Topic
- Business Development
New York, NY – June 11, 2024 – The 4As (American Association of Advertising Agencies) a membership-based U.S. trade association for the advertising and marketing communications industry, in partnership with the ANA (Association of National Advertisers), an organization that serves the marketing needs of 20,000 brands and Advertiser Perceptions, a leader in providing research-based strategic market intelligence to the media, advertising, and ad tech industries have released “The Cost of the Pitch II – the Rise of Value”, an in-depth follow-up to the groundbreaking 2023 Cost of the Pitch report. The 2023 report identified the costs incurred by agencies and clients associated with an account review, and highlighted a client focus on agency cost during the agency selection process. The newly released report examines the role of value in the client-agency relationship.
The study also investigated other key factors responsible for a successful, long-term client-agency relationship. The methodology involved an online survey of 173 individuals representing brands and agencies that are among the biggest ad spenders in the U.S. The respondents were required to have been part of a direct client-agency relationship and been involved with one client or agency for at least 3 years.
“The 2023 Cost of the Pitch research initially explored the tangible and intangible costs associated with the account review process. However, industry feedback highlighted an important area for further exploration: value. This insight led to a deeper investigation into the role of value in these relationships, how value and cost intersect, and how one defines value,” said Greg Wright, SVP, Brand & Media at the ANA, who led the project from the ANA side.
The research revealed five central themes emphasized as key to the client-agency relationship: trust, value, cost, transparency, and respect. 90 percent of clients indicated that when engaging with an agency, the overall value and long-term ROI of advertising campaigns outweighed cost considerations. 56 percent of respondents cite trust as most important for a successful long-term relationship. There is a widespread recognition of the importance of open communication and shared objectives in fostering long-lasting relationships. “Our study found that while cost is indeed a critical entry point for agency selection, the overarching importance of value becomes predominant overtime. Despite its acknowledged importance, only 10 percent of agencies and 5 percent of clients have a formal, corporate-backed definition of value. This lack of a standardized definition complicates the measurement and assessment of value within the industry,” Wright commented.
“Our findings advocate for a unified approach to defining and quantifying value, suggesting that both parties would benefit from collaborative development of value assessment tools that consider the hard and soft costs of value delivered, including intangibles. Such tools would ensure that both clients and agencies can align expectations and contributions effectively,” said Matt Kasindorf, SVP, Business Intelligence and Insight, 4As, who led the initiative on the 4As side. “Focusing on client needs and goals and delivering data-driven insights that prove ROI are the top areas in which agencies can demonstrate their value.”
“For long-term strategic benefits, it’s more critical than ever for agencies to demonstrate value consistently beyond cost. Clients would be well-advised to evaluate potential partners not only based on immediate costs but also on their perceived ability to deliver sustained value,” he added.
In light of these findings, the 4As and ANA recommend clients and agencies consider the adoption of a Client-Agency Relationship Management program that emphasizes strategies such as regular 360 reviews to foster continuous improvement and alignment in client-agency partnerships. “A refined client-agency relationship management program will help to ensure business growth,” suggested Marla Kaplowitz, 4As CEO.
The report is available to 4As and ANA members free of cost and can be downloaded at https://www.aaaa.org/the-cost-of-the-pitch-ii-the-rise-of-value/.
About the ANA
The mission of the ANA (Association of National Advertisers) is to drive growth for marketing professionals, brands and businesses, the industry, and humanity. The ANA serves the marketing needs of 20,000 brands by leveraging the 12-point ANA Growth Agenda, which has been endorsed by the Global CMO Growth Council. The ANA’s membership consists of U.S. and international companies, including client-side marketers, nonprofits, fundraisers, and marketing solutions providers (data science and technology companies, ad agencies, publishers, media companies, suppliers, and vendors). The ANA creates Marketing Growth Champions by serving, educating, and advocating for more than 50,000 industry members that collectively invest more than $400 billion in marketing and advertising annually.
About Advertiser Perceptions
Advertiser Perceptions is the leader in providing research-based strategic market intelligence to the complex and dynamic media, advertising, and ad tech industries. Our curated, proprietary Ad PROS Network and deep relationships with the largest advertisers provide clients with an unbiased view of the market, their brand, and the competition. Our experts provide timely and actionable guidance enabling clients to improve their products and services, strengthen their brands, and drive more revenue.
