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Coca-Cola and IAG say brands need to invest in their agencies now more than ever

The Drum 25 Jun 2020 10:59
Coca-Cola and IAG say brands need to invest in their agencies now more than ever

Amid the turbulent social and economic factors this year has presented so far, the needs that clients have of their agencies are changing frequently, with marketers at IAG and Coca-Cola saying the client-agency relationship has never been more important.

The economic pressure of the pandemic has already pushed some agencies and brands into retrenchment and pay cut activity, but IAG chief marketing officer Brent Smart tells The Drum he made a conscious effort to continue to pay his agency at least the same rate.

“I was very clear about the fact I had to keep paying my agency,” he says. ”Client businesses are under immense stress and they have had to cut costs in all sorts of places, but agency fees will be one of the last things I’d cut in my marketing budget.”

Retaining agency talent is a priority

This is because Smart believes getting the best talent an agency can offer is one of the key objectives a brand should have in forging a fruitful relationship. By not cutting fees, agencies can retain top talent.

Investing in agency talent isn’t just about the financial investment either, according to Smart, who says that being a good client results in more effort from the agency.

It is the same for Coca-Cola. While the brand did pause spend for a short time while is assessed its position in the initial stages of coronavirus, it made sure to communicate to its agencies that it was investing in supporting front-line workers, and that agency work resumed as soon as it made sense.

“Our projects then weren’t relevant for that particular time, so we needed to do new work,” he explains. “We ended up creating bigger global campaigns from here in Singapore and that gave the agency more enthusiasm. The agency also had less work overall from different clients, and since we had a much bigger dream in place, it put its best talent and more time on our businesses. We got the best of both worlds.“

Coming back after a blackout on comms and then changing the entire strategy requires quick thinking from both the client and agency, and Thakar says speed is the most significant thing Coca-Cola has needed from agencies.

For IAG, which one of Australia’s largest insurance brands, the pandemic wasn’t its first challenge. With the country only just starting to heal from major bushfires as Coronavirus hit, speed had already become the norm says Smart.

While some brands and agencies may already be adept at working at the speed of culture, the challenge for the industry is working at speed in a way that doesn’t impact craft. “The tension for us as marketers is that beautiful creative work takes time,“ explains Smart. “You have to craft it.“

Location, location, location?

Thakar explains: “We have always worked with different agencies in different parts of the world. For the past four or five years, we’ve been going to different parts of the world to look for the best agency for that particular project, irrespective where they are based. That really helped us a lot because we were working with agencies across the world, and while some of them were in a lockdown, others were not.”

Smart and Thakar spoke with APAC publisher Charlotte McEleny as part of The Drum’s Can-Do Festival, an online event celebrating the positive energy, innovation and creative thinking that can make the marketing community such a powerful force for good. You can watch the interview in full here.

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CocaColaBrent SmartThakarIAG
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