Insights

Clients turn up the pressure

Marketing Week announced that Unilever has introduced ‘zero-based budgeting’ – who will be next?

What is zero based budgeting? Marketeers will have to justify all spend on new activity rather than budgets based on the previous year’s spend.

So what does this mean for agencies? It means that if an agency and their client can’t demonstrate real business impact which is measurable it is unlikely budgets will be approved. The number of ‘likes’ and ‘tweets’ probably won’t count!

This is something I’ve been discussing in my workshops for agencies for the past 5 years. It’s not about what you’ve done, it’s about the impact of what you’ve done. Measurability and accountability will become more critical. If an agency isn’t providing mission critical work it will become even harder to justify the expenditure by the client.

I would be very surprised if more corporates don’t follow Unilever’s approach. Don’t wait till it happens. Pre-empt it by introducing more rigorous robust criteria to measure and evaluate, ultimately to track the ROI.

Clients, especially senior clients, want to buy the results of a campaign, not the campaign itself. Clients don’t want to buy a PR campaign, they want the results of the PR campaign. Clients don’t want to buy a research study, they want to buy the insight to know what direction to go in.

This will sort the wheat from the chaff. Great agencies will see this as an opportunity to demonstrate their impact. Weak agencies will be severely challenged to prove their value.

My negotiation/commerciality workshop and trusted adviser selling workshop go into this in more detail. If you want to know more about these workshops get in touch.