How Competitive Is Your Media Agency?
January 23rd, 2018 | ACA Team, Association of Canadian Advertisers
Many advertisers may feel like they have a good idea of how well their media agencies are performing, but what if they want some objective, outsider analysis to validate (or challenge) those feelings?
That was the motivation behind ACA’s last webinar of the year, a presentation on Canadian media agency performance by the highly-regarded RECMA. The Paris-based research organization studies and evaluates media agencies around the world to produce a ranking as well as insights on strengths and weaknesses.
“The objective was to provide our members with deep detail and insights on how well their media agencies are performing as well as how other agencies are doing in comparison,” said Judy Davey, VP Media Policy and Marketing Capabilities. “A lot of advertisers are familiar with the agency rankings that RECMA produces, and we thought it would be useful to have their researchers walk us through how those rankings are compiled.”
RECMA’s researcher for Canada, Antoni Konczynski, began the presentation by explaining how RECMA ranks media agencies across 18 key performance indicators, divided into two categories of Vitality and Structure.
Vitality includes competitiveness in pitches, for example.
“We look at who won which pitches and who lost which pitches on the year,” said Konczynski. By tallying up award wins, new business, estimated billings and so on over a three-year period, RECMA can paint a fairly detailed picture of the momentum for each agency.
On the Structure side of the equation, RECMA looks at resources within the agency, including digital specialists, diversified services along with the client profile, whether there is a mix of advertisers and if clients have local roots.
For each of the criteria within those broad categories, RECMA assesses the agency performance and assigns points against the average performance: above average performance is worth one point, far above is two points; conversely the below average performances see point deductions. Those points are used to rank the agencies.
The most recent Canadian rankings (from last July, with new rankings coming this month), had PHD, Carat, Touché, OMD and UM Canada as the top five performers.
“The agencies at the top of the rankings are obviously more competitive and dynamic than those further down the rankings,” said Philippine Lelong, head of the advertiser department at RECMA.
By providing a ranking of agency performances, marketers have a better idea of which ones to consider for possible pitches.
The RECMA research also provides clients with insight and opportunities arising from competitive shifts. By monitoring all advertiser and agency relationships, each client can know how the competition is performing.
“If an advertiser is considering an agency review, their first step is to consider who is available and who is not,” said Lelong. “Our CEO likes to call this as seeing the dance floor and who is available for the next dance.”
Similarly, advertisers benefit from knowing when competitors are looking for a new agency and when agencies may be spending time and resources on major pitches.
“Our analyses and rankings allow advertisers to make sure they choose a competitive agency which performs well,” said Lelong. And even when they are not reviewing their agencies, knowing more about the performance of their agency gives additional leverage in negotiations and to push for improvement in areas where the agency is underperforming.