SHANGHAI: Many advertisers are taking a nuanced approach when choosing which agencies they work with in China, but overall levels of satisfaction in this area remain low.
R3:GC, a joint venture between R3 and Grupo Consultores, the consultancies, surveyed some 234 senior marketers in the country, with their responses relating to 754 agency relationships.
Its panel included representatives from global corporations like Danone, General Motors, Nokia and Unilever, and local companies such as China Mobile, Haitong, Lenovo and QQ.
Overall, these advertisers were found to employ an average of 3.2 agencies to cover their creative, media and marketing activities.
"Within this, you're hard pressed to find a multinational without at least one local agency on their roster in some capacity," Sally Warren, general manager of R3:GC, said.
More specifically, 67% of the sample as a whole had agreed a contract with one or more local media agencies, with international firms often supplementing their regional or global rosters in this way.
By contrast, no contributing Chinese company had hired a media shop as part of a global assignment, although 11.8% did have regional plans in place.
When choosing between media specialists, negotiating "good rates" was the top priority for brand owners, followed by account service, communications planning and "value for money".
Research tools, transparent systems, creative use of media and digital media capabilities were all ranked more highly than whether the organisation concerned represented an international network.
In terms of remuneration, 44.3% of participants had established a commission model, while 42.3% operated fee-based structures, and 18.4% were making project-by-project payments.
Within this, 47.4% of foreign clients favoured using commission, while 18.1% preferred fees, and 34.5% had instituted a mixed approach.
By contrast, 47.1% of Chinese advertisers had formulated a mixed method, with 41.2% tending towards commission, and 11.8% opting for fees.
Incentive-based payments have also become more popular, and are now utilised by 34% of marketers in the country, up by 48% year-on-year.
When awarding creative duties, 86.2% of Chinese companies had tapped domestic agencies, a figure that fell to 66.7% for their multinational counterparts.
Creativity and service were the main qualities which attracted brands to specific providers in this field, but 42% also revealed that they generally only engaged these shops on a project basis.
The average duration of the relationship between a client and a creative agency in China is 2.7 years, which compares with a total of around six years in the US and Europe.
Pitching is now used by 85% of marketers when reviewing their creative briefs, with 38% of firms putting their account up for consideration at least once a year, and sometimes more often.
On average, there are 3.7 agencies invited to a creative pitch, rising to 4.5 agencies for Chinese advertisers.
Typically, clients worked with their media agencies for a period of 3.2 years, but 62% plan to pitch this area of their business more frequently in the future.
However, only 52% of participants were "happy with their agency", down from 74% in a similar study two years ago, while a third were "indifferent" towards one or both of their creative or media agencies.
Data sourced from R3:GC; additional content by Warc staff