Scott D. Cotherman, CAHG

June 3, 2010

Pharmaceutical Executive

Pharmaceutical Executive, Pharmaceutical Executive-06-03-2010, Volume 0, Issue 0

A heavily rigid agency network structure that fights against their strategic objectives is the last thing clients should be looking for.

Holding company consolidation is a key trend and increasingly commonplace, especially among large multinational clients. Many of the top companies in the world have moved to some version of this model, either through holding company consolidation efforts or by securing a smaller list of preferred agencies.

Scott D. Cotherman

Aside from potential cost savings, which are typically a natural outcome of such efforts, key drivers are greater efficiencies and increased marketing consistency across the fewest number of best possible service providers. It should be self-evident that this model will help to reduce the number of suppliers at a given client, focus on the selection of the very best available agencies, and create a streamlined approach to the development of strong, globally integrated, multi-disciplinary, multi-channel communication programs. Three primary areas of impact include:

  • Creating better brand-building ideas that cross disciplines and markets,

  • Utilizing a consistent set of processes and tools,

  • Expanding to more markets and communications disciplines quickly and consistently.

Operational efficiencies aside, the definition of success in this model is measured through greater effectiveness and ROI associated with the client's marketing spend by putting forward the best communication strategies, creative product, and globally connected communications.

The downside to this model is related to limiting the selection of agencies to only those within a particular holding company. If clients have rigidly structured relationships within one or two holding companies, they may need an exception policy that allows for the limited selection of other service suppliers. Although rare, the holding company may not always provide the best-in-class agencies the client needs to address a particular brand challenge. That being said, clients have to be very disciplined in having the exception criteria in place from the start or they undermine the benefits established by moving toward the holding company relationship.

The best and most successful agency network relationships are ones where the resources are vast enough to allow for custom configuration to meet the client's strategic objectives. Some clients prefer command and control, whereas others are highly decentralized and require flexibility in approach. No two clients within our industry are the same and it would be foolish to approach them via a one-size-fits-all, take-it-or-leave-it model.