Field Guide for Marketing-Procurement Leaders, inspired by Denis Budniewski’s ANA AFM Masterclass
There are conference sessions you attend out of courtesy and those that strike a chord and linger with you long after the sessions ends. Denis Budniewski’s “What Sets Apart a Top-Performing Agency?” at this year’s ANA Advertising Financial Management Conference in Carlsbad landed in that elusive second bucket. We shared our enthusiasm for this session in our Summary article, but it was not enough. We wanted to dig deeper.
Why does this conversation matter?
For the first time in a long while, someone (aka Denis) translated the “client–agency partnership” into an operating model that finance, marketing and procurement can rally around. This is the “million-dollar question” for our industry, and most of us have spent hours — if not weeks, months and years - trying to decipher what that success looks like when we refer to a “top performing agency”. Like with everything, there is no magic bullet. If there was, GenAI would have found it by now…
During the session, Denis highlighted how to utilize a relatively standard tool to drive successful performance in an analytical and almost scientific way. His core provocation was straight-forward and simple: “Agencies are an investment — treat them like you’d treat an asset.”
As a 20-year procurement veteran who has heard every flavor of “let’s be partners” without the commercials to back it up, I found Denis’s data-driven logic refreshing and even monumental. Combining the six performance attributes that Denis discussed with practical guardrails for marketing procurement leaders who want more than incremental savings is the key for wider implementation of this methodology.
Earlier during the conference we heard from the ANA (Bill Duggan and Greg Wright) on “Compensation Trends” that there is a decline in use of incentive compensation models in the last few years. While this is counter-intuitive for many on the surface, we work with several clients who initially — during the pitch process — would love to implement an incentive model and “align goals and outcomes” for a successful partnership. The truth — or rather, the reality — is that once the rubber hits the road, it is harder than most of us think to implement a fair and equitable model that can deliver both on internal requirements (finance, accounting, budgeting, compliance etc.) and external requirements (agencies, partners and their budgets etc.). The result is often that parties agree that the first year will be a “test year” or that savings (media pricing, agency consolidation efficiencies etc.) will be the only KPI tracked. The reason for this is that this metric for success is often a simple “yes/no” deliverable.
Meet Denis: Why We Should Listen
Most of us in the advertising industry know Denis. Denis’s résumé reads like a who’s-who of advertising. He was Chief Client Officer for Omnicom’s bespoke agency for McDonald’s USA, steered Cadillac at Fallon, and, six years ago, jumped the fence to become Verizon’s head of agency ecosystem strategy and investment. Earlier this year he started consulting with PwC to define and govern their agency ecosystem. In short, he has been the agency account sweating QBR scores (Quarterly Business Reviews), making late night calls to secure a bonus is “in the books” before year-end and he has also been the client executive demanding better and more informative reporting. That dual vantage point makes his playbook actionable at a whole other level.
The Six Non-Negotiables of Top-Performing Agencies
Over his career, Denis distilled thousands of 360° evaluation data points into six attributes. The one notable attribute missing: the creative work itself. As Denis put it, “If the work stinks, you’re not even in the conversation”. Excellence, he argues, starts upstream.
1. Leadership
A-teams come in two very important distinctions: the core day-to-day crew (creative lead, account lead, strategy lead, investment or analytics heads) and the executive sponsors (CEO, chief creative, chief strategy) who should parachute in with real influence — not just show up during a pitch final.
Procurement take-away: Bake senior-leadership access into your MSA and tie a slice of the fixed or variable fee to visible engagement — e.g., two executive-level workshops per half year. We see this implemented across clients who ask for an “Executive Client/ Agency Board” to be included in the value portion of a relationship. If you detail the seniority or even a name, it sends a clear message to everyone involved and progress can be tracked easily.
2. Strategy
Even a pure-play production agency owes you a Point-of-View on technology road-mapping, GenAI leverage, or off-shore “follow-the-sun” workflows. If sellers show up with nothing but bids, you’ve hired a printer, not a partner.
Procurement take-away: Introduce a “Strategic Contribution” KPI worth at least 10% of any incentive pool. This should result in a higher strategic value being delivered to the client. Often, this does not have to be a custom report, but accessing the overall Agency pool of industry intelligence is imperative for everyone to elevate the work strategically.
3. Proactivity
Denis tells a story of an agency that announced that “you’re not paying us to be proactive,” prompting an out-of-body experience for him as a former account lead. Contrast that with Omnicom’s flipped-arches stunt for McDonald’s on International Women’s Day — an idea the client never briefed yet netted 6 Cannes Lions and 1.6 billion earned media impressions.
