Examining the Agency Partnership

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10/05/2021

Brand marketers are relying on their shopper agencies for expertise in collaboration, strategy and execution

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When it comes to shopper marketing and omnicommerce efforts, there are no clear-cut avenues CPG companies take today in terms of utilizing outside agency partners for strategy and execution.

According to the special report, “The State of Shopper Marketing Organizations” that ran in the June/July issue of Path to Purchase IQ, we know that nearly two-thirds of CPGs are calling on their agency partners to collaborate across a number of critical needs.

Brands are increasingly relying on their agencies to bring ideas from other markets, help push their thinking and elevate their game to the next level. But how much are brands leaning on their agency partners and what exactly are they doing for them? What are the pros and cons? We wanted to find out …

Bringing in Agency Support

We asked five leading CPG marketing executives, “Which of the following types of agencies do you currently have a partnership with?” Digital marketing, creative, media planning/buying, retail marketing/in-store, social, a single shopper agency/agency of record, and/or multiple shopper agencies/agencies of record.

The answers varied, even in the largest companies. At Beiersdorf, the team ensures close collaboration with its media agency, shopper agency and shopper marketing team to leverage their expertise. “This is particularly important these days with the proliferation of retailer digital assets and the connectivity required to other digital marketing assets outside of the shopper sphere,” says Rodney Waights, vice president shopper and customer marketing, Beiersdorf.

The company’s agency partners co-create the shopper strategy and are relied on to define the campaigns and executional elements, from creative through to recommendations on tactic choice. “We expect them to truly understand our brand strategies — they sit in on our brand strategy meetings — and we definitely expect them to bring the latest thinking on retailer paths to execution,” Waights says.

The Kellogg Co. partners with outside agencies for strategy and execution. As the teams at Kellogg are building their annual plans, their agency partners work with brand teams to avoid reinventing the wheel. When building a national campaign for Frosted Flakes, for example, that same agency works with the brand team to figure out how they integrate the shopper earlier into the process. “So the idea and some of the tactics they’re planning at the national level can be leveraged down at customer team levels,” says Aaron Elleman, senior director, integrated marketing, Kellogg. “That way we’re not building from scratch, but from a base that has a shopper perspective built in.”

As the company has evolved into the shopper media space, Kellogg brought in national media agencies (in part because “customers are requiring it and it’s a big part of our plans,” Elleman notes) to help evaluate those media opportunities with retailers — one agency to plan and execute display media and another to plan and execute search media. “We’re still working against some core Kellogg’s and retailer strategies and then reach for agencies to help us create a plan and help execute that plan,” he says.

The Coca-Cola Co. has partnerships with all types of outside agencies, and while a senior marketing executive on the team says the relationships are utilized for both strategy and execution, there are some facets that are still driven from within its own walls. “From a shopper standpoint, we run oversight of our Social Center and management of the Social Center in-house, but with close engagement from our agency partnerships,” the executive says. Similarly, the team leads the management of the overall process in-house, but agency partners are on point for the translation of the strategy and creative development.

In-House or Outside?

Given the fast pace of social and the need to be always on and reacting in real-time, the team at Coca-Cola has found that having its social team and agency partners co-located is best, working together in partnership with business leads, PR, legal and other cross-functional partners.

The team at Del Monte Foods runs its own photo shoots and creates some of its own content for social efforts via its in-house digital team. “We’re also managing our own retailer media strategies and negotiations,” says Jen Reiner, senior director of omnichannel marketing and e-commerce, Del Monte Foods. Besides cost, on the shopper side, the team needs to have a direct relationship with its retailers to partner with buyers, Reiner argues, having found greater efficiencies since media agencies don’t know their retailers as well, or the objectives at each account.

Waights’ team at Beiersdorf drives the agency agenda in-house, supplementing or challenging their thinking on strategy, campaign development/measurement and execution elements. “And of course we own the decision making,” Waights adds.

