Brand marketers are missing a big chance to build more effective relationships with partner agencies, according to new research from the World Federation of Advertisers (WFA).

Better comms are key, the new research shows, and current relationships are marred by poor processes, too few face-to-face meetings, a lack of attention on how clients can improve, and the dominance of “cost-only” KPIs, which mean that many agency performance evaluations are not as useful and effective as they should be.

Sixty senior global agency leaders with 36 different agencies were asked about the evaluation process and whether it added value. Those quizzed came from both network and independent agencies, representing a total global advertising spend of approximately $69 billion.

Evaluations are lacking

The study highlights the importance of client-agency performance evaluations as the best tool to build relationships and better outcomes. And the best evaluations offer honest feedback that allows agencies to deliver better results, and also enables clients to improve.

Agencies want more face-to-face meetings and open discussions about improvements that can be made once evaluations have been carried out. Many clients say they provide feedback but the reality is that 7% of agencies receive a phone call, 5% are contacted by email and 14% find the results via an evaluation tool; a further 2% hear nothing at all.

Many agencies say they are not comfortable in giving honest feedback, with 43% saying this discomfort was the biggest obstacle to effective evaluation, and 38% added that they did not believe clients would change anyway as a result of such feedback.

Respondents also said they have too few opportunities to offer feedback. While 70% of advertisers give feedback on their agencies at least once a year, only 40% of agencies are given the same chance. And 29% of respondents said their clients didn’t ask for any feedback.

New KPIs are needed

Agencies said they want to see different KPIs, rather than relying on cost-only ones, or those the agency has no control over, like share price, or subjective ones, like “enthusiasm”.

Many respondents said they would like to see new KPIs introduced such as proactivity and speed, efficiency, contribution to business strategy and capacity to add value and enrich the brief. These are preferred mainly because they are fully under the control of agencies, but also because economic uncertainty, underlined by the impact of the coronavirus pandemic, can mean it is impossible for agencies to impact on delivery.

Agencies want clients to more readily recognise positive work rather than take it for granted – and they’d like to see it incentivised. Financial bonuses may be difficult currently, respondents acknowledged, but other incentives, like investments in training and development, and recognition across the company, would be welcome.

Many agencies did not like the idea of evaluation being linked to performance-by-results payments, and the research indicates this should be kept as only a small percentage of total remuneration – 71% of respondents think it should be below 15% of total remuneration, and a quarter thought it should be under 5%.

Sourced from WFA