan Beasley, wrote:
“For far too long, ad agencies have avoided the analytics business. Instead, they’re interested in creativity and enamored with winning awards. As [Michael Farmer, CEO of Farmer & Company] puts it, ‘agencies continue to cling to the notion that clients want creativity and service, but what [clients] really want is shareholder value. Agency executives have been completely deaf to the economics.’
Creativity still matters, but unless you can anchor the discussion in measurable data and results, your creative idea is worth nothing.”
But what can you do, how can you quantify results when your agency isn’t given access to meaningful KPIs?
Back in 2012, The Fournaise Group did a study which found 80% of CEOs believe marketers are too disconnected from companies’ financial realities. 78% of CEOs thought marketers too often lose sight of their real job: to generate more customer demand in a business-quantifiable and measurable way. In late 2017, brand new agencies (like TBD, which we wrote about here) were still positioning themselves as an answer to the gap separating business strategy and creative strategy. Which implies the issue is still a common one and is far from being adequately addressed.
Lack of access to data impairs agency new business potential
In my experience, agencies today tend to be aware of the need to communicate results in a way that goes beyond fluffy metrics like social likes, social shares, impressions, and conversion rates. There is a general awareness that marketing results should be translated into business results so that the bottom-line impact is clear to the C-suite.
One of the main challenges we see agencies facing today when we work with them to develop a new business generation strategy are weak case studies that are short on (or altogether missing) business results. Agency leaders are often aware of the problem, but inevitably what we hear is that the client doesn’t want to, or is unable to, provide them with the data they need to demonstrate the impact of their work.
Access to data is something that should really be written into your contracts and agreements with your clients at the start of an engagement. Part of your planning process when you are working on a project or campaign should always be how are you going to track results in a way that is clear and compelling for your client, and for future potential clients. When you can’t get access to those metrics, it hurts your ability to generate new business interest in the future.
How agencies are using data to win new business
It’s not just case studies. Databox wrote at length about how agencies they know are ditching generic powerpoints in favor of more data-driven strategies. They did a very small survey of 17 agencies, but 100% of them indicated they use data during their sales process at least some of the time. When asked if they get access to their prospect’s analytics data during the sales process, 70.6% said sometimes, while 29.4% said they always do, and do not move forward if the prospect is not willing to give them access.
Visit the article to read more about the strategies these 17 agencies use to analyze client data during the sales process to close new business.
Consider your solutions
If your agency provides relevant services, you may have an opportunity to use a performance tracking tool such as those provided by Grow.com and Hubspot.com. They provide solutions for marketing agencies to track metrics for clients. There are options to white-label these products (and others like them) for your agency’s clients, or you could even have your client register for these tools on their own, while giving you shared access.
Depending on the setup (e.g., if closed-loop sales/marketing is in place, with marketing performance tied to sales results, and lead qualification, progression, and closed new business accurately tracked in the marketing software) it may be possible for agencies to extract meaningful metrics from such tools, while the client still retains ownership of the data. While these particular tools may not be the answer for you, it may get you thinking about alternative solutions that provide a win-win for your agency and your agency’s clients.
Grow.com names these five metrics among those that marketing clients want to see:
- Marketing-originated customer revenue
- Marketing-sourced pipeline
- Conversion rate by channel
- Marketing cost per lead
- Marketing ROI
Learn more about these metrics here.
Hubspot identifies these as the six marketing metrics your clients actually care about:
- Customer Acquisition Cost (CAC)
- Agency % of Customer Acquisition Cost
- Ratio of Customer Lifetime Value to CAC
- Time to Payback CAC
- Marketing Originated Customer %
- Marketing Influence Customer %
Each of these measures require a series of calculations, and you can learn more about what they measure and how to start tracking here.
These are just some accessible examples. Hubspot lists another nine client reporting tools in their post here. Find out what makes sense to measure for your clients, what is possible, and what is realistic for your agency to track. And continue to negotiate at every opportunity for access to the data you need to help generate future revenue for your agency.
Learn how outsourcing new business can help your agency:
You may also be interested in:
- Agency Case Studies: Upgrade Your Case Studies for New Business
- Getting Paid: A Look at Agency Compensation Models
- 5 Things That Will Prevent Your Agency From Thriving in the Future
- 9 Reasons Why Your Agency Isn’t Getting New Business