Why Client-Agency Relationships Fail - And How to Fix Them

James Lawrence: Welcome back to the Smarter Marketer Podcast. I'm here today with Drew McLellan. Drew, welcome to the pod.

Drew McLellan: Thanks for having me.

James Lawrence: So Drew owns and runs the Agency Management Institute in Denver, Colorado. The AMI works with hundreds of agencies around the world, including Rocket, essentially to help agencies operate better, providing lots of benchmarking insights and data. Also provides a range of education. Courses, seminars, podcasts Drew pumps out for agency leaders and agency owners around the world.

I don't think there's many people on the earth that have better exposure and complete transparency into the inner workings of agencies , just due to the fact that you do have hundreds of agencies around the world that trust you, that lean on you for support.

So you do provide. A really interesting insight into the landscape how do you feel about that?

Drew McLellan: Yeah, it's a privileged position. I was an agency owner and , I came into this part of my career having walked in the shoes of the people that we serve.

And so I think , that. Gives people a level of comfort and credibility that I'm not just some consultant that decided to serve agency. Like I'm taking care of my own people. Yeah. Uh, and two, , I think agency owners don't have a lot of safe places to talk about the hard things and

there's certainly hard things on the client facing side, like how do we serve our clients better? But there's also a lot of business issues that are challenging for agency owners, and they don't have a lot of safe places where somebody really understands their business and they can talk about it. And so in our world, , we see full financials, we know all the players on the team, and so , there's a.

Professional intimacy that is created pretty quickly because the agency owners and leaders are hungry for guidance and in some cases, did the word you used earlier benchmark? Like, are we normal? Is what's happening to us, happening to other people? , is it an US problem or is an industry problem or is it an US opportunity or an industry opportunity?

So they're willing to. Be more open because they want that level of conversation. And , I think of us as, their confidant and so we hold the secrets of , many agencies, , across the globe. And , which also gives us the opportunity then to be more beneficial to every agency because we have this macro view.

James Lawrence: Yeah.

The listeners to the Smarter Marketer Podcast, , are mostly Australian in-house marketers. . And we're chatting off air. And so for me, I understand that, , you're the listener. , you're probably not running an agency. You might be working in one prob, probably not, but I do think there's so much value, , from a discussion we can have around.

What's happening in agency land? What are those macro trends? , how do you get the most out of your agency? ? Because I think often there is this unnecessary divide between in-house and agency and, , I think we stand so much to gain by, working collaboratively. And , I do feel that, a lot of your clientele start with your thought leadership, right?

You do a weekly EDM, which is awesome. And I think even if you are, , an in-house. Resource signing up to Drew's content. , you do your own podcast. , you do lots of webinars. Some of it's gated, some of it's not. , the content itself speaks for itself. , and , I know there's agency owners, , that might not necessarily have engaged with you, , by way of consulting or a fee for service, but I get so much value outta the content.

Right. Which is awesome.

Drew McLellan: Yeah. Yeah. Probably, you know, our audience is, . Hundreds of thousands of agencies that are consuming some part of our content, and most of them will never give us a dollar, which is fine. I mean , our goal is to be the most trusted agency resource in the world that we are the one that agencies can rely on.

And we think of in-house agencies as being something very different, but other than that, they don't have to go hunting for clients. They're running an agency in a lot of ways. And so a lot of the, issues and challenges, staffing, , lots of those challenges that out, that full on agencies deal with, so are the in-house agencies.

And so I think there's, I, I believe whether you look in the mirror as an in-house agency. You know, leader, and see it or not, you have quite a bit in common with your agency brethren because , you're doing the same work. It's just who you serve is a little different. That's all.

James Lawrence: It's really interesting.

I haven't thought of it from that perspective. And you, we, there is that kind of rise of the in-house agency, right? Yeah. There's a kind of a theme around the world. Haven't thought of your specific content and positioning , but yeah, why not? Right? The only difference being that kind of business.

Um, well, one of the large differences being kind of new business and acquisition.

Drew McLellan: Yeah. Right, right.

James Lawrence: It's cool. Um. . What are you seeing as the state of play? That's a very broad question, but what is the state of play for agencies?

And maybe talk a little bit about the us , then maybe we can talk a little bit about worldwide after that.

Drew McLellan: Yeah. , when you look at post covid, um. , 20 was challenging for every agency on the planet. 21, , people were coming out of that and feeling better.

