Who’s Making Agency Selection Decisions, Anyway?

April 12, 2017

This article is included in these additional categories:

Agency Business | Business of Marketing | Marketing Budgets

As one might expect, CMOs are most likely to be in the driver’s seat throughout the process of agency selection, according to a 4A’s survey [download page] fielded by Advertiser Perception. But in certain instances, the marketing team cedes its influence to the CEO and executive management.

The study was based on a survey of 158 marketers who are in an executive level or higher, with a $10M or more spending level, and representing all ad verticals. Respondents were asked to identify the role with the primary responsibility for agency decisions along the different stages of the process.

While the CMO was the most-cited executive in each phase, the CEO’s role was almost as large in the decision to review the incumbent and in the selection of the final agency. In fact, for both of those stages, fewer than half of the respondents cited either the CMO and Marketing Department as the final decision-maker, as either the CEO, Executive Management or CFO took over.

Instead, the Marketing Department has its greatest responsibility during the agency search phase and in short-listing candidates.

As for the CFO? Fewer than 1 in 10 respondents dubbed this role the primary decision-maker in any phase, including the decision to review the incumbent.

Consultants’ Role

Many marketers believe consultants are useful and necessary to agency selection and some 72% of marketers reporting using them. Consultants were most often used during the search/short list process (32%), or at the start of the search (27%), and almost 1 in 5 respondents said they use consultants on an ongoing basis.

Reason for Review

The biggest issues that prompt companies to review agencies include unsatisfactory performance, changes in emerging technology, needing expanded or specialized capabilities, and billing practices. Interestingly, the same four general factors that led to reviews also were the reasons why they stayed with a firm: people, money, creativity and staying ahead of emerging technologies.

Emerging Trends

As technology rapidly changes, the ability to stay on top of tools remains a key factor for vetting agencies. (Not surprising, given how critical technology know-how has become to the marketing position.) Some 94% of marketers agree that it’s important for an agency to collect, use and interpret data, and in fact 84% think they should strongly consider the advertising technology of an agency when making a selection.

Agencies aren’t only in a competitive battle against other agencies, but also against their own clients: in an effort to gain greater control and lower expenses, some businesses have started to move work in-house. Four in 5 respondents reported that they either had plans to move or had already moved some/all work in-house, citing greater cost effectiveness, speed, less traditional customs and the ability to own all the data from a campaign.

About the Data: Advertiser Perceptions surveyed 158 marketers who are in an executive level or higher, with a $10M or more spending level, and representing all ad verticals.

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