How To Manage A Winning Agency Realtionship

October 3, 2008

Pharmaceutical Executive

Volume 0, Issue 0

Pharma is looking to advertising agencies for more support, but companies are also under financial pressure, which in turn puts pressure on the agencies. Here are some ways to ease the situation

Stretched in-house resources and the need for specialized services like online marketing have pharma companies relying more and more on outside advertising agencies. Agency spend represents a significant portion of overall promotional budgets. At the same time, cost controls put pressure on agencies to deliver promotional materials on shorter timelines while having to work with increased regulatory issues. All of which means that it is important to manage your relationship with your agency. But how?

SETTING POLICIES

Just as manufacturing operations rely on standard operating procedures (SOP) to help achieve medical, regulatory, and legal compliance, the side of pharma that manages brands should adhere to smilar, set policies for working with outside agencies. Among the clients we work with, two-thirds have codified guidelines that set clear and measurable goals when it comes to managing agencies.

Having such guidelines in place can improve the ability to forecast brand needs, adjust expectations of brand results over time, help negotiate rates, audit agency performance (including agency-brand team interactions), and address compliance concerns.

Ideally, once companies make the investment in time and money to develop standards for agency relationships, they will also take the extra step to make that information available to all relevant parties via appropriate information channels (e.g., company intranet, Web sites).

BRING ON THE COMM OPS

Relationships work best when partners have a sense of equality, their perspectives are valued, and they are part of a team. But how do you foster a climate of collaboration when the group is a disparate mix of marketers, account managers, technical specialists, and creatives—all with different perspectives and objectives?

This is where the Commercial Operations arm of your company can play a critical role in managing agency relationships. It is a well-known paradox that creativity thrives in an atmosphere of maximized business productivity. For instance, when assets are easily recordable, retrievable, and reusable by everyone, creative types become more creative, managers become more innovative, and team leaders have more control managing money, time, and people.

Commercial Operations personnel bring a combination of management expertise and technical savvy to brand teams, which are typically green. (On the average, a pharma brand team manager stays on the job for 18 to 24 months.) On the agency side, senior personnel may remain in place longer, but members of the account teams—the people who perform the hands-on work—also change every year to two years.

Comm Ops, on the other hand, typically has lots of experience working with numerous vendors. By bringing them on at the outset, during the agency selection process, you can take advantage of their ability to identify best practices and avoid the mistakes of the past. Their professional background qualifies them to recognize which agencies have the right credentials for a given assignment.

Once a relationship is established with an agency, Comm Op staffers can bring their analytical expertise to bear. They can assess (with appropriate metrics) how well agencies are meeting stated objectives and expectations, and how well they're operating within the pharma company's overall culture.

By providing comprehensive, objective evaluations, Comm Ops can save time and money, and make the job of agency management more efficient. On the agency side, this structure actually helps offset the problems that often can occur when marketing, public relations, and medical education agencies feel as if their creative, thought-driven services are being treated as interchangeable commodities.

Some of the tools and approaches Comm Ops can bring to the table include:

Greater use of automation Mechanisms are put in place to automate and streamline promotional review and approval processes, which results in faster turnaround of promotional materials.

Digital asset management Designing and creating a repository to collect, store, and retrieve digital assets for repurposing helps to optimize workflow and enrich the work environment.

Workflow management Automation can be used for marketing resource management to facilitate techniques such as exchanging notes, annotations, and other materials needed in the promotional review process. (The aim here is to reduce cycle time in the promotional supply chain for all channels.)

Increase use of pharma analytics These can be used to hone messages and target strategies, factoring in competitive responses, market reactions, legal and regulatory issues, and managed healthcare environments.

Aggressive use of Six Sigma These techniques can be used for rigorous examination of the promotional supply chain. They can also identify opportunities to reduce cycle time, reduce errors, and improve predictability of materials flow.

Training and orientation Commercial Operations can help in providing content for training and orientation programs. Again, the frequent turnover of brand teams makes it all the more important and useful to have robust training methods in place.

Sharing risks and rewards The creative use of compensation can provide an excellent tool for managing agencies and encouraging optimum performance. Companies can reward agency partners for proposing innovative approaches, beating deadlines, reducing turnaround time, and generally exceeding expectations.

The same concept holds true for underperforming agencies as well. One large-tier company, for example, realized a 5 percent reduction in agency fees because predetermined objectives weren't met.

While it is understood that professional services such as advertising and public relations can't necessarily be treated as a commodity, the nuts and bolts of what's been contracted for, such as developing materials and delivering them on time—or ahead of time, are easily quantified and therefore can be evaluated using objective criteria.

CROSSING THE T'S ON YOUR AGENCY RELATIONSHIP

When establishing a set of formalized procedures for your brand team, it is important to remember to include processes for:

Expecting the unexpected Experienced managers have a response plan in place. As part of your set operating procedures, an escalation process should be in place in case a dispute emerges between an agency and client. This will enable the matter to be bumped up the marketing ladder for resolution.

Risk management Additionally, if an adverse market event should occur, a clear chain of command should be in place, along with a specified process to follow. This will enable appropriate decision makers in senior management to be notified before a problematic situation becomes critical. Examples include: receipt of a warning letter or notice of violation from DDMAC, a product recall, damaging clinical information, inventory stockouts, etc.

Business units Companies in which separate divisions are responsible for distinct therapeutic areas pose special challenges. For example, an oncology franchise might want to select multiple agencies with proven expertise in different areas within the category, which might result in numerous agencies of record. It may make sense for oncology to select one ad firm for a breast cancer treatment and another for its prostate cancer drugs. This requires a set of operating standards that accommodate the situation. There is no one-size-fits-all framework.

CHECKLIST

Your standard operating procedures are sound if they help with:

•Agency negotiations

•Agency evaluations

•Optimization of brand resourcing, both quantitatively and qualitatively

•Minimization of agency compliance-related issues

With careful forethought, pharma companies can develop winning relationships with their outside agencies, benefitting the brand and, ultimately, the bottom line.

Jim Mercante, a partner at TGaS, can be reached at vjmercante@tgas.com