It’s a true partnership on co-creation of elements, aligning initiatives with marketing, sales and other agencies and ensuring that the programs remain within budget, Waights explains. “We consider them an extension of our organization rather than a third-party agency that is kept at arm’s length. And this has been a truly successful approach,” he says.

Assuming you have the number of resources required to keep things in-house, Waights says, most still believe everything can be self-contained. The shopper marketers have complete responsibility and accountability for every element and there is one point of contact for any specific initiative, which is especially important for cross-functional teams. “And you could argue that the shopper marketers would be more invested in the success of each campaign or element,” he notes.

Using in-house resources ensures better knowledge of the brand strategies and company objectives, says Steve McGowan, head of shopper activation and strategic partnerships at Mondelez International. The other benefit is having the ability to shift or move those resources as appropriate according to updated initiatives.

And yet, having agency partners to help bring forward new technologies, partnerships and learnings is critical. “To help ensure we’re always on the cutting edge of the industry and as a facilitator for testing and learning,” says the Coca-Cola exec.

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The team at Mondelez International sees advantages to both. “They are creative specialists in that field,” McGowan says. “By partnering with an agency, we secure talent in the areas we need supported.” Additionally, by leveraging an agency that goes across all of its different clients, the agency is able to see best practices and apply them across each of their respective clients.

“They can leverage the resources of their business to ensure we’re armed with the latest knowledge to inform and guide our thinking and execution,” says Waights, adding that it is a big advantage for the oft-overworked teams. He also points to statement of income (SOI) management, which is one way of providing resources to the team and bringing different ways of thinking, specifically around creative and tactical considerations. “They [agency partners] challenge our thinking and lead us to better places,” Waights says. “Given that the agency people working on our business know our business so well, we find their thinking to be truly value-added to our objectives. Their ideas are trusted and respected.”

Using an Agency of Record

There are both advantages and disadvantages to using a single shopper agency. The depth of knowledge the agency acquires, its complete understanding of the brand as well as its retailer partners, can only serve to enhance any program’s outcome. On the other hand, some executives have seen an inability to handle a high velocity of work. “As they become part of your culture and are susceptible to your way of thinking, it can lead to complacency,” says the executive from Coke.

Kellogg’s single shopper agency of record provides connectivity to business needs across customers, brands and categories, says Elleman, adding: “The streamlined approach creates simplicity internally and drives efficiency of process.”

Waights believes choosing one agency of record lends itself to partners that are more invested in the business, because “we’re so invested in them,” he says. “They get to truly understand our business from all angles and, as a result, can make ‘more rounded’ recommendations,” Waights adds. The absence of silos (which is often the case) is especially important as the fine lines between the shopper team’s responsibilities versus marketing or sales is constantly evolving. “The ability to be the one source of ‘shopper agency truth’ for our commercial teams truly helps with efficiencies,” he says.

And if the proverbial “too many cooks in the kitchen” can be equated with a shopper marketing or omnicommerce plan, then disadvantages of utilizing multiple agencies would point to a more superficial understanding of the business and retailer. Not to mention mistakes that haven’t already been learned and a disjointed project, which may be slowed down if the agencies aren’t in lock-step with the brand. And if silos and “turf protection” creep in, many agree the result is extreme inefficiencies and incremental costs.

But, as Del Monte’s Reiner notes, it can be difficult to find one agency that has expertise in strategic platform work and on all customer-executional specifics.

When partnering with multiple agencies, executives have found a greater breadth of ideas, fresh thinking, often higher-quality creative and teams that can manage a portfolio and balance risk of work. “Different agencies have different areas of strengths, so you have an ability to shift work to agencies that are best suited for any given project,” says the Coke executive.

Executives at Mondelez believe there is enough diversity in the marketplace that it requires different agencies that specialize in creative, strategy, planning, execution, digital, etc., to get the optimal benefit of using an external resource. “We have the ability to leverage different agencies and their specialties for the different needs of the business,” McGowan says.

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