4A’s and Advertiser Perceptions Partner for Survey on Current State of Agencies and Industry Trends
Los Angeles—April 2, 2017—Today at the 4A’s flagship conference Transformation, the organization and Advertiser Perceptions, a business intelligence firm specializing in global advertising, released the findings of a new study examining the current state of the advertising agency business. The survey found that 77 percent of respondents believe the role of lead agency is important.
The new survey questioned more than 150 marketing professionals and decision makers to better understand agency search methods, uncover key agency selection criteria, share client relationship preferences and highlight emerging agency trends.
The survey also explored the trends of clients moving business in-house and agency reviews, finding that 50 percent of respondents had already moved some pieces of business in-house, and another 30 percent have plans to do so. The top reasons for moving pieces of agency business in-house are that it’s more cost-effective, agencies are too slow or too traditional, or that the clients need to own all data from their marketing initiatives.
In 2016, Advertiser Perceptions revealed survey results finding 58 percent of marketers polled planned to review their agency within the next year. When asked to rank the top five reasons respondents would review their current agency relationship in this survey, the top three were: displeasure with performance (72 percent of respondents), new emerging technology developments in advertising (67 percent) and the need to expand capabilities (65 percent).
Despite the popular belief that agency-review decisions are set in motion by finance or procurement, only 8 percent of respondents indicate that chief financial officers make this decision. In the survey, 35 percent of respondents indicate it is the chief marketing officer’s decision to review the incumbent agency, and 28 percent tell us it is the decision of the chief executive officer. When it comes to the final selection of a new agency, 31 percent of respondents answered that the CEO makes the final decision, while 36 percent indicate it is made by the CMO.
“Last year, we did a white paper with the ANA that found that project work is on the rise, but this most recent survey clearly highlights the value marketers see from continuing to have a lead agency, despite the uptick in project work,” said Nancy Hill, president and CEO of the 4A’s. “When it comes to clients putting their agencies up for review, so many of the top reasons for this are fully within agencies’ control—it’s imperative that agencies are up to speed on new technology and that they’re delivering the work they promised; those are the basics.”
In terms of upcoming trends impacting the advertising agency business, respondents cited the following as those that will have the most impact over the next five years:
- Automation will result in less face-to-face client-agency interaction
- More emphasis will be placed on transparency
- We will see different pay structures that focus on paying for performance
- Advertising technology will become an increasingly important criteria for agency selection
“Reviews come down to performance and confidence. The CMO and CEO either want more than they’re getting from the agency, or they want new expertise they’re not seeing,” said Randy Cohen, president of Advertiser Perceptions. “Advertisers made it clear that advertising will be a performance business in the years to come, and results will be built into the contract and fabric of agency relationships.”
The survey of 158 key marketing professionals and decision makers was fielded online by Advertiser Perceptions on Feb. 13-24, 2017.
To see the full results of the survey, please visit: http://www.AdvertiserIntelligence.com/4As
About the 4A’s
The 4A’s is the catalyst for bringing together the right people in the right places at the right time to address the advertising industry’s most critical business issues. It provides leadership, advocacy, guidance and community to its members and the industry at large, with proprietary access to the people, information and tools needed to make smarter management decisions. Its mission is to help agencies become more successful. Visit the 4A’s at www.aaaa.org.
About Advertiser Perceptions
Advertiser Perceptions is the global leader in data-driven business intelligence for the advertising industry. Our exclusive insights, practical advice and expert guidance produce solutions that deliver results and enable our clients to thrive in today’s complex and competitive advertising market. For more information about our services or to arrange a private briefing, please contact us at 212-626-6683 or info@AdvertiserPerceptions.com.