Warc Blog

Clients outgrow their agencies

18 April 2014
MIAMI: Agencies and clients frequently appear to be talking different languages, according to a new report that also reveals a major disconnect in their views on why their relationships come to an end.

The 2014 SoDA report, from the global society for digital marketing innovators, was based on a worldwide survey of 736 decision makers, evenly split between advertisers and digital agencies and representing an annual marketing spend of $25.4bn.

SoDA found that the number one reason for clients walking away was that they had outgrown their agency's ability to deliver against their needs (27%). Agencies, however, overwhelmingly pointed to new client management as the number one reason (39%).

Agency respondents ranked failure to deliver for clients' growing needs a distant fourth, a major discrepancy said SoDA. The specific service areas clients cited the most for termination was dissatisfaction with strategy (11%); again, few agencies (6%) viewed this as the root problem.

Despite that fact that more clients were bring their digital work in-house – 13% of the total – agencies generally thought advertisers lacked digital talent, with 50% or more highlighting gaps in paid, earned and owned-media strategy and execution as well as user experience and product innovation.

Chris Buettner, SoDA's executive director and managing editor of The SoDA Report, said the move in-house was not necessarily bad news for digital agencies. "The opportunity is in data, mobile and product innovation – areas of high demand," he said.

The report suggested that, while both sides agreed marketing creativity was most important, clients rated product and service innovation second, while agencies rated it fourth in importance. Agencies rated customer-centred marketing for clients third, while clients scored it fifth in terms of priority.

Over 60% of clients felt their digital agency was excellent or good at evaluating digital trends for practical use. But nearly one in three agency respondents (29%) did not offer any training on current or emerging trends and technologies, which the report described as a missed opportunity to increase revenue and for clients to capitalise on the changes.

For digital agencies to prosper, said Buettner, they would need to provide the "core value trinity" of creative marketing, innovation and expertise in emerging trends. That way, they could embed themselves in internal client teams while building stronger digital expertise across marketing and customer experience.

Data sourced from SoDA; additional content by Warc staff

 
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