There’s been a lot of talk recently about the fiduciary standard for financial planners becoming law in 2017. So much so that John Oliver even delved into the topic recently to show just how confusing the whole process is. That got me thinking: What would a fiduciary standard look like if it applied to advertising agencies and marketing consultants?
To be clear, a fiduciary standard is a guideline means that the person or agency performing a service on behalf of a client needs to act in the client’s best interest. Sounds simple, right? Not so much. In the case of financial advisors, they often push products and services that have much higher fees so that they can reap the rewards in higher commissions, essentially dooming their clients’ finances.
You have no idea how often agencies, especially smaller ones, engage in similar behavior. High hidden management fees. Accounts being held hostage. More expensive media plans than necessary, with payment on the backend from the media receiving the placement. It happens every day. How do we get agencies to look out for their clients, as opposed to looking for ways to make a quick extra buck?
Selling Services That Are Actually Needed
The first rule in the Hippocratic Oath is “Do No Harm.” That should apply to marketing consultants and agencies as a baseline of this marketing fiduciary standard. Assess the situation, figure out what’s working, leave that alone and direct your attention to what you can improve. Unless, of course, your business model is predicated on screwing things up and charging to fix them.
Case in point, if you go to a creative agency who specializes in websites, they’ll prescribe that a new website will fix your problems, even if the one you have is working perfectly fine for you. So they’ll set you up with a new website that underperforms your old one, then charge you even more to fix it. In marketing, this is sometimes called “creating demand” for your product or service. It could also be called “unethical” and “malpractice.”
Things like rebranding an already strong brand, ignoring important market segments and moving away from marketing strategies that are working simply for the sake of “changing it up” do a disservice to the client. Run from anyone pushing services you don’t need. Look for the marketing consultant or agency who listens to your problem and prescribes a fix that is a well thought out response to the issue you need to address.
Client Ownership of All Assets
A common practice for many agencies is to create advertising collateral. You hired them to manage your marketing, so it makes sense that they build some things along the way. The problems come when you’re trying to claim ownership of your own marketing materials.
Sometimes your marketing partner will withhold your rightful materials as a way of extracting final payments or billing recurring charges. The second you ask for what should be your intellectual property, they ask what you need it for, offer to charge you to do it on your behalf, or just simply ignore your request. This flat out isn’t fair and isn’t the way to act when you’re held to a marketing fiduciary standard.
Make sure that when you agree to terms with someone to manage your marketing, you include a clause that insists that you own all paid for work. This includes your website, social media accounts, advertising art source files, written copy, taglines, and anything else you’re using to brand your business. If your marketing team balks at sharing that with you, they’re setting up for a major battle down the road. Choose not to fight it. Choose someone else.
Big Budgets With Better Results
One of the ways advertising agencies compensate themselves is through media placement. By placing media in volume, they get better rates than the client would otherwise. They then split the difference with the client, more or less, creating revenue for the agency. The problem is when it’s more “more” than “less.”
Sometimes, those same media outlets can incentivize your agency to place media there as opposed to anywhere else. Competitive pricing is one way. Paying the agency directly for the placement under the table is another. Guess which one shouldn’t be a part of any marketing fiduciary standard?
Major agencies across the country are under scrutiny for this very practice, commonly referred to as “kickbacks.” By following the money, marketers do a disservice to their clients and the industry, all but admitting that it doesn’t matter where the money’s spent, so long as they get a piece. When in reality, placing media is extremely crucial to success and fraught with difficulty every step of the way. There are hundreds, if not thousands, of options. Work with someone who will show them to you, explain the benefits and drawbacks of each, then let you make the decision based on merit, not on money spent.
Transparent Billing That’s Easy to Understand
Many agencies nickel and dime their ways to profitability. Hidden fees and surcharges. Extra unaccounted for hours. False metrics that don’t correlate to results but do correlate to bonuses made. There’s no reason compensation has to be so complicated.
We’ve discussed billing for advertising services before. To sum it up, work with a marketing partner that explains the value of their service, rather than one who hides their charges in the fine print, or worse, contends you owe them more money than you agreed to pay them. Open, hourly billing is our solution to this problem. What’s yours?
The Client’s Role in the Marketing Fiduciary Standard
It takes two parties to have an ethical relationship. Just as we’re laying out the rules for a marketing fiduciary standard, it’s up to the client to hold marketers accountable. Understand what you want out of the partnership, draft the rules by which everyone will be governed, then be honest with your marketer. Don’t withhold information or embellish important facts or figures. That doesn’t help us do our job.
By talking with each other as equals and setting up a code of ethics, this marketing fiduciary standard could help you get more out of your marketing team.