How We Renegotiate With Agencies: Advice for CMOs

Media Palooza is back, and billions in media spend are already on the move. Yet as we explain in this #MediaSnack episode, up to half of those shifts will not go through a public pitch. They will be settled quietly in closed-door renegotiations with incumbent agencies.

For CMOs, Procurement Directors, and Global Heads of Media, that creates both an opportunity and a trap. Done well, renegotiation upgrades capability, culture, and commercial value without the disruption of a full review. Done badly, it locks in yesterday’s model just as competitors reset for the next decade.

This guide turns the episode into a practical playbook. You will see where renegotiation beats a pitch, how to create real jeopardy without theatrics, and what preparation separates a token commercial tidy-up from a genuine media transformation.

The ID Comms Breakdown

A strategic media agency renegotiation lets you upgrade scope, talent, technology, and commercial terms with your incumbent agency while avoiding the full cost and friction of a competitive pitch. The trick is to prepare as rigorously as you would for a review and hard-wire real jeopardy so the agency knows you are pitch ready if the deal falls short.

Whats going on?

We are seeing a marked shift in how large advertisers navigate Media Palooza. In the first big Media Palooza cycle, almost all ID Comms work happened in the open via classic multi-agency pitches. Today, they estimate that roughly half of their engagements are now quiet renegotiations with incumbents.

This matches what is happening in the market. COMvergence data, cited in an ID Comms Media Palooza analysis, shows Publicis Media capturing close to one third of global media billings that moved in the most recent cycle. Many of those moves, like PepsiCo, Microsoft and LVMH, involved no traditional multi-agency pitch at all.

What are the implications?

For advertisers, the implication is clear: you now have three real routes to market. You can run a high-noise, high-reward competitive pitch. You can orchestrate a closed-door renegotiation with your incumbent. Or, in rare situations, you can execute a direct move to a new network without a formal RFP.

Closed-door renegotiation is quickly becoming the default option when you broadly like your agency but need a serious upgrade in talent, transparency, contract, or digital governance. It avoids the disruption, stakeholder fatigue, and political risk of a full review. At the same time, if you do not bake in jeopardy, you risk leaving millions of dollars of value and capability on the table.

How should marketers be thinking?

Our core message is not to treat renegotiation as a soft commercial tidy-up. Treat it as a transformation sprint. The smartest CMOs prepare as if they were going to market: they map a three year ambition, build a detailed evaluation framework, and gather the data and diagnostics that would support a competitive pitch if they have to pull that trigger.

They also lean on expert facilitation. In a competitive pitch, an advisor must stay completely neutral. In a renegotiation, that same advisor can act as an intermediary, pressure testing the agency offer off the record, nudging both sides toward a deal that upgrades capability without compromising integrity.

Why renegotiations are reshaping Media Palooza for 2027

Renegotiation is attractive right now because the old lever of media price alone is exhausted. As more investment flows into biddable platforms, there is less easy margin for agencies to trade away. That pushes value into strategic thinking, data, AI, and the quality of your core team.

Recent high profile moves illustrate how fluid this landscape has become. According to Adweek, PepsiCo spent about 5.4 billion dollars on marketing in 2025, with 3.4 billion on advertising. They handed that enormous media remit to Publicis without a conventional multi-agency pitch, following a focused capability assessment instead.

A similar pattern is emerging across Microsoft, LVMH in Asia Pacific, and Paramount, as reported by Digiday. These are not whimsical moves. Behind the scenes, there is still robust evaluation of capabilities, data stacks, and talent models, just without the theatre of a public review.

For most advertisers, the lesson is not that you should copy PepsiCo’s exact path. It is that you can change or upgrade your agency set without automatically triggering a noisy pitch. A well structured renegotiation lets you modernize scope, reset performance incentives, and align AI and technology investment with your roadmap, all while keeping your best incumbent people in place.

How to structure a 'high-stakes' agency renegotiation

We stress that the most effective renegotiations feel just as serious as a full review. The preparation workload is similar. The difference is that you have one agency at the table, not four, which places much more pressure on your evaluation framework.

Start by defining your transformation agenda in concrete terms. Are you trying to tighten governance for digital investment, modernize your contract, change the talent mix, or reset remuneration to reward effectiveness instead of hours? If you cannot articulate the top five improvements you need, your renegotiation will drift into generic fee squeezing.

Next, design an evaluation framework that can work with a single data point. In a multi-agency pitch, you triangulate between offers. In a renegotiation, you need pre-agreed criteria, scoring, and thresholds for what good looks like. Many brands lean on ID Comms to build this framework so that, if needed, the same structure can roll straight into a competitive review.

