Monday, January 19, 2009

Clients Unimpressed by Their Agencies - Still Won't Switch

Clients Unimpressed by Their Agencies - Still Won't Switch

January 19, 2009 // Marketing VOX

Only 41% of marketing executives rate their current happiness with their
ad agency an 8+ on a 1-10 scale.

Still, 62% say they still would likely use their agency again, according
to a survey from by Reardon Smith Whittaker <>

These results suggest that willingness to hold on to an agency is most
likely driven by a feeling among clients that their agency's performance
isn't bad enough to justify termination - especially in light of the
large amounts of time, effort, and energy involved in changing agencies,
MarketingCharts writes
> .

The survey, undertaken to determine the overall level of satisfaction
with agencies and trends in the industry, found that a key challenge for
agencies in maintaining client happiness is keeping the "fire burning
bright" - after the initial win. Only half (50%) of clients say their
agency's performance actually matched up with their expectations when
the agency was first hired. These low ratings are a function of a lot of
over-promising during the pitch phase or just general waning enthusiasm
on the part of the agency and marketer after the "marriage," RSW

Additional survey findings:

* The overall tenure of agencies has remained flat since 2006.
* Marketers are not afraid to make changes if things aren't going
their way and many seem to enjoy it. A significant number of respondents
say they either "look forward to it" or "find it exciting" when looking
for a new agency.
* Skepticism about what marketers feel they can expect from
agencies appears to be a growing trend, RSW said. Over the past three
years, there has been a steady increase in the number of marketing
clients who feel uneasy with the agency world.
* Only 18% of clients say they have some kind of pay for
performance program in place (as compared with 23% in 2006). However,
while this type of model may not be taking hold, marketing clients are
shifting to digital mediums where success can more easily be tracked
(e.g. click-through rates, acquisition rates for e-campaigns).
* Issues related to "strategy," "creative," and "being proactive"
were all top areas that marketing clients said were key deficiencies
that trigger reviews.
* 61% of clients say three to four is typically the number of
agencies they consider when conducting a review.
* There is a decline in the percentage of companies stating that
they have an approved list of agencies from which they can choose. Only
18% of marketing clients state that this is a process that their company
follows. This compares with 23% stating they had an official roster
policy in 2007 and 22% in 2006.
* 24% of marketers said they had a procurement specialist involved
in the review process. Though this is not significant growth over last
year (21%), this number might increase in light of mounting ecomomic
pressures.The aspects of new business pitches that are most critical to
clients in deciding whether to hire an agency are an understanding of
the company and the market, and the quality of the creative:
* More clients are seeking specialized services to address their
needs. This is consistent with the three year trend - where there is an
apparent decrease in the number of "full service agencies" being
assigned business among the clients sampled since 2006.
* In terms of types of specialized services, the majority of
clients are particularly interested in digital.

About the research: The 2008 Client's Perspective on Agencies
<> was completed by 184 key
marketing decision makers from across the US during November, 2008. This
study was commissioned by RSW. The sample came from RSW's database of
decision makers each with marketing budgets estimated to be in excess of
$1M per year. Some of the larger companies represented include Citibank,
General Mills, Hoovers, Abbott, IBM, Alberto, Bell South, Heinz, Bayer,
Dunkin Donuts, GE, Rubbermaid, ESPN and others.


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