Agencies' optimism about transparency is overshadowed by marketer concerns for their business models

Advertising agencies’ hopes for an unadulterated relationship with their clients have been tempered by the suspicions from marketers that they are doing what’s best for them rather than the brand, a study has found.

The findings ignite an oft-debated issue across adland, with agencies and marketers divided on what needs to be done to restore trust. However, it would appear that agencies harbour stronger hopes that a resolution is possible, given that 38 per cent of an ID Comms study of 140 responses - that also included senior advertisers - belived the relationship would get better. And while 39 per cent of agencies said the relationship would get worse and nearly a quarter (23 per cent) said it would stay the same, advertisers were far more unequivocal in their view.

Just 7 per cent of advertisers believe trust would improve “a lot”, found the report, compared to 15 per cent for agencies. US advertisers were event more sceptical than their continental counterparts, with 17 per cent predicting trust in media agencies to drop “a lot” compared to 11 per cent for those based in Europe.

Those musings on the future were somewhat offset by the feeling some advertisers have about current levels of trust, which sees the US and Europe executives flip sides. US clients were slightly more positive about the current levels of trust with 61 per cent, describing them as “average”, 26 per cent as “low” and 13 per cent as “high”. Conversely, some European marketers were very negative with 14 per cent saying trust levels were “very low” and 22 per cent describing them as “low”.

Despite the disparity in optimism, both agency and advertiser understand how key trust is to fruitful union. Most (77 per cent) agreed or strongly agreed that a tight relationship will “tend to deliver a stronger marketing performance”. And some of the areas the report found clients are pivotal to forging those bonds were “how agency group buying/share deals work" (62 per cent) and “how the agency manages client data and uses it for decision making” (52 per cent).

“We want to show how transparency in its broadest sense, as a business principle, can deliver benefits for both advertises and their agencies,” said Tom Denford, chief strategy officer at ID Comms.

“The challenge is that, as this survey clearly shows, issues such as transparency in planning and data, all of which are critical to a trusting relationship, are overshadowed by advertisers' concerns around the business models that have been adopted by the big agency groups.”

While transparency issues between agency and client are nothing new, the increased emphasis on procurement-driven cost-cuts in the wake of the 2008 financial crash has reignited the rebate debate. The concerns from advertisers revolve around the possibility that agencies are making money for their own businesses on the back of the ad spend they receive.

It’s a practice all the agency holding groups have distanced their businesses from, though last year former Mediacom chief executive Jon Mandel said the practice of undisclosed rebates to media agencies are far more widespread in the US. The fallout from the claim peaked in October when the US Association of National Advertisers announced it had begun a wide-ranging investigation into the media-buying industry.

Join us, it's free.

Become a member to get access to:

  • Exclusive Content
  • Daily and specialised newsletters
  • Research and analysis

Join us, it’s free.

Want to read this article and others just like it? All you need to do is become a member of The Drum. Basic membership is quick, free and you will be able to receive daily news updates.