Regional agency scope 2009 : R3:GC

Here follows a summary of key client-agency trends.

Rise in the importance of regional marketing.

In this snapshot, 57 per cent of regional marketers perceived that influence at this level was on the rise. But the rise of regional involvement and influence, and a general shift to working with regional agencies has brought about a different working dynamic between marketers and their agencies, and its own share of unique challenges. Some of the key criteria for agencies to succeed at this level are: strong agency network collaboration, good working processes, and agency brands with equal strengths and skill sets in all markets.

 

Effective creativity and good media rate negotiation are what regional marketers desire the most in their creative and media agencies (respectively).

The core capabilities most sought after in creative and media agencies come as no surprise. Creative agencies earn their reputations through producing stand-out creative. But what clients really desire is not just original creative, but creative that is effective and achieves results. It is in this area that there is also a marked gap with agency performance falling short of client expectations. For media agencies, the most desired attribute is the agency's ability to negotiate the best media costs and rates. While there was a slight inconsistency in agency performance against this, the overall relative scores still indicated a good level of client satisfaction.

 

Digital media expertise is the Holy Grail.

The complexities of digital marketing are well documented and there seems to be an endless raft of digital media options open to marketers. Expertise in digital covers many areas - from strategy to online media, search, social media analytics, metrics and more. While clients have commended digital agencies on their creativity and knowledge, they also continue to be frustrated with the lack of tools and diagnostics to measure ROI and track the effectiveness of different digital media and overall campaign effectiveness. The rapid pace of evolution and development in this area has created a large knowledge/ understanding gap, for both clients and their agencies, one that has hindered budget growth in this area. 60 per cent of marketers stated even their own marketing teams' understanding of digital was not strong enough.

 

Marketers cite stronger preference for specialist digital agencies over their current creative/ media agencies.

Clients recognise the importance of digital media within their overall communications mix, but are generally dissatisfied with the digital service offering provided by their current creative and media agencies. In fact, out of 14 attributes tested, client satisfaction was the lowest for digital capabilities for both creative and media agencies. However the lack of understanding across the board (with clients and agencies) is behind this. As a results, 65 per cent of marketers claimed they would still prefer to use a specialist digital agency to handle their digital and interactive needs, even though the general preference is for fewer agency relationships.

 

Top 3 predicted growth digital areas are social media , digital strategy and search.

Within the digital world, the explosion of social media has been unsurpassed. The availability of multiple technology platforms where individuals can connect with each other on any topic of interest has been one of the reasons for its rapid growth. Amongst those agency professionals leading the way in digital marketing strategies, the general belief is that social media, digital strategy and search (SEO and SEM) will be the biggest areas for development for marketers over the next two years. Therefore finding an agency partner that has the required strength and expertise in these growth areas will be particularly crucial.

 

Fee based remuneration is the most widely used agency remuneration model.

With the exception of digital agencies, fee based remuneration is still the single most widely used remuneration model for creative and media agencies, which demonstrates a greater importance for long term core creative and media agency partnerships at the regional level. Conversely, where clients outsource their digital needs to specialist agencies rather than using their existing creative/media partners, the method of remuneration tends to be on a project by project basis (in 63 per cent of cases). This is likely due to the uncertain nature of many clients' digital strategy, and reflects the "try and test" nature of most digital assignments still in the market. The most developed marketers however are beginning to shift to AOR relationships in the digital (and other speciality) area, a trend that we will likely see increase as budgets for the digital component of marketing strategies increase.

 

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].