Agencies are more prepared to tell it like it is

Two-thirds (68%) of agencies are comfortable telling their clients – at least most of the time – what needs changing at their end, up from less than half (45%) two years ago, according to new research* from the World Federation of Advertisers (WFA).

Why it matters

Many things in the sometimes prickly relationship between client and agency can be smoothed over but it’s the client who pays the bills (or who usually pays the bills – Keurig Dr Pepper is requiring agencies pitching for its business to agree to extraordinary 360-day payment terms). Ultimately this is about money. 

Less than half of agencies think their compensation should be linked to the results of their performance evaluation – and that’s because there’s often a lack of alignment on KPIs.

Advertisers cite a lack of “measurable or objective” KPIs as their top concern; agencies, meanwhile, indicate the wrong things are often being measured. 

Takeaways

• Broken down by agency type, clients seem to be prioritizing media, full service and creative agencies for the most regular evaluation. In at least three out of four cases, media agencies receive compensation based on the results of evaluations, as KPIs tend to be more objective and measurable.
• Digital (35%) and production (44%) partners indicated they are most likely not to get any opportunity to receive structured feedback.
• Overall, almost one in three agencies surveyed said they still didn’t have any opportunity to evaluate their clients, with a further quarter having to do it in an unstructured way. 
• 13% of agencies agree that “no matter the feedback, client is king and won’t change” – that's a significant drop from 38% in 2020 – indicating rising agency satisfaction and improved client processes. 
  
• 53% of advertiser respondents say they now evaluate the collaboration between agencies.

Key quote

“Advertisers need to work harder to become the client of choice by actively nurturing agency relationships. Doing this means starting ‘at home’ and looking at their own performance before blaming their partners” – Laura Forcetti, Director of Global Marketing Sourcing Services at the WFA.

* The Client-Agency Performance Evaluations 2022 report is based on more than 90 respondents from 82 multinational organisations (49 clients and 33 agencies), with advertiser respondents responsible for more than $69bn in global ad spend. Learn more from a WFA webinar in January. 

Sourced from WFA, AdWeek