Finally, embed a clear sense of jeopardy. As David puts it, the advertiser should be able to say: "If I do not get what I want through this process, I have all of the thinking and materials needed to trigger a competitive tender." When your incumbent understands that you are genuinely pitch ready, the quality of their proposal and their speed of response improve dramatically.

When to pitch, renegotiate, or recalibrate with agencies

The episode sets out a simple decision lens. If the relationship with your incumbent is fundamentally broken, you suspect structural misalignment, or you need a clean break for governance reasons, you still need a full competitive pitch. That is the right route when you want to re-open the whole market and are ready to absorb the disruption.

If the relationship is broadly solid and there is headroom for improvement, start with renegotiation. This is particularly relevant in Media Palooza years when agencies are time poor and more selective about the reviews they defend. Launching a formal pitch too fast can trigger your incumbent to walk away rather than invest in a defense they think they are statistically unlikely to win.

Alongside those big moves, we advocate a third, often neglected option: annual recalibration. Once a year, typically in Q4, you should review scope, technology requirements, remuneration structure, and contract hygiene for the year ahead. Many advertisers use an ID Comms media roadmap workshop to prioritize these initiatives. This kind of structured recalibration sets you up for success next year, whether you later choose to pitch or renegotiate.

If you would like to confidentially discuss your own Media Palooza gameplan and options to protect your competitive advantage in media, get in touch with ID Comms and speak directly with Tom, David, and the team.

Frequently Asked Questions

Q1. When is an agency renegotiation better than a full media pitch?
Renegotiation works best when you broadly like your incumbent agency, believe they can upgrade, and want to avoid the disruption and politics of a full competitive review.

Q2. How often should we run a major agency renegotiation?
Tom Denford and David Indo recommend a major renegotiation every two or three years, supported by lighter annual recalibrations on scope, contracts, and governance.

Q3. Do we still need a threat of going to pitch?
Yes. The most effective renegotiations include clear jeopardy. Your agency should understand that if their proposal falls short, you are ready to trigger a competitive tender.

Q4. What preparation do most advertisers underestimate in a pitch?
Many teams underinvest in building a robust evaluation framework. With only one agency at the table, you need clear criteria and scoring to judge their offer fairly and rigorously.

Q5. Can we switch agencies without a formal pitch?
Yes, but it is rare and should be heavily evidence based. Recent examples like PepsiCo, Microsoft and LVMH involved focused capability assessments instead of classic multi-agency RFPs.

Q6. How does agency renegotiation reduce internal friction?
Because you keep one incumbent agency involved, there are fewer stakeholder meetings, fewer chemistry sessions, and less disruption to in-flight campaigns compared with a full review.

Q7. What role can external advisors play in agency renegotiation?
Firms like ID Comms act as facilitators, shaping the brief, designing evaluation frameworks, and having off the record conversations with agency leaders to close gaps before final meetings.

Q8. Is there less commercial value without competing agency bids?
There can be, which is why you must design clear walk away points and be willing to pivot to a pitch if needed. The jeopardy keeps commercial discipline on both sides.

Q9. How does AI and technology factor into agency renegotiation?
Use renegotiation to clarify your data, AI, and tech roadmap. For example, you can tie fees and incentives to how effectively the agency scales automation and analytics in your media.

Q10. What is the minimum agency 'renegotiation' we should do this year if we are time poor?
At minimum, run a media roadmap or recalibration workshop. Clarify next year’s scope, tech requirements, and contract updates so you are not trying to fix structural issues mid campaign.

Episode Transcript

Up to half of all agency shifts during the upcoming Media Palooza are not gonna be public pitches. They are gonna be quiet, closed-door negotiations. And so today we are gonna share exactly how we renegotiate directly with agencies on behalf of advertisers.

And whilst you might know, David and I and ID Comms, our company, as one of the world's leading advisors on agency pitches, sometimes, often, our work is entirely behind the scenes and it is not reported in the trade press.

So today we are gonna share what those routes to securing amazing agencies are when you do not want to call a full competitive pitch. Live from New York.

And live from London. It is #MediaSnack Live.

Hello, I am Tom Denford in New York.

And I am David Indo from London. Welcome to #MediaSnack Live. It is our weekly roundup of all the important news and stories and trends you need to know about the global media and marketing industry. In every show we ask, whats going on? What are the implications for advertisers? And what should marketers be thinking about next?

Thanks for joining us. Let us get into this week's show.

Right, mate, so we are gonna talk about renegotiation. And as usual, for those who have not watched #MediaSnack before, this is a live stream. We tell you whats going on, what are the implications for advertisers, and then what marketers should be thinking or doing as a result.

We want this to be super helpful. Just to remind you, we have been in business for 15 plus years as ID Comms. And our ambition and our mission is to help all advertisers get good at media.

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We spent a lot of time talking about Media Palooza. We did some analysis a few weeks ago and we said it is probably about 200 major pitches. You can see that building now. We are building up to that. It is gonna run next year. Agencies are gonna be super busy.

