Last week in my Hopes for 2022 post I mentioned that it would be fascinating to see how the newer network players like Stagwell or You and Mr Jones (now recast as BrandTech) handle the challenges posed by a big international client using them across multiple geographies.
I'm regularly accused here of being anti-network. Which is ironic as from the early 1990's through to when I left corporate life in 2006 I held international or global positions. For example, I was one of Crispin Davis' team at Aegis working on turning a group of disparate but highly successful local media agencies into the Carat network and extending what was a European operation into the U.S. and APAC.
The international side of agency life is challenging. Large clients hire you because you're a network -- they assume you work the same way, to the same high standards, using the same tools and techniques across the world. After all, that's what they tend to do with their brands.
They expect you to share experiences, and lessons learned. To bring the experience working on the client in one market to working on the same client elsewhere. To hit the ground running on any new assignment. To help the client enter new markets. And so on.
They also want to be assured that a small piece of business locally benefits from the economy of scale that comes with being part of something far larger and more significant to the agency globally.
All this is easier said than done; easier on a spreadsheet than on the ground.
Agencies are local businesses. They're expected to deliver their numbers locally, and they deliver solutions locally to their local clients. Asking a local office to resign an important client to help the network win something smaller in the specific market, even if bigger and more significant globally, is never easy.
Strategies may be global, but executions are local. Lessons can be learned globally and distilled into guidelines and norms but still the implementational planning and buying is going to vary, place to place.
To deliver a central service, agencies need central revenues. There are multiple ways of solving this, with a central fee from the client obviously the ideal. Unfortunately, many clients think otherwise, after all their revenues are by and large generated locally, too.
"You're making money out of us in however many markets, so sort it out amongst yourselves," runs the argument.
I've been through every internal and external manouver known to man, from cross-charging to taxing, from moving people around to setting up consultancy arrangements that deliver a chargeable benefit. I do know how it works, and it's not an easy dilemma to solve.
But times have changed, data knows no boundaries and online advertising can be managed from the center.
Yet the same old problems seem to bug the same old networks. Some international HQs are still too internally focused, spending too little time on addressing how best to serve their clients internationally.
Many are stuck in the old ways, with data and systems bolted on to an old operating model, based unsurprisingly on how local offices have operated for years.
It should be easier for the newbies to set up one, transparent P&L per client; to pull together the information needed to make the central international case to client management, and to deliver visible benefits internationally from the start.
The established networks fall prey to the old joke about a tourist stopping to ask a farmer the way to Dublin. "Well," says the farmer, "If I was you, I wouldn't start from here."
The old networks, who themselves were let's remember once the new kids on the block, started off as local operations and were acquired by someone who then made a merit out of becoming international.
The newer guys' journeys to international network status varies of course, but they do have the benefit of learning from others' mistakes.
With data and systems at their heart from the start the newbies will do things differently. They'll change the game.
Should be interesting.
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