Agencies struggle with digital in APAC

26 October 2009

SINGAPORE: A majority of marketers and advertising industry professionals in Asia Pacific currently question the digital credentials of creative and media agencies in the region, according to a new study by R3:GC

The company surveyed 100 of the most senior regional marketers in Asia Pacific, working in 19 different industries in all.

More specifically, they analysed 265 "face-to-face relationships" between clients and a total of 151 creative agencies and 114 media shops.

The typical participant had a remit in at least three different nations, with China, Singapore, India and Australia among the markets with the highest levels of penetration.

R3:GC found that the average share of turnover devoted by contributors to marketing reached 3.9% overall, with just under half the panel directing less than 2% of revenues to this activity, while one in ten had an advertising-sales ratio of at least 1:10.

Two-thirds of respondents thought their creative agencies performed well in their role as communications partners, in building relationships, providing strong service and in working transparently.

A majority similarly regarded their ad agencies as being "proactive", while just under half felt they offered value for money, but only 33% saw them as possessing a sound knowledge of digital media.

Over 60% of advertisers said their media agencies delivered when it came to relationship-building, transparency and service, while a majority also considered them as being proactive and good communications partners.

Media planners and buyers were argued to be better value for money than their creative counterparts, but only a quarter of clients perceived them as having the required level of digital acumen.

Indeed, overall, 33% of client-side contributors agreed with the statement that "the people in my agency generally have a strong understanding of digital," with 60% adopting the opposite position.

Sally Warren, general manager, agency consulting, R3:GC, said "agencies often struggle with setting client expectations for what 'good value."

This means that clients "aren't necessarily able to define what is required to be satisfied with the digital offering," she added.
Even within creative agencies themselves, 69% of industry professionals admitted they needed to enhance their digital know-how, a figure that fell slightly, to 64%, for media agencies, and, more surprisingly, to 62% for digital specialists.

On the client-side, 33% of respondents suggested their in-house marketing team had got to grips with this channel, while 60% took the contrary stance.
More positively, only 22% of advertisers said the financial crisis had "made them cautious" about exploring new media and digital formats, with 70% saying they are "not cautious" about doing so.

Some 66% of agency professionals also predicted there will be a shift away from traditional media, as digital and interactive platforms increasingly take the lead role in campaigns.

Data sourced from R3:GC; additional content by Warc staff