NEW Whitepaper - Best Practices in Client/Ad Agency Relationships (PDF File)

Mercer Island Group's national research study identifies the most critical factors for successful client/agency relationships. The client/agency relationship is one of the most unique and complex relationships in business. While both sides are seeking to drive business through marketplace communications, varying communication styles, conflicting feedback, unclear expectations and emotions are just a few of the reasons why client/agency relationships are not excelling. Agency and client experts from a variety of disciplines and viewpoints were interviewed to best identify the best practices that could be implemented immediately, both at agencies and clients, that would greatly improve the client/agency relationship. Participants included:

Professional Service Industry Billing Practices (PDF File)

Negotiating lucrative service agreements has become increasingly challenging for professional service firms. Financial pressures affecting the worldwide business environment continue to intensify and the impact of economic pressures has led to cost-cutting measures as clients have increased their scrutiny of professional service firm compensation models. With corporate procurement departments becoming more involved in managing professional service firm relationships, there are new negotiation and communication challenges for professional service providers often resulting in even greater downward pressure on fee rates.

Mercer Island Group’s national Q1 2005 research study identifies key trends and issues pertaining to professional service firm compensation models. Interviews were conducted with senior industry leaders involved in professional service firm negotiations representing viewpoints of professional service agencies, corporate procurement professionals and other industry experts. Procurement professionals from a wide variety of large corporations were interviewed to give a balanced view of existing procedures and future trends. Participants included:

The results of the study, included in the free report, examine a variety of methods used by professional service firms to define value of services and gain suitable compensation. Furthermore, the study examines how communication and interactions among professional service firms, in-house marketing departments and corporate procurement professionals can be configured for fair and successful negotiations.

Top line study conclusions include:

• There does not appear to be any dramatically improved sell-side billing model on the horizon for professional service industries. PR and advertising agencies in particular are largely reactive in their attempts to work with procurement.

• Unique billing models may actually appear to be at odds with the procurement process. Therefore, unique billing models may not be “customer focused.”

• Procurement involvement will become increasingly intense and common before it becomes more manageable. Nonetheless, professional service firms can mange the procurement process effectively by hiring staff that have experience working with procurement and by the development of a proactive game plan.

"If the person you're dealing with isn't an expert, that can create damage.  Procurement needs people on board who don't think of advertising as a commodity." - Ad Agency

• PR in particular is losing ground by not being able to define the monetary value of its services and senior mind power. Law and accounting firms have cracked this code, but likely not in an immediately transferable manner.

• The large holding companies (WPP, IPG, Publicis, Havas, etc.) in the marketing services arena may be best positioned to succeed. They are investing in developing best-in-class negotiation capabilities. They bring an added twist to integration that some procurement departments want and need by building “best -in-class” teams for major clients from across their agency network. These firms are developing skill sets and knowledge of how to navigate the procurement mill that other firms have yet to address.

Mercer Island Group’s billing practices research study is available free of charge. You can download the study by clicking here or by clicking on the survey title above.
 

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Whitepaper - Public Relations Agencies: Organization For Success (PDF File)

An in-depth and ground breaking study of 9 leading Public Relations agencies focused on organizational change to optimize go to market strategy for both short-term and long-term agency growth.

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