India agency scope 2009 : R3:GC

A summary of key client-agency trends.

Creativity is the key criteria for creative agency selection, satisfaction levels and agency change, gaining over 90 per cent in a raft of measures.

Creativity is revealed across a raft of measures as the most important attribute that marketers search for in a creative agency, and the critical measure for agency success. Promisingly, we see creativity / great ideas rated as the best quality of Indian agenices as a whole. However, perhaps because of this persistent desire for great creativity, and specifically more effective creativity, we also see it listed high on the list for areas to improve, and the key reason for why clients would hypothetically change agencies.

 

A focus on media tactics: media planning/ strategy mentioned by just 53 per cent of marketers.

74 per cent of marketers mentioned strengths in negotiating/buying when describing their ideal media agency, vs just 53 per cent for media planning/strategy. Additionally we see buying/negotiation rate 8.8/10 in average importance of agency criteria, the highest result. Combined results across various measures show a focus on valuing the more tactical sides of service: good negotiation/buying skills, instead of value placed on collaborative communications strategy and channel planning.

 

Agency-Marketer marriages are amongst the shortest in the world, at just 3.5 years on average.

In India we see average media agency-advertiser relationships lasting just 3.4 years and creative agencies at 3.6 years. This is not as turbulent as China with an average creative agency-client marriage lasting just 2.5 years, but is a far cry from Europe and the US at 6.8 years tenure. These short term relationships create a constantly revolving door with a resultant high cost, low productivity model for marketers; more frequently engaging agencies as executional suppliers rather than strategic, business- building partners.

 

Pitch is still king: used by 63 per cent of marketers for creative agency selection and 66 per cent for media.

A creative/strategic pitch topped the list of creative agency selection methods, used by 63 per cent of marketers, followed by a test assignment/trial at 41 per cent. For media agencies it was similar, with a strategic/rates pitch used by 66 per cent of marketers followed by the test assignment/trial by 50 per cent. The high pitch rates coupled with short agency-client marriages suggest there are ways to improve the pitch process or look at other methods.

 

Digital is the lowest of the priorities, and 33 per cent of marketers still handle the function internally.

Provision of digital services rates the lowest on the list of importance for markers when it comes to their creative agencies - gaining just 6.09/10 average importance, and second lowest on the list for media agencies (provision of digital media planning and buying). Further, 33 per cent of advertisers interviewed manage some of their digital planning and buying internally, and 30 per cent manage their own digital marketing content.

 

Fee based remuneration is amongst the lowest in the world, and use of commission at up to 56 per cent.

We see that just 44 per cent of marketers are using a fee based remumeration with their creative agencies, whilst 35% are on commission. Use of commission dominates even more so for media agencies, at 56% vs just 26% on fee/retainer. These figures show that the inevitable shift from commission to fee based remuneration, as has occurred in developed markets and continues to occur in developing markets, is slower than anticipated and even slower than in China. Additionally, use of incentive payments is at just 4 per cent for creative agencies and 12 per cent for media agencies.

 

High agency knowledge and ‘celebrity' is the hallmark of an established industry, with 162 industry professional mentions.

There is a comparatively high level of awarenss of creative and media agencies in India, with marketers being able to mention 7.5 creative agencies on average (vs 4.5 in China), and 4 media agencies. Additionally, key agency talent have become awareness drivers for their agencies, with marketers being able to name creative agency professionals 162 times (across 237 marketers; a ratio of 0.7). This compares to Brazil with a ratio of 1.2 and China of just 0.4.

 

Please note this is a brief summary of Part One of the Agency Scope Study only. All individual agency perception and performance results are confidential to subscriber agencies. For more information please contact Sally Warren at [email protected].