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Agencies are up for review

News, 30 September 2016

NEW YORK: The coming year is likely to be a time of upheaval for agencies as up to two-thirds of leading advertisers have indicated they are planning reviews across all disciplines.

A survey by Advertiser Perceptions, a business intelligence firm that measures what advertisers think about marketing and media, gathered more than 420 responses from marketers at 118 companies, a sample that included representatives from 90% of the top 100 US advertisers.

This revealed that 66% of advertisers are planning creative agency reviews over the next 12 months, while 65% intend to review search agencies, 64% media agencies and 61% digital agencies, Advertising Age reported.

That media agency reviews are in the pipeline might have been expected: they have been in the spotlight over the past year following the ANA's decision to carry out a probe into the media-buying process, leading to a report in June that stated: "non-transparent business practices were found to be pervasive" and which called into question the basic nature of the advertiser-agency relationship.

But it would have been harder to anticipate that a similar proportion of other types of agency face the same prospect.

"We were fairly surprised at the number," admitted Ken Pearl, co-founder and CEO of Advertiser Perceptions. "The data speaks for itself," he added.

They survey specifically asked advertisers about the issue of transparency and costs and found that 48% said their agencies were not open and transparent on costs.

Furthermore, 34% said they were losing trust in their agencies as a result.

Agencies will have some cards to play in any review, however, as the survey also revealed that almost half of advertisers admitted that they did not give their agencies meaningful key performance indicators (KPIs).

And 40% said they did not share sales data with agencies, limiting their ability to demonstrate effectiveness.

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Data sourced from Advertising Age; additional content by Warc staff