Marketing Briefing: Why marketers are dangling the AOR carrot by asking agencies to ‘test drive’ with project work

By Kristina Monllos

A few years ago, serial projects were on the rise, with marketers having a hard time making the commitment to the agency-of-record relationship. That led to a gray area where agencies were continually working with brands without the stability of the long-term commitment. A similar gray area trend has been on the rise of late: Marketers are asking agencies to pitch for the potential to become an AOR, but they have to run a project first. Should the project be a success, then the agency can become AOR.

Some agency execs say this new trend is a way for marketers to dangle a carrot to agencies to potentially get more shops interested in pitching on a project RFP. Others say it’s more of a test before you buy approach that’s become more popular over the last six months or so, as budgets have grown tighter with the current economic climate and marketers have had to prove the worth of their spend more and more.

“Project to AOR is new,” said Mekanism co-founder and CEO Jason Harris. “We haven’t seen that before. It’s not really a commitment from a client. You’re not signing onto a project and saying, ‘If we hit these benchmarks then we become AOR.’ It’s more of a handshake agreement that if we both like working together after a project then will convert to AOR. You’re crossing your fingers.”

Laura Stayt, president of integrated shop Zambezi, said she believes the burgeoning trend is one example of that the narrative about the agency-of-record relationship being dead was a flawed one. While there was a focus on project work, this project-to-AOR offering is an example that it’s not as “black and white” as AOR or project, she said.

The economic uncertainty has likely spurred this trend, according to agency execs and pitch consultants who’ve observed it.

“The new black is marketers are needing brand expertise and are open to ‘test driving’ agencies via project work with the ‘option to buy’ at a later date,” said Lisa Colantuono, president of pitch consultancy AAR Partners. “It’s all in line with the shaky economic environment and uncertain times.”

Colantuono continued, “AAR Partners is managing reviews now where there is a house of brands involved but only starting 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, company and growth opportunity, project work is a great way to test both sides of the relationship!”

Agency execs say that they’ve experienced the shift from project to AOR as well as done a project with the promise of it becoming an AOR that did not come to fruition. The execs said that when it hasn’t come to fruition, the issue hasn’t been that of the relationship but likely budgetary concerns on the part of the brand.

The lack of commitment from marketers can be difficult for agencies to manage, particularly when it comes …read more

Source:: Digiday