22, 21, 22 for a lot of agencies were the best years that they had in quite a few years as they were coming out of Covid. There was a lot of pent up demand , and then 23 and 24 were harder for agencies. And , I think we went into the new year. I think there's a lot of economic uncertainty all over the world, certainly in the United States, uh, with everything going on with the new administration and talk of tariffs and all of that.

, our stock market is going bonkers right now. And so I think anytime you have that kind of uncertainty, that has huge impact on the way agencies are treated by their clients, by their prospects, and I think it has huge impact on how in-house marketers have to think about their budget. , what's being scrutinized.

And so I would say right now there's a lot of discomfort in the uncertainty. And I would say that's true worldwide is particularly apparent in the United States right now because our economy is, under such change right now, , with the new administration. , we saw this after the Great Recession. We saw it after Covid, and we'll see it, , again, now the reality is you can only stall for so long and then you have to actually do business, otherwise you go out of business. And so , I think we're in this moment of nervousness, which everyone will have to give way to, to get back to work.

James Lawrence: Yeah, . Mirrors what we're seeing here. , I think exactly as you described, 2020 through 21, 22 mirrors it. . We're recording this , in early April. , we've got a federal election coming up in May. And as you say, it's the uncertainty, right? , it's almost less which party wins once that, once the market knows there is a bit more certainty and, um, yep.

, the talk of tariffs , has also been uncertain, right? Until kind of that second, 3rd of April type date. I , recorded a podcast recently with Darren Woolley, who's kind of a pitch consultant here. He also does some work , in North America, and he was talking around when , we come into these times and there is pressure on businesses and more pressure than normal.

You do see, . More pressure on results, more pressure on bottom of the funnel, more pressure on short term marketing. You're getting non marketers , more involved in decision making processes around tenders and RFPs. It just does create this , kind of bottleneck of, , indecision and uncertainty and just doesn't make for.

, for great times, , for marketers. I think , it's a diff it's a difficult time.

Drew McLellan: Well, and I think it also creates , unrealistic expectations. There's so much pressure and everyone is feeling under the gun and , the average CMOs lifespan in a company isn't as long as most CMOs would like it to be.

And I think when you add the external pressure on that, and , as you say, you've got non marketers now deciding how quickly things could or should happen, whether that's real or not, it creates an environment where everyone is feeling, , under a microscope, which I think is also a time when.

In-house marketers may be more, , reticent to be candid with their agency, which is really the exact opposite that they should be. When they're under the gun and they're feeling the fire of internal pressures and expectation, that's when they should double down on transparency with their agency so the agency can understand exactly.

What's gonna get the pressure off of their client. So, , one of the things we talk about all the time with agencies is it's your job to make your client look like a rockstar and get the, raise the bonus, the promotion. But if the client won't tell you where they're getting pressure, how they're being recognized, what KPIs.

Really impact whether they get to keep their job or not. It's hard for the agency to hit that mark, but , when a client is willing to be more candid and say, look, I know we have all these things that we've planned for, but I'm telling you my CEO is going crazy about this one metric, and if I don't get results on this metric, I'm just feeling the heat on it.

So I need your help. I know I'm asking you to make a last minute change, but here's the pressure I'm under. Help me solve this problem, and then we'll go back to, , business as usual. So I just think it's an opportunity for agencies and clients to come together with a shared set of goals that allows everybody to do better work and to keep their job.

James Lawrence: Hmm. And it's the 1 0 1 of what makes a great agency. Client relationship, right, is transparency. It just, to me is so fundamental to getting great results together. And it always astounds me as to how much, , prospective , clients are observing, , friends agencies will hold back.

, why do you think there is that tendency to hold back and to not necessarily be fully transparent with your agency partner?

Drew McLellan: I think first and foremost, , particularly in the beginning of the relationship, you don't really know each other that well and you don't have that trust built up.

Clients typically get more, I. Candid over time , as the agency proves that they have the client's back. For some clients, they've been in a situation where the agency has thrown the in-house, either agency or client under the bus to try and get more money.

And so they're like, are you really on my side? Or, , if I tell you all the secrets, are you gonna use those secrets against me? , I think sometimes, and this is a hard one for. Clients to admit. Sometimes they're not told, they may not even know what their budget is, or they may not even know what the KPIs are.