Not all of that ends up in the trade press, David, right?

No, it does not.

So whats going on?

Increasingly, advertisers are being a little bit more strategic in the way that they engage with their agency partners and the way that they look to improve the terms with which they contractually work with those agencies.

There are three broad options that an advertiser can take. There is the pitch, the competitive tendering process, which is high noise, high risk, high reward. Those are the ones you see in the big trade press.

There is the recalibration on the further side. And I am gonna talk a little bit about what I mean by recalibration later in the advice that I give to marketeers.

That is still very important. But the bit in the middle, the option in the middle, is a renegotiation. It sits under the radar. Normally it is conducted directly with the incumbent agency. So there are no other agencies involved.

The opportunity for the advertiser in this option is to try and secure improved terms, to make improvements in the areas that need work, like the commercial terms, the contract, and so on, without going through the disruption and the high profile nature of a competitive tendering process.

Increasingly, as more and more advertisers see less immediate commercial opportunities through media price reduction, because more of their money is migrating towards digital channels, they are taking a more strategic view to recalibrating and improving those agency relationships.

So renegotiation is a preferred way of getting improved terms for many advertisers.

However, and this is the big but, what they need to do, and what the most effective renegotiations have at the very heart of them, is a sense of jeopardy.

So this is not a gentle discussion across a board table. This is an advertiser that is preparing themselves with the level of diligence they would use for a competitive tender, because what they are suggesting to their incumbent agency is that, "If I do not get what I want through this process, I have all of the materials, all of the content, all of the thinking, all of the strategy, all of the evaluation that would enable me then to trigger a competitive tendering process."

That sense of jeopardy is absolutely critical within the renegotiation.

We are seeing that in Media Palooza. In the first Media Palooza, almost all of our work was done in the open through competitive tenders. Now we would probably say that half of our engagements in this space are done in closed-door renegotiations with agencies.

There is also another emerging trend we have been talking about. We did a whole episode on it last week, if you want to go back and look at the big Coca-Cola pivot, which talked about the situation that Coca-Cola finds themselves in now, having been somewhat gazumped by Pepsi. Pepsi kind of stole their agency. That is the feeling.

But there are advertisers who are just moving account as well, directly. That is not a renegotiation, but it is another dynamic in the marketplace, and it seems much more common now.

Some of these we are involved in, some not, where an advertiser says, we are not gonna pitch, we know where we want to go. Can you do a direct deal with that agency, can you help us?

That is very sensitive surgery.

There are three very high profile brands that have done that. Microsoft did that. They left Dentsu and went to Publicis. Then you have the high profile most recent example, Pepsi, and then LVMH across Asia Pacific. They decided that their relationship with WPP was going to change, and they awarded their business in that region to Publicis.

So obviously Publicis is doing something right. They are delivering a narrative that is very seductive to certain advertisers.

But let us be really honest. These are not knee jerk reactions. This is not an arbitrary decision to leave one agency and award the business to another. What happens in many of these cases is a capability assessment.

It might not be a traditional, conventional pitch process with all the stage gates, but there will be a thorough and robust capability assessment, perhaps only with one agency. In these three examples it was just Publicis.

They are designed to stress test that agency and make sure the capabilities are reflective of that advertiser's ongoing needs. And Publicis are obviously very successful at that. That seems to be the common thread through those recent deals.

Over the years, ID Comms has worked with brands that have done exactly that. Sometimes it can be as simple as a new CMO coming in who had a relationship with an agency. They want to move to that agency because they know and trust that team.

Then you have to do all the diligence, aligning stakeholders and making sure everyone is happy, and that it works on both sides.

So they look like simple moves, but there is a lot of work behind them.

One thing we always say to advertisers is that even if you are going to renegotiate, it basically involves the same amount of preparation as if you were going to run a competitive pitch. The execution does not involve multiple agencies, so it can be done faster and more simply, but the preparation is just as diligent.

We are talking about a renegotiation that is part of a transformation agenda or an upgrading agenda. It is not tinkering around the edges.

In practice, the greatest effort lies in preparation. You need an evaluation framework that is very well thought out, because you have only got one input going into it.

When you are running a competitive tendering process, with two, three, four agencies, you can triangulate where the best thinking or the best pricing is, because you have competing agencies all responding to similar asks.

When you have only one agency inputting, the evaluation has to be really well thought out. That requires specialist thought to create the frameworks and evaluation thinking to judge that agency's performance.

If you are thinking about renegotiating, and as we say, when we are talking about renegotiating we mean a wholesale upgrade of your existing relationship, this probably should be done every two or three years.

