Marketing brief: Why marketers are dangling the AOR carrot by asking agencies to “test” with project work

Few years ago, serial projects are multiplying, with marketers struggling to engage in the referral agency relationship. This led to a gray area where agencies continually worked with brands without the stability of long-term commitment. A similar gray area trend has been on the rise lately: marketers are asking agencies to pitch the potential to become an AOR, but they have to execute a project first. If the project is successful, then the agency can become AOR.

Some agency executives say this new trend is a way for marketers to dangle a carrot for agencies to potentially interest more stores in bidding on a project. Others say it’s more of a test before you buy approach that has become more popular over the past six months or so as budgets have tightened with the current economic climate and marketers increasingly had to prove the value of their spending.

“Project to AOR is new,” said Mekanism co-founder and CEO Jason Harris. “We have never seen this before. It’s not really a commitment from a customer. You’re not signing off on a project and saying, “If we meet these criteria, we’ll become AOR. It’s more of a handshake agreement that if we both like to work together after a project, then we’ll convert to AOR. You cross your fingers.

Laura Stayt, president of integrated boutique Zambezi, said she believed the emerging trend was an example of the story of the death of the go-to agency relationship being flawed. Although there was an emphasis on project work, this project offer to AOR is an example that it is not as “black and white” as AOR or the project, she said. declared.

Economic uncertainty likely spurred this trend, according to agency executives and pitch consultants who have observed it.

“New black marketers need brand expertise and are open to ‘drive test’ agencies via project work with the ‘option to buy’ at a later date,” Colantuono said. , president of the pitch consulting firm AAR Partners. “All of this is in line with the fragile economic environment and uncertain times.”

Colantuono continued, “AAR Partners is now managing reviews where there is a brand house involved, but is only beginning the relationship with two of those brands plus project work on others with the dangling carrot of organic growth. over time. As long as agencies are discerning about the brand, the business, and opportunities for growth, project work is a great way to test both sides of the relationship! »

Agency executives say they lived through the move from the project to the AOR and did a project with the promise that it would become an AOR that didn’t materialize. Executives said when that didn’t materialize, the issue wasn’t the relationship but likely budget concerns on the brand’s part.

Lack of engagement from marketers can be difficult for agencies to manage, especially when it comes to resources such as hiring, according to agency executives. The trend is “further proof that the agency-client relationship is evolving toward a predominantly transactional relationship,” noted Rob Schwartz, president of TBWA/Chiat/Day in New York. “Soon AORs will be the exception to the norm. Yet clients are leveraging agencies more as AORs and finding cost savings in longer-term relationships,” Schwartz said.

The cautious climate in which marketers must increasingly prove the value of their service to the rest of the C-suite is likely responsible for this trend, according to agency executives, who explained that marketers are now often asked to prove something works before getting more budget released.

While the trend may be due to constraints, some see blue sky opportunities for brands and agencies.

“Everyone likes to date someone before they get married – so it’s potentially positive for both parties to start small and identify if there’s mutual intent,” said Greg Paull, co-founder and director of research consultancy R3. “Brands err on the side of caution before committing too much to a single partner — and likewise, there’s nothing worse for an agency than a toxic client.”

3 Questions for Jodi Allen, Director of Global Marketing at Behr Paint Company

How do you reach the younger generations?

With Millennials and Gen Z, there is a very big opportunity as we think about this next generation of owners. Millennials and Gen Z are really important as we look over the next few years, they’re going to be, really, the #1 group in buying new homes.

From a TV commercial [perspective], connected TV is obviously a huge opportunity to really put yourself forward from a streaming point of view. It is certainly an important element of our strategy. Lots of social networks, Instagram obviously, but obviously TikTok is one that also stands out. It’s really about making sure we’re where they are when they’re looking for inspiration.

There are concerns about TikTok within the government. Does this impact how Behr uses the platform?

TikTok is obviously the one we really experimented with, if you will. There are obviously security and privacy challenges as we think about a variety of social platforms. So that’s something we’re definitely monitoring, working very closely with our media partners and making sure we have a good pulse on it. When I think of our marketing efforts, it’s a channel. But we have a wide variety of channels when we think about how we’re targeting not only the Gen Z and millennial consumer, but we obviously have a lot of consumers across different generations.

There are a lot of DIY content creators out there now. How do you tap into that?

We recently launched [the #behrtodiyfor hashtag] series. It was a fun new opportunity for us to be able to, in a very relevant way, create content, make it a bit more competitive, and really engage with millennial and Gen Z audiences. Ultimately, what what we do now is take that content and create procedures [videos] so consumers can create that experience, if you will, in their own homes. — Kimeko McCoy

In numbers

The role of the CMO is constantly evolving, especially as today’s economic headwinds have marketing dollars under more scrutiny than ever before. Over the past 12 months, 74% of CMOs said they believe there has been a change in the role they are expected to play in driving growth, according to a new survey from marketing consultancy Chief Outsiders. Find a breakdown of the report below:

  • 73% of marketing directors believe they are better perceived by CEOs than in previous years.
  • 84% of CMOs believe the economic and business climate over the next 12 months will negatively impact business goals.
  • 75% of CMOs believe there has been a permanent shift in the way CEOs view CMOs as engines of growth. — Kimeko McCoy

quote of the week

“The era of creators as creative directors has arrived, and it will only continue. This trend is an evolution of the collaboration model in product marketing, which positions creators as innovators on behalf of brands. will not eliminate the modes of influencer marketing that preceded it. It is a ‘yes and’ extension of how brands and influencers work together today.”

– said Sadie Schabdach, Dentsu Creative evp of influencer marketing, when asked about brands using influencers as creative directors, consultants, etc..

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