As a year of big budget pitches draws to a close the World Federation of Advertisers (WFA) has found that agencies produce better work when they’re retained.
Marketers are more likely to rate the work of their agencies as ‘excellent’ or ‘very good’ if they were retained compared to those who worked with agencies on a project basis, according to research from the trade body and The Observatory International.
The pair spoke to 42 senior client-side marketers representing 35 different brand owners in more than 14 categories that collectively spend just under $50bn on global advertising for the Effective Agency Management study.
Though an industry-wide discussion on in-housing and agile agency models has permeated 2019, 65% of global marketers told the WFA that they believed long-term agency relationships were important or essential to producing great work.
Just 12% said building long-lasting relationships was irrelevant, while 81% said they worked very collaboratively with their agencies. A further 45% described external partners a an “essential” part of their team.
The report also found that creative and media agencies typically enjoyed the longest relationships with clients. 36% of respondents said their media agency had worked with them for more than five years and 34% saying their creative agency had been a partner for a similar amount of time.
Marketers’ preference for long, fruitful relationships comes as a year in which some of the world’s biggest brands placed their media and ad accounts up for pitch, among them Disney, L’Oréal, Centrica and Audi – which put BBH on alert earlier this year with after 36 years on creative.
When it came to satisfaction, the WFA found the biggest gap to be among the respondents who ranked their agency’s performance as 'good' to be in the creative category where 86% worked with retained ad agencies and just 14% had project-based relationships.
A 'smarter approach' to agency management
However, advertisers need a smarter approach to agency management if they want to hold on to agencies, with a number of factors like budget, scope of work and opaque briefs all standing in the way of long-term partnerships.
Clients recognised that they could make improvements across these areas, implementing changes that would both improve outcomes and prolong relationships.
79% agreed that better briefing was essential. Tellingly, only 17% described themselves as “very good” at handing over briefs and 43% of marketers admitted they are merely adequate, poor or very poor in this regard.
Improved collaboration between marketing and procurement was also highlighted as being critical. With 83% of marketers and 73% of procurement saying they work together on fee negotiations. Making sure this works seamlessly means defining process and having absolute clarity of roles and responsibilities in relation to the various aspects of agency management, said the WFA.
“No one can guarantee a great agency-advertiser relationship, but marketers and their procurement partners can behave in a way that will make it more likely. The end result will be longer, more effective relationships that will grow businesses and create more powerful brands,” said Stephan Loerke, chief executive at the WFA.
In the past 12 months, 65% of respondents said they had increased scope of work significantly or somewhat for content and social agencies. The figure for media and creative agencies was 40% and for PR agencies it was 35%.