I'm always astonished, and I can remember back in my agency days, I was always stunned when I would say to a client, well, , what are the four KPIs that the board or the C-suite is looking at? And they'd be like, you know what? They haven't told me. Hmm. And so some of it is in fairness. Their own ignorance.

They have not been brought , into the loop. And they probably don't wanna say to their agency, I'm not high enough in the food chain to be told all those things , or our internal culture is such that there isn't a lot of conversation around that and I'm not as invited into those conversations.

So I think sometimes they're protecting their own job or their back. Yeah. And sometimes they really don't know. Sometimes they think , that gives them a power position over the agency that if we te if, if they tell the agency they have a hundred dollars, the agency is magically gonna come back with a plan for a hundred.

Mm-hmm. So I think having more conversation around, okay, what's the total budget and how much do we wanna leave aside for opportunities that we can't anticipate and what should we plan to spend in each quarter? Knowing that we can't see around the corner and know what's coming. So we need to make sure we leave some buffer in the budget to react to things that we can't anticipate.

I think conversations like that help a client feel like the agency is thinking about the client's money, like is their money.

James Lawrence: Yeah, and I couldn't agree more. And the budget one always, , astounds me as well, the kind of holding back of, um, we're actually not doing very well or holding back on , the budget.

It's like, just get all your cards out on the table. Let's work through this together. And maybe it's a sign that, , yeah, potentially clients have been taken advantage of previously, right? But from my mind, it's always, let's get our cards on the table. Doesn't mean we have to commit to anything, but let's workshop this and, , try , to put, , multiple minds together to get the outcome that we need.

Drew McLellan: , I also think in some cases clients haven't been on the agency side , and they don't necessarily understand when they ask what to them. Seems like a simple question, how much work we have to do to actually give them a good answer to that question. And so, , if I say to you, well, you know what I've got.

I've got a quarter of a million dollars and I want to, I wanna accomplish these things. What would you do? I don't think clients understand how many hours we spend answering that question. And then when we come back and we go, nevermind, I only have a hundred thousand, then we have to go do it all again.

It's not just like, oh, I'm gonna subtract some things or add some things. We have to completely rethink it. I also think some of it is. A lack of awareness of how hard we work to be good stewards of their money or their KPIs or whatever, and how much effort goes into that. And I think they would probably be more thoughtful.

I think clients who've worked in agencies are probably a little more thoughtful about that transparency because they know what it takes to answer the question.

James Lawrence: Yeah, . For marketers listening to this podcast that haven't worked in an agency. Good job getting this far in this podcast because I think it does show an appetite to, show that empathy and try to look at the other side of the fence , and how we can make this work.

Just taking a little, step backwards, , but , based on your experience, how can in-house marketers work with agencies to set the foundation for success?

Drew McLellan: I think the more the client thinks of the agency as an extension of their team, that it's the agency is just another highly skilled tool in the toolbox, and the more they can bring them in early in the conversation, like , at the initiation of a strategy, rather than placing an order, I, I think sometimes clients don't.

Really tap into the depth of knowledge and experience the agency , so if I come to you and I say, I have a budget and here's where I want you to spend it. A lot of agencies will just say, okay, I, if that's the budget and that's where you wanna spend it, we'll spend it.

It's a more rare agency. I'll say, whoa, whoa, whoa. Let's go back. Mm-hmm. Help me understand. Why you chose that channel or channels, why the budget is what it is, how are we gonna measure success? So starting earlier together and really thinking through the strategy and how you're going to measure the success and how the client has to merchandise that success inside their organization so the agency can make sure , whatever those metrics are that they've baked in, the ability to measure those metrics from the very beginning.

That's a whole lot easier than going back and trying to figure it out afterwards. So I think that's one thing. I think number two, I think clients can do a better job of appreciating the agencies that they have. I think gratitude goes a long way and getting somebody to go above and beyond the call of duty for you.

And so when you've asked the agency to jump through a hoop, like it's a Friday afternoon and you call them and go, sorry, I gotta have this today. You know, being a little appreciative that they dropped whatever they were doing to get that done, I think is valuable. I think allowing the agency to educate themselves about the business more, not just the marketing, but yeah.

Come to the plant and see how we make the thing, or . Yeah, come hang out with us at the trade show booth and hear what's happening, or whatever it may be. But , the deeper you invite the agency in, the more they can understand the whole of the business.

