Agencies must adapt

05 August 2011

NEW YORK: Agencies will retain a central role in advertising and marketing going forward, but may need to pursue a more integrated approach to best serve brand owners, a study has suggested.

The Horn Group, the digital agency, and Kelton Research, the insights provider, polled 265 marketing directors and CMOs in the US who had occupied their posts for at least five years.

Overall, 77% of participants agreed agencies must be "partners" not "vendors", and 70% argued they had already achieved such a relationship with their existing roster of shops.

Looking ahead, 72% of executives stated agencies would become increasingly valuable, but 70% expected to work with fewer shops in five years time.

Factors supporting greater integration include a shortage of time to manage numerous agencies on 49%, lower budgets with 48%, a desire to build better relationships on 26% and less room to experiment on 21%.

A 68% share of contributors preferred working with smaller agencies, and 63% liked to hire specialists which are then able to leverage the expertise of third parties, instead of tapping a "one stop shop".

Exactly 60% of the panel had also previously found it difficult to find a full service agency capable of meeting all their needs.

Another 58% of interviewees wanted their various agencies to take a more integrated approach than at present, although 55% admitted obstacles here often resulted from a lack of in-house coordination.

Some 88% of the sample concurred that agencies typically collaborated most effectively on individual projects, and 62% reported wider efforts to supply integrated service had been "poor".

Elsewhere, 68% of participants believed their firm was "behind the curse" in terms of adopting digital media, rising to 71% when discussing social media.

Among the attractive qualities agencies can possess were excelling at strategic execution on 34%, while cost only logged 15% and reputation registered 5%.

Regarding innovation, 44% of respondents revealed marketing teams generally led in this area, standing at 26% for customers, 22% for executives in other business units, and 3% concerning agencies.

Data sourced from the Horn Group; additional content by Warc staff