We often think of Agency of Record relationships as a fixture of the advertising world, but in a grown-up event industry, where spend has increased and events are viewed as mission critical to business growth, the model is taking hold. Major brands have enlisted agency partners to manage entire portfolios of event programs, resulting, they say, in a consistency of message, a streamlined RFP process and more predictable cost expectations.
But much like the AOR model of the industry’s counterparts on Madison Avenue—event AORs are not always exclusive. Here, we offer a closer look at what you need to know about experiential Agency of Record agreements.
1. How are they structured?
AOR partnerships typically cover a piece of the brand’s business. George P. Johnson and IBM have had a global AOR since 1998 covering IBM’s customer events—a large chunk of the portfolio. It’s one of the oldest AORs in the event industry with an “evergreen” contract that includes annual agency evaluations on performance and financial targets. Last spring, DICK’s Sporting Goods and MKTG announced an event, community and experiential AOR. And in May, AB InBev selected IMG as its U.S. sports experiential marketing AOR.
More often, brands characterize these as “long-term partnerships.” Walmart and Proscenium signed a three-year commitment for its shareholder meetings that offer similar advantages to an AOR, including fixed rates. It began as a one-off partnership and evolved into a multi-year agreement. Proscenium also holds a long-term partnership with TD Ameritrade for event production.
Other common models include the Master of Service (MSA) model that sets terms governing future transactions and agreements, and the preferred vendor model, where brands have agreed to do business with a pre-approved group of agencies. Agencies go through the traditional RFI, RFP and stand-up processes, but instead of it being for a project, it’s for a certain amount of business. TBA Global holds Master of Service agreements with several major brands including Coca-Cola (which has a small pool of preferred agencies) and Google (which has a large pool of preferred agencies).
2. What’s in it for the brand? The agency?
Through the MSA, preferred vendor or AOR models, brands can set rate cards and realize bulk savings, discounts and credits across ballooning event portfolios. The models also free up time and resources spent onboarding a new agency for every event, says Katrina Kent, director-conferences and events at TD Ameritrade.
“We are able to cross pollinate from show to show, which translates to savings in everything from repurposing set pieces to discounted staffing to time saved by being able to pow-wow in person together on-site for one event about the next,” Kent says. “Strategically, it’s allowed us more flexibility when needing to scale up or down on agency support mid-cycle.”
Under these models, agencies are able to look at the business “holistically” to develop multi-year event strategies. There are fewer minor business deals to be made since projects such as creative brainstorming are included in the retainer. Agencies in turn can keep their costs in check by having a forecast of staffing needs, something that can otherwise fluctuate year to year. No matter the size of the brand or agency, the biggest benefit in a long-term partnership is consistency.
“Part of this is because we’re an organization the size that we are, but the communication channels across your entire business—especially internationally— benefit [from the AOR] by making sure that everybody is on the same page, and keeping the strategy that you set world-wide consistent,” says Colleen Bisconti, head of conferences and events at IBM.
3. How do you do it?
An AOR partnership can be initiated on either side. The preferred vendor model is typically initiated on the brand-side, an opportunity to cast out a wider net and draw in new partners and ideas. It may be harder for agencies to crack that inner circle, but there is always the opportunity to be caught in that net when the timing is right.
In a sense, the evolving AOR model is leveling the playing field for the scores of boutique and nimble agencies entering the game. So long as an agency retains core business values, it can compete with the big boys.
“Don’t underestimate good old-fashioned client service and responsiveness, timeliness, keeping deadlines, keeping timelines, keeping budgets,” says Jim Gerace, head of performance marketing programs at IBM. “It sounds pedestrian, but that is the year-in-year-out rigor that has to be done.”