Everything from distribution to packaging, to product development, all of it. Even if the agency's never gonna touch it, it does make them smarter about the business, which means the solutions they bring are going to be smarter. So. The opposite of what we just talked about. Mm. Rather than keeping the agency at arms length, the closer you can bring them in, the better.

Because now they're just gonna give you more insightful thoughts and ideas and tactics because they understand the big picture.

James Lawrence: Yeah. And I see the last point there as it's almost just a blindness, which is when you are working in a business, you understand it, you know the people, you know the challenges, right?

Or everything about it. , and it always has astounded me over the years , and we're trying really hard at Rocket , and have kind of been aware of this, , for years now of. Not allowing that to happen and trying our best to get, , , more involved with clients. And it's, clients per se, but the client's business.

Right. And , I think it's just genuinely just a gap of perspective, which is you're a marketer in your company, you've got all these pressure and you're dealing with sales teams and product teams and the C-suite and yeah, trade shows, whatever else. Another thing is to educate the agency on all these things that are happening, but from experience, the clients of ours that do that, yeah.

Invite us out to, to look at the product, to look at the display home or the display suite. , take a walk in , the shoes of , the prospective clients that we're trying to bring to them. It has just , a transformative effect. And , it's easy, right?

It's just , sharing knowledge, and, , um, in , the Smarter Marketer book that Dave and I wrote, and this is, the two of us not trying to preach to in-house teams how they should treat agencies and whatever else, but, , it goes a long way.

And I think, at Rocket we've got, a single disrespectful client and I think is actually a , fair thing to say. But over the years we've definitely, you know, had a few and this kind of trying to. Bang your agency down and treat them poorly thinking you'll get more out of them with a stick.

Right. Which just doesn't work. And , I know lots of agency owners, , in Australia and almost across the board, we actually love doing good work for people we like working with. And so actually being a human, being a person thanking people if , they're going above and beyond being, being direct with feedback.

Right. This is a, it's a two way street, but I think it has , a transformative effect as well. Right. As to what you're gonna get , from your agency partner.

Drew McLellan: , and the flip side of that is I think sometimes agencies lose out on the opportunity to get that behind the curtain peak because if the client's not gonna pay for it, they're not gonna go to the conference or they're not gonna go.

So it's a mutual investment. So I think sometimes the clients should pick up the tab, but I think sometimes the agencies should say, you know what? You're an important enough client for us. This is your big trade show once a year. I need to be on the floor. I wanna, I wanna see your competitors' boots. I don't wanna see pictures of it.

I wanna experience it, and I'm willing to invest, , a day or two days into our relationship. And the part of that that I think everybody misses is I. It's the time that you get to spend with a client when you're not both like answering 300 emails and trying to hit deadlines, but it's also a time to get to know each other better and to listen to speakers and then talk about those speakers together.

And it's great idea generation time too. Yeah. And so I think both parties have to be making, have to be willing to make the investment in the relationship. It's not just on the client side or on the agency side, I think, but it's both sides.

James Lawrence: Massively. , we've had a longstanding client, really good relationship with the marketing team and the CEO.

They're quite, quite a large, , insurer and. For the first time since we've been working together, we just went out and met the sales team. We went out, gave 'em an update on everything we've worked working with over the last year, had drinks afterwards and it was , so good to put names to the faces and to hear their challenges and what their customers actually think and what they don't think.

, and that was the entire team from Rocket Side that works on it, , with their entire team. And there's just no way that, that, I know, four or five hour interaction won't mean that we all just do better work together Right. For the next 12 months. Right. It's just such, it's, it's a no brainer.

Drew McLellan: , and again, I know everybody's moving a hundred miles an hour, and clients on the inside are under incredible pressure to stick to deadlines, stick to budgets, go, go, go, go, go.

There are meetings all day, every day, so it does require making the effort, carving out the time to do it, , whatever that is. But I think understanding the value of it, the residual value of it, it's not just what happens in those three or four hours, but , it's how it cascades into the work, into the relationship, into the trust that is really priceless.

James Lawrence: Hmm. A hundred percent. What are your observations on the best performing agencies? You work with in terms of the actual results they drive for their clients, what are the ways they work with their clients in terms of touch points and whips and monthly meetings? And I suspect the answer's gonna be, it depends, but , what are those ways that marketers can be trying to construct the ongoing relationship to make sure that, , the cadence and the working relationship is set up to actually drive the strategy that they need driven.

