‘Trust is an issue between clients and agencies’

Pricing issues and strategies to navigate between marketers and agencies took the spotlight when industry heads came together at the e4m Confluence to debate on the topic - Money Matters: Can marketers and agencies rebuild trust?

On the panel were Karthi Marshan, Principal, Marshan.ink, along with Anand Chakravarthy, Chief Growth Officer, OMG, Jai Lala, CEO, Zenith, Vikram Sakhuja, Group CEO, Madison Media and OOH, Madison World, Loveleen Sehrawat, CMO and CXO, WiZR and Ankit Desai, Head – Media, Digital Marketing and Brand PR, Marico.

“There is a big challenge for clients because they also want agencies to look at the top line and account the agencies for cost pressures. Do you want your agency as a partner or a vendor? That’s the thin line they keep jumping around,” Lala said on whether trust is an issue between clients and agencies.

Sakhuja added, “In any good marriage, trust and respect are the two cornerstones of the relationship. Has it corroded over the years? Yes, it has. Going deeper, from a client standpoint there is a lack of disclosures, which makes them ask questions. From the agency's perspective, they feel its hypocrisy from the client side which leads to saying something, doing another.”

Highlighting another challenge, Marshan said agency folks are paid peanuts but is that the case on the client side as well?

Sehrawat shared, “That is true. Even in my old days, we committed suicide. We split the business from creative to media, then in media we split the business from digital media to mainline media, and then OOH went separate. Now in creative there is social, digital content. What have we done? Earlier we had to pitch for one client and get their whole business, now we have to pitch for the same client six times!”

“Overheads aren't managed too well either and it can't be managed well beyond a point due to the constant need of upscaling the workforce, and the dynamic media game,” she added. 

As a solution, Marshan believes the only way to reduce this mess is by getting all the concerned parties in a room and asking them to be brutally honest about the money matter and deliverables involved.

Chakravarthy opines that the first point is - does media and advertising contribute to sales? Of course, it does otherwise. Brands would not be spending money on it. So, if brands were ready to pay x amount of money a few years back and they pay 25 per cent of x now it means what agencies do drives their business but it has decreased over time. If a business like Wunderman Thompson can get shut down, it can be any one of us. What is important is we have to do something significantly impactful with changing times, whether or not ISA or IBDF directs us to. 

Towards the end, Marico’s Desai explained, “It is more of a chicken and egg story. And what is it that our creative teams are unable to deliver to our brand teams? Does the agency’s talent create so much value when the brand cannot live without them?”

“We need partners that come in and deliver value for us. Only then this discussion makes sense,” Desai said.