A study of senior client-side marketers in the UK has revealed key insights about how brands’ decision-makers – including companies like Unilever, The Economist, and Diageo – see the agency landscape, their own relationships, and why an agency's legacy and expertise is still capable of outgunning consultancies.
This is according to research company SCOPEN’s Agency Scope study for the UK, the third that the firm has performed in the territory. The report is part of a quantitative tracking study of 12 advertising markets, out of which it has revealed the 2019 UK numbers. SCOPEN spoke to WARC last week to discuss the findings.
SCOPEN undertook in-depth, 60-minute interviews with 81 senior marketing professionals, including 57 Chief Marketing Officers, and 56 agency professionals. The overwhelming majority (72.8%) were the ultimate spending decision-makers. The fieldwork began in August 2018, and concluded in January 2019.
Crucially, the research shows the generally high-level of UK agency performance in the creative space, something that is becoming something of a “commodity” says Cesar Vacchiano, president and CEO of SCOPEN. People and talent, however, are a crucial part of agencies’ draw for clients, still.
“It’s interesting to see how [clients] are talking more about innovation related with business transformation, and digital transformation, which is a different territory from creativity, much more difficult, of course, to find agencies in that space.”
Similarly, having lots of data is not impressive to clients – top-class strategic planning, meanwhile, is increasingly important. “They want to have planners working for them that identify insights to tell them what is the relevant data”, he says. But fundamentally, he believes, traditional agencies’ advantage over newer competitors is the talent and the ability to attract and retain a particular kind of person. This, he argues, is one area in which SCOPEN’s research suggests consultancies won’t soon be able to compete.
In looking at the business effects of agency relationships, the study uncovers some important data surrounding agencies’ contribution to business growth. In the UK, compared to 2015 – the previous edition – clients believed that their agency partners were helping them to grow by 17%; in 2019, there is a slight drop to 16.2%.
However, there is some key growth: over half of respondents (55.8% - up from 42.4% in 2012) say that their agencies contribute to between 11%-50% of business growth. Clients saying their agencies helped them to grow more than 50% have also increased slightly from 5% to 5.3%.
Contrast the UK’s hyper-developed advertising market with Brazil’s, where client-side marketers attribute 57.7% of their growth to agency partners.
But the UK is a market in which there are many more players than just the creative and media agencies contributing to business growth. Marketers were asked a spontaneous question about other partners. Leading the field are tech companies, which clients credit with driving an average business growth of 25.5%. Further to that, UK marketers credit Google and Facebook with 8.2% and 8.1% of growth respectively.
Data company Kantar is reported to contribute an average of 5% growth to clients’ business, reflecting an ongoing appetite for premium knowledge and data. Also contributing an average of 5%: the consultancy McKinsey & Company, and the platform Salesforce.
While consultancies are seen by marketers to be contributing to growth, those mentioned are only contributing to single-figure increases, far less than the traditional agency.
Elsewhere, despite the reported rise of Amazon becoming increasingly important on a number of fronts – e-commerce to search advertising, senior UK marketers don’t yet see its contribution to business growth, when “it is a key player in other countries”.
There are some interesting omissions here, notes Vacchiano. First, key national retailers like Tesco were not mentioned, unlike other countries – Vacchiano is sure that for many of the surveyed brands, physical availability across a retail network is crucial to the business. Second, he was “very surprised” that national TV channels as advertising partners do not feature – this could reflect several things: the maturity of the media agency space could well mean that marketers view channels as vendors but not necessarily partners.
In the UK, Vacchiano observes, “CMOs are still very much thinking of agencies. What this reflects is that they are not thinking enough about other companies […] how other companies will be helping them to transform their business.”
Relationships are getting shorter in the UK, though they are still just over the global average of 4.7 years. In the previous 2015 study, the average agency relationship was 6.5 years. The 2019 results have seen a 30% drop to 4.8.
Satisfaction with agency relationships in the UK stands at 79.8%, just over two percentage points above the global average. Levels of “very satisfied clients” have increased by 23%.
The number of clients in the sample with an intention to change agency has dropped drastically from 17% to just 8.3%.
Who clients admire
The study looked into several agency rankings, based on creativity, performance, and – interestingly – what they saw as an “ideal agency”. The top three were all major agencies:
- AMV BBDO
In terms of performance, which SCOPEN measures as client satisfaction, smaller agencies have been able to compete, such as the privately-owned VCCP, which tops the list. In second place, BBH continues its run; in joint-third place are The Brooklyn Brothers and Proximity.
The top five most admired campaigns:
- John Lewis
- John Lewis
Sourced from SCOPEN; additional content by WARC staff