Drew McLellan: Yeah, I, I mean, obviously the answer of course is it depends. It's sort of like how much does it cost to build a house? But I will say the underlying current of that question is, do you as an agency truly understand what the client needs to know? What are they being asked internally and how often are they being asked those questions?

How often do they need updates on projects? How often, what, , how do they need the data? Do they need a deck? Do they need an Excel spreadsheet? Do they, like, how do they merchandise it up in, through their organization? And, , a lot of times, uh, I'll have agency folks say to me, Ugh, our client is micromanaging the bejesus out of us.

And I'm like, , the code for that is, I feel in the dark. I don't know what I need to know. So having really candid conversations before a project when you first land a client, , every quarter about, okay, , first of all, what are the success metrics that we need to measure? Number two, are we setting ourselves up to be able to measure those?

Number three, how often do you need updates on those metrics to satisfy your internal audience? And then. Depending on the work, how often should we sit with each other? And not just do an update. 'cause I can sell you, I can send you a Google sheet or an Excel spreadsheet to give you an update, but how often should we be talking about the work we're doing, the results we're seeing, and , what we think that indicates we should do next.

Like how often do we wanna move that needle? , and , for most agencies, I would say they're probably touching base at a minimum with clients every couple weeks. And a lot of agencies really are committed, especially for their larger, more complicated kinds. So they're having a conversation every week.

The key is are you making those conversations, actual conversations, or am I the agency just reading you a spreadsheet of data? You ask two questions and we go, okay, have a good weekend. And there's no conversation. We're not actually creating new ideas together. We're not questioning the data and wondering what it means.

We're not saying, okay, if we have data points, A, B, and C, what's, what would data point D look like and what would that tell us? Like there's, you're not massaging the information together to get more out of it. And so that's, I think the important thing is. How often do we need to actually think together as opposed to report out?

James Lawrence: Hmm. I love that. And I knew the answer was gonna be, it depends, right? And even for Rocket, some of our clients were meeting daily, right? And others it'd be once a month. Just depends on their needs. I think I, I love that point around micromanagement.

I don't think I've ever thought of it that way before. I think the idea that micromanagement. Almost doesn't exist in a vacuum. , it's not a plea for help, but it's , I'm fearful of what's going on here. I don't really, I don't know what's going on as opposed to this is just my tendency to micromanage.

The hell outta you. Um, and well,

Drew McLellan: and, and there certainly are some clients who are more inclined to micromanage, but in general, they have other stuff to do, like fighting herd on us and making sure we're doing our work is really not on there. I sure love to do this every day or every week list.

And so , if you're getting a lot of that from a client, it's worthy to say. I know you have a lot of meetings and other things to do, and yet you feel the need to keep checking in on this. What are we not giving you that we could give you to ease your mind or to give you data you don't have?

Like how can I help you not worry so much about if we're doing the work? Mm-hmm. What do you need to know , that I don't realize You need to know. Mm-hmm. And I think in a lot of cases, clients would be relieved. They may not even know that that's why they're micromanaging. But when you ask the question that way and they pause for a minute and they go, oh, you're right.

Every Thursday I get asked this question. So I'm calling you every Wednesday to get the answer. Mm-hmm. But if I just told you I needed the answer every Wednesday, you probably would send it to me. Like I think sometimes the solutions are simpler than we think.

James Lawrence: That's great. And, and does come back to communication, right?

Yeah. Having that conversation and setting expectation and transparency, and this is what I really need from you guys. I don't care about the shiny monthly report, or I don't care about whatever the whip, what I care about is this. , what are your thoughts on like , if a relationship is starting to fray, starting to break down?

When to repair, when to move on. What are those red flags like? , what are your observations there? ,

Drew McLellan: , I think the signs from the client's perspective are. A couple things. Number one, they feel like the agency's just boning it in.

They're not really getting fresh thinking, new ideas. , the agency isn't really questioning their own work and what could be better. , two, I. They're not getting the information they need or they're not hitting the KPIs that they need, and the agency doesn't seem to be as freaked out as they should be, that they're underperforming , and there's no conversation about why we're underperforming at Mutual.

Again, that ideation conversation about, okay, let's look at this and figure out why we're not getting the results we want. , I think a big one for clients is when I tell you something is broken and you don't fix it, that's challenging. Right? , I am being judged by your performance.

