Nearly three-quarters (75%) of major multinationals are reviewing their current agency arrangements, a study from the World Federation of Advertisers (WFA) and The Observatory International has found.
The study notes that many clients recognise their current roster set up is not working effectively, rating it just 5.7 out of 10, where 10 is fit for purpose. They are now looking at whether they have the right mix of agencies and capabilities in their external partners.
You only have to look as far as the big global reviews, such as Microsoft, Mercedes-Benz, Campbell Arnott's, Converse and dozens more, to see the first wave of mediapalooza is underway this year.
The study also found agencies were even more sceptical about the effectiveness of current roster arrangements, scoring them at just 5.2 out of 10.
The current dominant model of agency management is “multiple agencies managed individually by marketing” (81%), with “integrated lead agency” (44%) and “network agency with specialisms from same holding company” (39%) coming next.
Interestingly, the network agency of specialisms - the model currently being implemented by WPP and Publicis - is still the least common.
“These findings highlight the challenges that each side faces and there’s clearly plenty of improvement that everyone can make," WFA CEO Stephan Loerke said.
"Whatever roster arrangements brand's develop, they should ensure that they can deliver on their promises to their agency partners. Without that, no roster model will be able to work effectively."
Nearly 60% of marketers said they were looking to reduce the numbers of agencies on their roster over time. In answer to another question, just over 50% said there were seeking to increase the numbers of specialists they use. The good news for agencies is that 82% of advertisers do not foresee a world without agencies.
Agencies also feel that clients do not provide them with the right tools to deliver the expected results.
Collaboration can be hindered by internal structures (51%), poor quality briefings (49%), approvals and sign off processes (40%), lack of trained client personnel (40%), as well as lack of a clear data strategy (52%). All of which, they argue, undermine the quality of agency work.
Clients agree and nearly 50% recognised that their own internal structures may be an encumbrance to operating the most effective roster model. As a result, we've seen all the big agencies - Ogilvy, Y&R, Leo Burnett etc, undergo internal transformation to remain competitive against smaller, more agile agencies.
The biggest areas of concern for clients were return on investment measurement across channels, when it comes to informing the whole roster through data, analytics and insights, as well as clearly understanding the end-to-end consumer journey.
A total of 84% of clients also believe that agencies are struggling with Martech – and 71% of agencies agree – underlining the complexities of this area and the reason why management consultants have spotted an opportunity.
Roel de Vries, Corporate VP and global head of marketing, ommunications and brand strategy at Nissan, encourages advertisers to take the lead in developing a new kind of partnership if they truly want to achieve one to one marketing at scale.
"That requires new skills but also involves working closely with their agencies, which often have huge knowledge about the companies they work with," he said.
The findings are based on responses from 50 multinational marketers representing a total global ad spend in excess of US$69bn. A total of 26 agency representatives contributed, with more than 50% in global/regional roles and the balance evenly spread across the globe.
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