Procurement take-away: Ring-fence about 5 percent of fee as an innovation pool. Release funds only for un-briefed ideas with a quantified business case. This should be done during the budget time with marketing being conservative with annual commitments and give guidance. Finance needs to budget a small part of the fee under “TBD”. The orchestrator of this is the marketing procurement leader, who can merge the need for a slush fund, and the strict budget rules.
4. Flawless Execution
“Money, time, quality — pick all three.” The best agencies, Denis argues, run 15-hour turnarounds without forcing change orders or overdosing on freelancers. Most of the time, this is similar to continuous improvement that is imperative in many other procurement categories. In multi-year relationships, agencies and clients get to know each other’s culture, ways of working and understanding of urgency. Take the time to learn from this. With tracking of not only “start to finish” timelines, but smaller steps or processes, you can identify the specific “time or quality thieves” and address them individually.
Procurement take-away: Track re-work hours and on-time-in-full (OTIF) delivery as hard metrics. Poor execution should erode margin, not just high ratings. This is something that can be agreed in the Service Level Agreements (SLAs) and the data can be reviewed at QBRs. This means OTIF is trackable — and therefore improvement can happen on a quarterly basis.
5. Collaboration
With 5, 10, sometimes 20 agencies in a modern ecosystem, internal turf wars are commonplace — and fatal. Performance leaders actively seek cross-shop workshops and co-developed deliverables.
Procurement take-away: Add peer-review scores (agency-on-agency) to the evaluation. Nothing drives better behavior faster than public feedback loops.
Also, from a procurement perspective, take the time to check in on an informal basis with every agency. If you only speak with the large players, you will only know their version of how things are working. Counter to how many people in procurement traditionally feel about meeting with “the other side”, this is key to better understand what is really going on.
6. Commitment
Is the agency prioritizing Cannes bling or your P&L? Denis recalls a global chief creative officer who pushed an idea solely to rack up Lions — a signal the agency’s incentives were out of whack.
Procurement take-away: Anchor at least one KPI to business impact (e.g., incremental revenue, cost-to-serve reduction) rather than awards or social metrics. We see a lot of push back from agencies in this space. It is often hard to link agency performance to brand sales, however, this should not be a limitation to include it as a KPI. Advertising is primarily bought to increase sales or a similar attribute for brands.
Performance evaluations: From busy-work to revenue driver
More than half the room (at the conference) admitted they don’t run formal agency evaluations. Denis’s response: “You have a personal performance review, right? Why not for one of your biggest external investments?” His blueprint:
- Semi-Annual Cadence — Anything less frequent lets problems linger and become larger — thus harder to solve.
- Common Question Set — Creative, media and other agencies answer the same core survey, so that your data is comparable.
- 360° Feedback — Agencies should rate the client because, frankly, “Clients get the work they deserve.” You can drive transparent answers by limiting the release of some of the data to senior executives.
- Lean Instrument — Target a 20-minute completion time; multi-shop teams may fill ten surveys each cycle.
- Human Analysis + AI Assist — Use generative tools to triage verbatims but keep final synthesis with category experts.
- Action Planning & Visibility — KPI dashboards shared openly with marketers, procurement and agency leads. This is where the rubber hits the road. While the semi-annual evaluations are standard, the work in between the evaluations are led by procurement. Successfully addressing current issues should impact the scoring in a certain area of the survey in the next cycle. Sometimes it can feel like you are playing whack-a-mole, as issues often travel from one area to another. But no relationship is ever perfect in all areas.
At Verizon, Denis tied agency incentive compensation to largely the same KPIs that were used for Verizon employee short-term bonuses; correlation was close to 99%. Alignment, not altruism, drove performance.
Commercial architecture: paying for greatness without overpaying
Budgets are very often finite, but value capture shouldn’t be. Denis highlighted three mechanics every procurement team should validate across their agency eco-system:
- Incentive-Weighted Fee — Guarantee a base margin but allow over-achievement up to 120% when KPIs outperform. “Every company has its own tolerance to budget variance, work with your finance and marketing stakeholders to land at a number that makes it important for the Agency and meet your internal constraints. Maybe build up to a higher percentage over the life of the relationship, to mitigate company risk.
- Innovation Pool — Mentioned earlier, try to establish a pre-agreed carve-out that can finance breakthrough ideas without endless SOW amendments. Some marketers refer to this as a “slush fund” but here it is less about holding back funds and more about paying for innovation. We (RAUS Global) often see that other agency governance programs that marketing procurement initiate can help identify funding that often is not reported to the client through the common channels. Here contractual audits and media audits can be a helpful tool to gain access to additional funds.