Internally. I am being judged by how my agency, the agency I either inherited or picked is performing. So I don't have a lot of time to chat with you four times about a performance issue or a behavior issue, or a lack of transparency issue, whatever it is. 'cause I'm gonna get fired or I'm gonna get reprimanded or I'm just gonna get a bad reputation that I can't pick a good agency.

None of those do I want on my record. So I think a big one for clients is when they don't feel heard. And so I think looking for , when things start changing in a relationship. You feel like that you, you get a spidey sense when a client's not happy or they're asking more questions, or you can tell by facial expressions or body language that something's off.

I think it's our job as agencies to go, you know what? Something feels off. Can we please have a conversation? I'm getting a sense that we're disappointing you in some way, and I want to know what that is so I can fix it. I think as long as you get. I don't believe clients expect their agencies to be perfect, but I do think they expect their agencies to keep trying to get better, and I think as long as you actively are trying to get better, even when you hit a bad spot, you've got enough sort of emotional currency in the relationship to the client and the agency to work together to try and solve the problem.

When it's time to say goodbye is when. How the agency is performing is now reflecting badly on you and you've tried to fix it and you're not getting any direction, right? That, you know, if you call the agency owner and say, look, we need to talk, and that person's not calling you back, , that day or the next day.

If you feel like you are a small fish in a big pond and , you have all the most junior people and you don't have any. Sort of senior savvy, smart people. There are signs that say, I'm not important to this agency anymore. And then I think it's worth one conversation. And if things don't change, then I think it's perfectly appropriate to go, you know what, this is, this relationship is not working for me.

I, I, I do not believe clients want to fire their agency. Finding and hiring a new agency is a pain in the rear end for the. In that transition, they know they're not gonna get the best work out of the old agency while they're transitioning to a new one. Again, , that's a danger point for them in their job.

So they want very much, if they've picked you, they want very much work to work. Now, does that mean they know how to communicate it? Maybe not. Does that mean we, as agency people have to watch for those signs and rather than sort of passively aggressively dealing with it, we need to go in and again, we keep using the word transparency, but.

With all candor say, , I am feeling a disconnect between us. Is it my imagination? Are we letting you down somehow? Are you mad at us? Or what's going on? Like, how do I get back in good graces with you? And so I think that's a mutual responsibility.

James Lawrence: Yeah, , the feeling for me is, quote unquote, they don't care, is just that. That sense that an in-house team, in-house marketing manager resource, the agency just doesn't care. I think that care factor, and, and I think we spell that right, I think you said Spidey sense, it's, it's turning up to things on time.

It's proactively reaching out with ideas and insights. It's resetting strategy, it's having senior people involved. It's having, you know, changing the account up number

Drew McLellan: work. It's being excited about. Yeah,

James Lawrence: yeah. All that stuff. And so I think that from the agency viewpoint is just. So crucial. And then I do feel from the, um, the in-house viewpoint, you, you, you said it, it's the communication piece, right?

Drew McLellan: I will say. You know, as you know, we do a lot of client satisfaction surveys for agencies and we talk to their clients. And I don't know that it's a very rare conversation , where a client will say, will not say to me, I love 'em, they're great, but you know, this thing, whatever the thing is, I know I should talk to 'em about it.

And then there's this long pause and I always say, why haven't you. Yeah, I know. I, I'm, I, I'm gonna do it, but I don't think they do. So I do think, first of all, on the client side, if you're unhappy, it's not fair to make the agency try and guess that you're unhappy or why you're unhappy. You're an adult, you're a professional.

There's a way to have that conversation kindly, respectfully, but with clarity and on the agency side. If you're seeing signs that feel off, don't wait for the client to say something to you, because in a lot of cases they don't until they call you to tell you they've hired another agency. Yeah. So neither side should be reluctant or shy about saying something feels wrong.

Can we have a conversation? I

James Lawrence: , I agree with you Drew, but if there's any rocket clients listening, and if you've got any bug bears, feel free to reach out to me. We'll, uh, right. We'll solve it. Yeah. Um, what are you seeing? More macro and not in terms of economic conditions, but what are you seeing in terms of just general trends, , is it a shift to the big agency, the globals? Is it a shift to independent agencies? Is it a shift towards, , in-house? Having a village of agencies for lots of things, or steering towards full service.

And I think, 'cause these things always ebb and flow, and I know there's not Yeah. One answer to that, but I'd, I'd just be curious as to where you see the landscape, if we put kind of economic conditions to one side.

