Clients Want Strategic Input, Biz Value from Agencies

January 23, 2012

cmo-agency-evaluations.jpgWhen reviewing and evaluating agency relationships, the majority of multi-national client marketers look at strategic contributions (57%) and business value created (56%), according to [download page] a CMO Council survey released in January 2012. Other key considerations include agency efficiency and effectiveness (50%), market impact and success of campaigns (42%), and creative excellence (42%). Yet although senior marketers appear to have an array of methods by which to evaluate their relationships, slightly more than two-thirds do no have solutions or hosted services that improve the agency benchmarking and evaluation process. Similarly, only about one-quarter have developed a best-practice model or formal guidelines for client/agency relationship management. More significantly, 65% do not employ any form of ad scoring or tracking services, and 38% rate their ability to extract optimal value and return from agency partnerships as poor or in need of improvement.

Alignment Leads to Improvement

The top technique for improving collaboration, output, and performance between clients and agencies is ensuring teams are fully aligned and in-sync with objectives and deliverables, cited by 71% of brand marketers. Other popular tools for improving relationships include identifying and addressing points of friction and disruption (52%), using or developing performance scorecards or metrics (40%), continuously auditing and assessing competency and effectiveness (39%), and refining marketing operational processes to maximize efficiency (37%).

Although campaign alignment is seen best for improving collaboration, that may be difficult to implement, at least among online advertisers: according to a survey released in January 2012 by Digiday, sponsored by Vizu, although nearly all (97%) brand advertisers reported wanting their primary marketing objective to be well defined in advance of their online campaigns, only 18% of agencies said they are able to establish a single objective against which ROI will be measured with their clients in advance of a campaign.

Clients Keep a Broad Eye for New Insights

Meanwhile, a search for new ideas may be driving brands to increase their volume of agencies on retainer worldwide: according to the CMO Council’s “More Gain, Less Strain,” the most important value and gain from outside agencies include fresh ideas, analytics, and perspectives (48%) and new methodologies and creative approaches (39%). About 3 in 10 brands cited quicker, more efficient turnaround of work, as well as objective third-party advice and counsel.

Agencies’ Client Retention Gets More Difficult

Results from the report indicate that agencies may have some difficulty holding onto their client relationships: almost half of the survey respondents report they are hiring specialized digital marketing solution and service providers to implement new social, mobile, and interactive strategies. Another 47% plan to build internal capabilities and use incumbent agency services less, while an additional 45% are bringing in outside consultants to help set up and structure digital programs.

In fact, only 36% of marketers are committed to their agency relationships this year, with 49% saying that they may consolidate or change their global agency rosters. And just 5% of marketers report longstanding relationships with their agencies. A notable 32% are looking at selective replacement in their agency rosters, 9% see increased turnover of resource, and another 9% are decreasing the use of agencies.

Other Findings:

  • When it comes to new areas of outside service provisioning and agency use, the majority of marketers are focused on mobile applications and mobile content (62%), social media engagement and buzz building (60%), multi-channel digital marketing (52%), web design, development, and performance improvement (51%), and SEO – paid and organic (51%).
  • Just 9% of marketers believe traditional ad agencies are doing a good job of evolving and extending their service capabilities in the digital age, in contrast to 22% who view their agencies as struggling to transition their business models and service offerings.
  • 58% of marketers are unsatisfied with the current process of measuring their agencies’ advertising effectiveness, and two-thirds expressed interest in adding new tools, technologies, and services for tracking ad impact, influence, recall, and response.
  • 55% of senior marketers do not systematically evaluate creative impact, and 58% are unsatisfied with the evaluation process associated with benchmarking their agencies’ creative advertising effectiveness.

About the Data: The CMO Council teamed with Ace Metrix in the second half of 2011 to conduct a quantitative audit of 250-plus strategic and operational marketing stakeholders involved in the supplier relationship management, performance evaluation, and procurement process.

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