Staff Reporters
Jul 19, 2022

Agency dissatisfaction drives growth of in-housing: WFA

Nearly seven in 10 respondents to a survey from the World Federation of Advertisers and The Observatory International survey said they had recently made, or planned to make, changes to their agency roster.

Agency dissatisfaction drives growth of in-housing: WFA

Agency networks have been hammered by the Covid pandemic and compelled to shape shift by the sharp growth in digital business. Now, a new report from the World Federation of Advertisers and The Observatory International suggests more trouble in store for the industry, with most advertisers likely to recast the way they work with external agencies. 

This dissatisfaction has also pushed these advertisers to grow their in-housing capabilities. Eighty percent of respondents now have an in-house agency set-up of some shape or form, up from 57% in 2020, and a further 13% say that they are considering establishing one.

The findings are based on responses from 32 advertiser companies across nine different sectors. Total annual respondent spend was more than $55 billion, according to a media statement.

These changes may have been brewing for a few years and been catalysed by seismic shifts in the industry, this report contends. Previous WFA research in 2018, found that major multinationals recognised that their roster set-up was not meeting their needs sufficiently, scoring them an average of only 5.7/10.

This also pushed advertisers to shorten their agency roster, with 60% of clients looking to reduce the number of agencies on their roster. Data from the 2022 survey now reveals respondents most commonly work with between one to twenty-five agencies across all marketing disciplines. 

"The accelerating rate of change in consumer behaviour and digital usage makes it highly likely, however, that most rosters are heading for a period of constant evolution as brands seek new ways to be more effective with their marketing communications,” says Julia Kraft, senior manager of global marketing services at the WFA.

This study seems to suggest that agencies face an uphill battle, with falling client satisfaction and growing inclination to change agency partners. Around 75% of major multinationals said that they were ‘somewhat satisfied’ or less with their current agency roster structure.

Nearly seven in 10 (69%) had recently made, or planned to make, changes to their roster. Only 25% of respondents were ‘very’ or ‘extremely’ satisfied with their current arrangements.

While advertisers may have shown a strong inclination to shuffle their agency roster, it may be hard for them to measure the performance—or lack of—from these shops. This study reveals that one third of clients stated that they either did not use, or did not have, a consistent agency performance measurement and evaluation approach.

 

Source:
Campaign Asia

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