So much changes and moves on that you have to keep up with it. Think about getting help from someone like ID Comms, even if you think you are only renegotiating with your existing agency. There is a lot of prep to do, and you do not have the stimulus of other agencies participating, so you have to be disciplined and focused on the questions you are asking.

It takes a lot of work to do a really good negotiation, but it will pay back. The great value is that you are not having to go through the disruption of changing agency.

Let us think about some of the implications of a renegotiation versus a pitch. First, it avoids friction and disruption. A competitive review is a risk and reward equation. It is disruptive and distracting for many stakeholders.

ID Comms takes a lot of the heavy lifting away from stakeholders in a pitch, but there are still lots of things to read, evaluate, and decide. A renegotiation requires the same amount of prep but reduces the friction and disruption. It is a lower stress route to market to get updated and upgraded capabilities.

Secondly, if you actually like your incumbent agency and there is a good chance you will stick with them, a renegotiation is a very good first stage. The best renegotiations are where there is implied or explicit jeopardy that if it does not go well, you will have to go to a competitive review. That focuses minds on both sides.

If you launch a competitive review, what we are finding, more than years ago, is that incumbent agencies may simply walk away. They can be more discerning in what they defend, given the cost of participating.

So that is another reason to think about a renegotiation, especially if your incumbent can upgrade and transform to the levels you want, and you can get the commercial framework in place.

You can use a renegotiation as a gentler process of consultation and discovery. You can go on a journey with your incumbent agency and ask them questions you might feel are silly in a full pitch.

ID Comms is always in the room to help ask the silly questions. Agencies can make you feel stupid because they are so capable and articulate. We ask the silly questions for you.

Doing that with your incumbent agency can be a gentler process. We have a renegotiation brief. We say, here is what we are thinking about, here is our transformation agenda for media, and we ask the incumbent agency to reset with a blank sheet of paper. How would they service you if they were pitching you again?

It can be a friendly process where you inspire each other to be amazing.

There is a trade-off in the commercial value, because in a competitive pitch you might negotiate harder with two agencies in a final, whereas in renegotiation you have one at the table. That is why you need jeopardy and a clear cliff: if it does not work out, you go to something else.

Typically, a renegotiation has less competitive tension and therefore less immediate leverage, unless you design the process well.

From our side, the implications are interesting too. Our role as facilitator changes. When we run a competitive tendering process, our role has to be completely clean and impartial. Communication to agencies must be consistent. There can be no suggestion of favoritism.

When we help an advertiser negotiate with their incumbent, the rules change. Our role is to enable the deal to happen. We act as an intermediary. We can have off the record conversations with agency leaders to give them an indication of where they are a little low or soft, where there are concerns in their strategic talent offering.

We are able to provide more colour and depth ahead of the big face to face meetings to make those meetings more effective.

We really enjoy understanding where the client is going with their response to the negotiation feedback, and enabling the agency to better understand nuanced needs so we can bring the two together.

We are never really able to do that within a tendering process, because we must have a level playing field. In a negotiation, we can add greater influence to enable the deal to happen.

We are also launching a survey on advertiser confidence in agency AI and technology. Completing it will give you a benchmark of your position versus the industry. That is helpful as you go into Media Palooza or a negotiation with agencies.

Finally, what should marketers be thinking?

First, decide whether to pitch or renegotiate. Do a thorough risk assessment of the upside of a tendering process versus a closed-door renegotiation. If the relationship is solid and there is scope to develop further, go to renegotiation.

Second, be very clear what you are looking for from a renegotiation. What are the areas within your partnership you want to improve? Talent, pricing, transparency, contract? Those become the basis of your negotiation strategy and brief.

Third, be clear how you will evaluate your incumbent's response to the brief. With only one agency input, you need clarity on evaluation.

And finally, take it as seriously as a competitive tendering process. The level of application, attention and effort your team puts into a renegotiation will be directly proportionate to the response you get. This can improve your efficiency by millions and drive greater effectiveness.

In addition, going into the final quarter of the year, whether you have a brilliant or poor relationship with your agency, you must prepare for success next year. You need to look at your scope of work, your technology requirements, your remuneration structure, and your contract.

This is recalibration, not renegotiation, but it positions you and your agency partnership for success. It should happen every year, not every three years. ID Comms runs media roadmap workshops in October and November to help brands organise their media priorities and strategic initiatives for the year ahead.

If you are a brand, procurement, or marketing leader thinking about the impact of Media Palooza, you can run a renegotiation through it. We think half of the negotiations will be closed-door, one-on-one renegotiations. You can start planning now.

Very good advice. You have sold me on renegotiation. It seems like the best way forward. It is a really good start point.

We will finish up here. We will see you next time.

Thanks for watching #MediaSnack Live. If you found it helpful and want to learn more, head to idcomms.com to get more tips, tools, and resources to help you get good at media. We will see you next week.