Drew McLellan: So it's a pendulum that's always swinging, right? So right now , the big agencies are not in favor.

, it really is the mid and small-sized agencies that are getting more opportunities from larger and larger clients. And when you think about it, if you're the client, that makes perfect sense. I would much rather be a big fish in a smaller pond and have that agency really, really, really not want to lose me.

I'm gonna get more senior people, I'm gonna get more attention. Whereas if I go to a big holding company agency. I am, , somewhere in the middle of their client roster, I'm gonna get the middle of their client, , their agency talent as well. So I think that's number one.

Number two, I think clients are very clear that they want agencies to have a depth of expertise in both the work the agency does. So whether it's digital marketing or PR or whatever it is. Also a depth of knowledge about my business. So. One of the things we see, so we do research every year. We're on, I think year 15 of talking to clients about how they feel about some aspect of their agency relationship.

And one of the things we've seen from the very beginning is agencies that already have a depth of expertise in my industry are always gonna have a leg up over a generic full service agency. I don't wanna teach an agency my business, do I do. They have to learn my business inside the industry. Yes. But if they have already worked with 27 pharma clients, and I'm a pharma client, we're much further down the path of them learning about my pharma versus everybody else's pharma as opposed to me having to teach them the whole industry.

So , I wanna be big enough to really matter to the agency. I want the agency to be a specialist and ideally a specialist.

James Lawrence: Yeah. Interesting. In the Australian context, it's, it's slightly different. I think the, market is so much smaller than the states. And that bigger, macro global agency versus some of the indies, I think that's definitely in play at the moment. , and then I think it's.

The bit where it's a little bit different is, I think when you get to the specialization area, often in the Australian market, it'll be specialization with, you know, whether it's within a digital or within an element of digital or PR , or whatever it might be. Um, the getting into kind of a, a subset of marketing and in a kind of a particular industry vertical, there's definitely agencies doing it, but it's probably not as pronounced.

, it might even be B2B, but it might not be pharma or. SaaS or, and there's definitely examples of it. , but I think slightly different probably to some of , the stuff we see in North America where I think, I was at a conference in, , Texas last year and a guy was presenting and , he specialized in Google Map.

Optimizations in the automobile space. And I was like, wow. Like it must be a pretty, pretty small business. And then he got up there and it was literally hundreds of dealerships for one particular brand, right? And you do that across four or five different manufacturers, and that's a pretty big business.

And I think , in the Australian market, you just couldn't have a business at that level. , working just within one, one category.

Drew McLellan: , I think . Apples to apples of that is in the States. For a lot of those specialties, there's enough businesses within the states to have that specialization.

Yeah. I think in a smaller country like yours, it would be if you wanted to transcend the boundary of Australia and work with other countries in your region, and therefore then you could have enough. At bat and opportunities to say, oh, well we're the automotive agency for this region of the world. Yeah.

And we understand the cultural differences in these five countries that allow us to do that. So I think part of it is from both the client and the agency side, what is the long-term intention? The agency, do I wanna stay an Australian agency or do I want to, do I wanna do something bigger? , , we work with an agency, , in Australia that, that ironically is a kind of med tech agency.

Yep. And half of their clients are Amer American clients who want a bigger presence in Australia. So again, that's how they've broadened their market share. So I think it's, I think it's things like that.

James Lawrence: Yeah. It's funny. Again, definitely , the more specialized you are, then generally the wider geographical.

Footprint you'll have. Mm-hmm. , and we're a funny market as well, like, I think , even within cities, people are quite proco where it'll, you know, want an agency in Sydney or want a Melbourne agency or a Perth agency. When in the States it's, , speaking to friends that have agencies there, it's like you'll have clients all across the nation, some you've never met before.

Some you jump on a plane and see twice a year. But I think people are a little bit less, less, . Bogged down into wanting to use someone in their city.

Drew McLellan: , there are agencies in the states that are like, you know what, we're a Chicago based agency and all our clients are gonna be in Chicago or within an hour, circumference around Chicago.

So it happens here in the states too. Probably happens a little less often.

James Lawrence: It's interesting, interesting similarities and differences. Drew. , I love having you on the pod. I could talk, , agencies and marketing and , the shifting landscape forever, so yeah, I really appreciate your time.

I thank you for coming onto the pod and , hope to have you back sometime soon.

Drew McLellan: I would love it. Thanks for having me.

James Lawrence: Thanks Drew.