In the new world of marketing, Return on Investment (ROI) has become a key performance indicator for marketing managers. The shift is towards a real-time approach to evaluate how well marketing strategy is working, and how and where money can be best spent. Ideas are still the foundation of creative strategy, but it today has to match the medium of advertising – and most importantly, deliver the goods.
BUDGETING FOR TRADITIONAL V/S DIGITAL ADVERTISING
Digital spends have started carving out a bigger chunk of the advertising pie. But it is not just the incremental monies that are increasing. No longer do traditional/mainline ad agencies monopolize the client’s time on planning for a campaign. Most clients who have realized the digital opportunity involve their digital agencies right from the beginning of a launch/campaign. Joint meetings are held for the briefs, and thereon for shaping the entire campaign. And given the spread of digital work, often enough more time is spent in doing spadework together with the agency on all the digital touch points, and the customized communication that one needs for each.
SO CAN DIGITAL AGENCIES DELIVER BETTER
A specialist digital advertising firm thrives on digital business. Your business is critical to digital outfits, and as a result there is no choice but to be very responsible for delivering returns. Work with a digital arm of a large advertising agency, if you can treat the digital arm independent of how you treat the mainline. Expect a common spread sheet for budgeting, measuring deliverables, and you risk undermining the extent to which you can exploit digital power.
IT IS SIMPLE MATH
If your overall advertising spend has anything less than 10 per cent on digital, but natural that your full-service agency will be biased towards the medium that has the higher spends. Unwittingly digital work can get a step-motherly treatment, even if the top brasses of the network realize that digital is the next wave. This is simply because right here, right now, the team that’s working on your project has to act on the entire budget allocated to them. With campaign pressures, it would be very difficult to focus on deliverables from the smaller of the campaign elements, however critical it might have appeared at the start. Even you as a client, may allow digital to take a backseat since the agency is finally going to be measured with the total scores on the report card.
HOW CAN YOU HELP YOUR DIGITAL AGENCY TO DELIVER BETTER ROI
Considering that you have indeed allocated smaller of the budgets to a digital agency, the best way to help the one who is working for you is by giving them a better leverage on budgets by centralizing the work on all your brands with a single agency. So other than having better understanding of the digital medium, the need for the digital agency to deliver, bigger budgets that result due to centralization can give your agency better economies of scale, be it related to optimization of media budgets, dedicated resources on your account, investing in research, tools, etc. A single AOR for digital medium for all the brands can help securing the volume the agency will need, and will finally benefit you as the client. Clients can also get better rates having consolidated their business and assuring revenue to its digital agency, all finally resulting in better ROI.
DIGITAL AGENCIES WORK WITH SMALLER OVERHEADS
Mainline agencies that have been around for a longer time, and have managed to build layers of cost that add to their overheads. Moreover digital work is often outsourced by the larger agencies, and they do add their premium to the costs actually incurred. Digital agencies have largely emerged only in the last decade. Since budgets have always been smaller for digital work, specialist digital agencies have learnt to keep their costs in control, being wary of large sized conference rooms, work stations, walled cabins, limos for their top brass, and all the perks that may have come with it. A purchase manager while negotiating and justifying why he paid more for a mainline agency simply stated that it was fair because of the overheads they had, siting the office location, the size of their office, etc. Really, it is time to step back and take a look at the amount of investment that is going into addressing nice-to-haves that your brand might not be in a position to address today.
CREATE COMPETITION & BENEFIT WITH HARDER WORKING AGENCIES
By keeping two separate agencies for traditional medium and digital medium, you do keep both your agencies on their toes. Larger agencies are waiting to grab the digital business, and the smaller digital agencies just work harder to deliver and build client relationships and incremental allocations of budgets as well as keeping any competition at bay.
Your advertising rupee will really turn to be the investment it is meant to be, and not an expense that it often turns out as, if done with the 3Rs – Right medium, Right budget & Right partner