‘‘ With successive annual pitches , this sets off a perpetual race down the price spiral . Bottom line is that the client has greater bargaining power than the agency . It follows that while the agency ’ s creative effort may drive super profits for a client , the agency barely gets to extract commensurate value from the relationship .’’
as long as it ’ s within the media house ’ terms . From choice of property , content within property , and credit terms there of .
Where the agency favorably negotiates terms such as discounts , the client is never too far to claim the spoils . With the increasing influence of parent offices abroad , most clients now demand for full disclosure terms in agency contracts . Save for outright dishonesty or conveniently forgotten disclosure , the agency will never keep much of the value it generates from its relationship capital with media houses .
As it were , our poor boy in a rich neighborhood would have played ball till he goes limb but the bulk of the gate collection from cash-paying fans ultimately went to his neighbors ; the owner of the ball to the right and the good fellas with a lavishly green pitch to the left .
And why is this ? The rich neighbors ( read client brand and media house ) owned critical components to his favorite game . And so too , the bargaining power in his very own game !
Third , They Took A Closer Look At His Feet !
The feet symbolize creative talent . The most critical assets to our soccer star were his feet and dribbling skills . A closer examination revealed that he was an amputee utterly dependent on prosthetics to play soccer . And these too , he would hire from a local supplier with whom he had a water-tight contract complete with an exit clause …!
To you , the agency owner or manager , your key staff would be the prosthetics . If creativity is your core business and creative talent your critical asset , it then follows that your enterprise doesn ’ t own its most critical component , the creative talent .
It gets even worse . Top talent takes agencies years of massive investment to groom , nurture , mould and appropriately develop . It then exits to pitch a competing tent just when it has matured and you are set to start harvesting returns from it .
When Kome Mwambia , Ken Kyaka and Okoth Obado led a team of top Execs out of Ogilvy in 2012 , the ScanGroup moved swiftly to bring in Nick Wachira then th an . Fresh to the agency world , it must have taken significant investment to settle Nick on the agency leadership saddle .
No sooner had he gotten the ropes right , than he exited the ScanGroup . In under five years since his landing at the agency , Nick led yet another team of top Ogilvy execs to form Oxygène in partnership with Mr . Linus Gitahi , the immediate former Group CEO , Nation Media Group . And with them , they took some key client accounts including KCB and Safaricom
With way over 60 percent in agency market share , ScanGroup had sufficient dominance and therefore muscle to weather the storm . The question though is : how many other agencies would survive such a turbulent onslaught ?
This industry piece on the agency was compiled by Marketing Africa editorial crew from numerous discussions with a number of agency players in the region on the state of the agency business in East Africa . You can share your thoughts and views via mail at : Info @ marketingafrica . co . ke .