- Negative Surcharges — If re-work or missed SLAs exceed thresholds, claw back a portion of the fixed fee. This needs to be clearly detailed and it has impact on revenue-recognition on the agency side and can cause some issues on the client side, for finance and budgeting. It is often a small roadblock that is easy to overcome with clear contract language.
Incentive models are losing popularity
As we detailed in the introduction to this article, there is a strong downward trend around managing an upside incentive among clients. The most recent survey indicates that only 26 of 99 respondents (≈26%) reported that any of their current agency relationships include a performance-incentive component. While this number is (still) astounding to us, marketers who were surveyed said incentives “take a lot of work to set up” and they aren’t seeing meaningful performance improvement in return. About 70% of the Marketers who have incentive compensation in place, admitted they couldn’t tell whether the bonus scheme changed agency behavior.
However…
The survey also highlights — in the qualitative follow-ups on the survey results — that marketers said communication, clear KPIs and team culture create a “shared sense of purpose” better than a cash bonus that may never hit the front-line staff.
Turning attributes into an operating model
Below is a sample mapping we use at RAUS Global when reviewing client–agency ecosystems:
The Procurement Mandate: From Cost Police to Partnership Engineers
Some sourcing teams stop at “Did we get 10 percent savings?” Denis’s framework challenges us to design performance, not only negotiate it. By being involved up-stream with stakeholders, this can become measurable success for you and your Agencies. Denis lists three imperatives to follow:
- Data Fluency — Know your evaluation metrics cold. If marketing debates a score, arrive with evidence, not anecdotes. The same goes when you work across markets and geographies.
- Commercial Creativity — Fees, value pools, earn-outs, claw-backs — use every lever. Savings today mean nothing if value erodes tomorrow.
- Culture Hacking — Celebrate agencies publicly when they nail a KPI. Positive reinforcement isn’t fluffy; it’s behavioral economics.
Futureproofing: AI, sustainability and risk
Denis only grazed the surface of GenAI, but his call to embed technology roadmaps into every agency SOW resonated with many in the audience. As GenAI accelerates content velocity, procurement must:
- Ensure intellectual-property indemnities cover synthetic assets. Work with legal, tech and other stakeholders to stay abreast of change in this space.
- Mandate energy-efficient production (tying into zero-waste marketing agendas). This is the next step we need to focus on.
- Stress-test offshore data-transfer compliance. gain, legal is your friend here. Reach out, discuss, before any agreements are signed.
The agencies that anticipate — not resist — these shifts will top future scorecards. As procurement, reach out to your agency partners to discuss these areas.
RAUS Global Perspective: Bridging Strategy and Controls
At RAUS Global, we believe in driving business and value while applying guard-rails that are necessary to ensure that both Brands and Agencies are aware of the commitments and evaluate the risk/reward. We see some key insights in the above that may seem simple — but evidence, discussion and anecdotes indicate that it is easy to take the eyes of the ball.
- Measurement without consequence is detrimental to success— Dashboards must feed commercial levers, or nothing changes.
- Savings are table stakes; capability uplift compounds — Procurement needs to expand the “savings” measurement to include value. Whether we refer to it as value, soft savings, cost avoidance or other, it needs to be part of the overall strategic agenda for marketing procurement.
- Procurement owns the “why” — Marketing often owns the brief, finance owns the money, but procurement stitches the why into the commercials. As procurement, you need to “sell your position” to your stakeholders who often have similar but different goals. It is a constant “give and take”, compromise and here — guardrails will help you manage within your boundaries while meeting your stakeholders where they are at.
Closing Thought: Build Your Factory of Creativity
When Denis closed with “Don’t leave agency performance to chance,” I scribbled one word in my notebook: YES. Factories don’t improve because you “hope” the assembly line runs faster; you instrument, you incentivize, you inspect — relentlessly. Our agency ecosystems should be no different.
So, marketing-procurement colleagues, the next time someone asks why you’re pushing for 360° evaluations, innovation funds or collaboration KPIs, borrow Denis’s final mic-drop: “Clients get the work they deserve.” If we want work — and growth — worthy of our budgets, we must engineer the conditions for greatness and pay for outcomes, not just outputs.
Let’s get to work.
Thank you very much to Denis Budniewski for spending time with me to discuss and elaborate on his “Masterclass on Agency Performance.
