John Racik President and CEO Given the trends in the pharmaceutical advertising market today, the agency structure must change to provide the most effective service for clients and a profitable existence for agencies. I n the world of pharmaceutical advertising, clients now want more from their advertising agencies than friendly faces with a keen eye for the latest creative. Pharmaceutical clients want and need an agency “partner” in every sense of the word. Today’s agency account managers must be experts in their field, steeped in product and industry knowledge. Account managers must be acutely aware of their client’s creative and business objectives. Plus, they must maintain a focus on three words — the bottom line. So what does this mean for the current agency model? It means it is time for a change. Increasingly, trends in the pharmaceutical advertising industry show the traditional client-agency model is no longer the best agency structure. Pharmaceutical clients want more than a tactical implementer on the other end of the phone to adequately serve their needs. They are demanding senior leadership and instant availability at all times. The healthcare industry needs a new type of customer-centric agency model. Unlike the traditional model that promotes conventional thinking and is often satisfied with conventional results, the new agency model must be proactive and seek out new opportunities to drive brand growth for ambitious clients. Client Advisors At the core of the customer-centric agency model is the client advisor (CA). A CA is a senior-level executive who works on-site at clients’ offices to partner directly with the marketing teams and to help guide them toward their brand and marketing goals. With deep marketing experience in the client’s industry and therapeutic category, the CA is uniquely positioned to understand the needs of the brand team and provide valuable counsel and insights on a continuing basis. While providing the client with greater access to seasoned guidance, the CA model also benefits the agency by providing insights on the client’s needs and priorities. As a result, account teams are able to work more proactively and responsively, and the creative team is able to develop work that is strategically on target. A Strategic Focus Another key component of the customer-centric agency model is a focus on strategic planning and consistent brand management. Too many agencies begin client relationships with a focus on a specific tactic, such as launching a new creative campaign. Under the customer-centric model, every new client relationship is built upon a proprietary strategic foundation. Before jumping into a tactical execution, the agency works with the client to first determine key goals and milestones for achieving the desired outcome. The agency also helps the client define the functional, practical, and emotional aspects of a brand, develop its personality, and identify its spirit. The agency then works with the client to decide which barriers need to be addressed, establish objectives, identify potential obstacles and opportunities, and determine which strategies and tactics will most effectively move market share. Bottom-Line Conscious Certainly, senior leadership and effective strategic planning are key, but the new customer-centric agency model must also be bottom-line conscious. Given the growing pressure on pharmaceutical companies to manage their costs effectively, agencies must evolve to offer more than just smart ideas and compelling creative. They must provide clients with actionable brand strategies that provide a measurable return on the client’s marketing investment. An agency’s willingness to work in partnership with the client’s procurement managers also is critical. To ensure fiscal discipline, the new customer-centric model will use cost-plus compensation agreements, which can be tailored to meet specific client needs. Rather than setting a standard fee for all clients, the fee is determined by the composition of the account team and the resources needed to fulfill the client’s expectations. Rates can be scaled up or down by contracting across the brand’s life cycle. This arrangement enables both parties to agree upon the scope of work and resources needed at the inception of the relationship, and beyond. Going Forward While the customer-centric agency model is fundamentally simple, it is expansive. It puts the focus on creating actionable, strategic plans that not only inspire work, but strengthen consensus within client organizations. Given the trends in the pharmaceutical advertising market today, the agency structure must change to provide the most effective service for clients and a profitable existence for agencies. Stonefly Communications Group, Westerville, Ohio, a subsidiary of inChord Communications, is a full-service advertising agency that continually innovates to redefine success for its pharmaceutical and healthcare clients. For more information, visit stoneflygroup.com. March 2005 VIEW on Advertising The Agency Structure

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