Study: The Top Five Causes of Friction in Client and Ad Agency Relationships

The evolution of the advertising industry demands that traditional agency services and client relationships evolve as well.

Only 9% of marketers believe traditional ad agencies are doing a good job of evolving and extending their service capabilities.

Marketing has become more complex. Traditional agencies must have new skills and fresh approaches to meet these new challenges. The “More Gain, Less Strain” survey offers a clearer picture on how traditional agencies are being challenged in their retention of client relationships.

Here are the CMO survey respondents rankings of the top five causes of pain and friction in their client/agency relationships: 

1. Lack of an agreed-upon set of analytics and metrics that defines success and failure.
2. Limited knowledge and comprehension of the client’s business
3. Lack of value-added strategic thinking.
4. Pricing and budgeting issues.
5. Integration of marketing plans and services.

Here are some additional key insights from this CMO study:

• Just 9% of senior marketers believe traditional ad agencies are doing a good job of evolving and extending their service capabilities in the digital age.
• Only 5% of marketers report longstanding relationships with their agencies and only 37% rate their relationships as relatively stable.
• 22% view their agencies as struggling to transition their business models and service offerings.
• 51% see their agencies as playing catch-up with regards to new technology, or acquiring but not integrating digital marketing capabilities.
• 48% of respondents report they are hiring specialized digital marketing solution and service providers to implement new social, mobile, and interactive strategies. Another 47% plan to build internal capabilities and use incumbent agency services less, while an additional 45% are bringing in outside consultants to help set up and structure digital programs.
• 58% of marketers remain unsatisfied with the current process of measuring their agencies’ advertising effectiveness.
• 60% of marketers state that agency selection has become more stringent, time-consuming and complex.

Selection of agency partners tends to be CMO driven, with 50% of CMOs reportedly making the final agency choice. This is not necessarily welcome news, as Forbes recently estimated that the average CMO has the least secure job in top management, at just over two years per stint.

The study also recommends 5 top techniques for improving client/agency collaboration, output and performance:

1. Ensuring teams are fully aligned and in-sync with objectives and deliverables (71 percent)
2. Identifying and addressing points of friction and disruption (52 percent)
3. Using or developing performance scorecards or metrics (40 percent)
4. Continuously auditing and assessing competency and effectiveness (39 percent)
5. Refining marketing operational processes to maximize efficiency (37 percent)

“Smart advertisers understand that good advertising comes from a partnership. It doesn’t come from an agency just delivering work, and it doesn’t come from clients trying to do it on their own.” John Ingersoll,Vice President, Marketing, Farmers Insurance

Click on the following link to download the entire Chief Marketing Officer (CMO) Council’s milestone report on client/agency effectiveness titled, “More Gain, Less Strain”. Be sure to read the Expert Prescriptions and Perspectives section.