Agency of record (AOR)
An agency of record (AOR) is the agency a company formally appoints to own a defined scope of work, such as creative, media buying or public relations, on an ongoing basis. The appointment usually runs on a retainer. It makes that agency the default partner for the scope, as opposed to one hired project by project.
How an AOR is used
An agency of record (AOR) holds a named scope under a standing agreement. Most AOR deals run on a retainer: a fixed fee for a defined team and set of deliverables. The scope letter is the working document. It says which brands, channels and markets the agency owns, and what falls outside its remit.
Agencies prefer this arrangement. The Client-Agency AOR Relationship Tenure study found that "The majority of agencies’ top 10 clients are in AOR/retainer-based relationships".
A concrete case: tenure
Tenure is the measure most CMOs track for an AOR. It is counted in years from appointment to replacement. The study reported that independent agencies had longer AOR tenures (7.3 years) than holding company agencies (5.8 years). It surveyed both client-side marketers and agencies. It also pointed to the financial strain of repeated pitches.
For a CMO, tenure is a choice that carries a cost. Each review takes time from your team and from the agency. A new AOR also needs time to learn the business before its work improves.
Usual mistakes
- Treating the title as the contract. The title names an agency but does not define its work. Write the scope down and review it each year.
- Calling reviews on a calendar. A pitch with no performance trigger resets what the agency has learned and adds cost for both sides.
- Overlapping claims. Two agencies that both believe they own a channel will produce conflicts. Name who owns each channel and who settles disputes.
- An unaudited retainer. Each year, compare the hours and deliverables you received with the fee you paid.
When it matters
The AOR question comes up early in a new role, when you inherit an agency and must decide whether to keep it (see the first 90 days playbook). It comes up again before a review (see how to choose a marketing agency) and at budget time, when the retainer shows up as a fixed line. Put the AOR's scope, fee and tenure on one slide in your board deck.
Sources
Written by the CMO Tribune Desk and edited by Lila Odinaev. Every factual sentence was checked against a passage on the source it cites. See how we work, or report an error on the corrections page.