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We’ve been having a lot of conversations lately about the benefits of a full service agency relationship vs. the advantage of a project relationship. There are two ways of looking at this: from the agency perspective and from the client perspective. In general, any client large enough to have an advertising budget and to benefit from annual planning does better with a full-service relationship. It’s a matter of scale, synergy, and consistency. You have too many initiatives to be paying a premium for each one (as you do when you treat them as projects). You gain momentum in the relationship, as you work with your agency from day to day. And your work, sometimes by design and sometimes by default, gathers momentum in the are of perceptual consistency (branding).

Some clients feel that they benefit from breaking their budgets into pieces and working with multiple agencies on multiple projects. Sometimes, when you’re dealing with highly specialized issues like the security concerns with bank databases for direct mail, it makes some sense. Or, if you’re a multiple brand company with a billion dollar budget it can make sense to consolidate things like media planning and buying. But as a rule, trying to work agencies against each other is counterproductive. You lose continuity. You pay more for each initiative (because they’re projects). You lose clout in negotiating either price or production priority. And you have to live with the fact that some percentage of your projects went to your second-choice supplier.

From the agency perspective, the advantages of a full-service relationship over projects are:

• consistent dependable billings
• continuity in communication, work flow, and client direction
• efficiencies in creative, media, and planning processes

From the client perspective, the advantages of a full-service relationship relative to projects are:

• relatively controlled spending
• additional consultation, research, and other services “thrown in” as added value
• costs of meetings and estimating are virtually shared by agency and client, rather than born by client alone
• efficiencies in creative, media, and planning processes
• top priority in agency production schedule—a large full-service client is king and will almost never get bumped for other work

From the agency perspective, the advantages of project over full-service are:

• projects tend to yield a higher-percentage margin
• projects provide flexibility in the production schedule (they can be moved back to make room for larger projects or full-service client needs)
• projects allow the team to stretch, projects tend to yield award-winning work (don’t even get me started on award show judges…idiots!)
• projects can fill in during down parts of the annual work cycle

The disadvantages of projects for an agency are:

• they do not provide any security (when the project is over, it’s over)
• they can be disruptive of other work flow (especially during busy times)
• they tend not to leverage efficiencies developed for full-service clients
• because they can yield high-profile creative, they can be a distraction for the team

From the client perspective, the advantages of project over full-service are:

• you get bigger guns on your initiative than you could afford to hire full time
• you are not committed to a long-term expense
• the work can be high-octane in the short run, since it tends not to be constrained by things like brand guidelines
• there is some leverage for negotiating, if you’re willing to wait and use agency resources as they become available

The disadvantages of projects for a client are:

• the project is subject to being bumped in the production schedule, in favor of bigger projects and work for full-service clients
• you pay a premium for project work and have limited leverage for negotiation
• you frequently end up sacrificing continuity elements such as brand guidelines
• the creatives may be tempted to be motivated by their own portfolios than by the client’s outcome.

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