In 2017, but advertisers and marketers remain at odds over the changing nature of their relationship, according to results from a New Year Outlook survey conducted by development firm RSW/US.
Asked about “troubling trends” in the industry, for instance, answers coming from the two disciplines were almost diametrically opposed.
Marketers complained that agencies “haven’t figured out how to be project-based,” pointed to a perceived “lack of technical and data-savvy teams on our accounts,” and claimed that too many legacy shops have yet to complete the cultural shift from old media to new.
Agency executives, meanwhile, said marketers often turn to their own in-house departments for work they feel their teams could do better. They believe that such partners are unwilling to commit to quality work amid a “declining respect for agencies” and advertising in general.
“I haven’t seen much change in this in the past couple of years, and it needs to be addressed,” said RSW/US founder and president Mark Sneider of the survey’s results. “The fault rests on both sides, and both sides need to take ownership and take action. Agencies need to be bringing ideas and keep relationships fresh. Marketers need to look at agency partners as business partners.”
One point of contention that seems to be on the rise is marketers’ increasing preference for project-based assignments over agency-of-record relationships. Thirty-five percent of agencies surveyed said a majority of their assignments are now project-based, while only 20 percent gave the same answer last year. That number was even higher—37 percent—for marketers.
Sneider argued that agencies need to rethink their expectations accordingly. “Agencies have to adjust how they look at opportunities and see it in terms of the long-term value of a relationship, even if it is just a project assignment,” he said, adding, “There are fewer ready-made AOR opportunities out there.”
On a more positive note, agencies’ concerns over clients moving their work in-house may be slightly overblown. Forty-six percent of agencies expect to see a “moderate” to “very large” amount of work disappear this year, up from 32 percent in 2016. But a larger majority of marketers said such moves represent 20 percent or less of the work normally assigned to agency partners.
The survey’s most surprising finding, according to Sneider, was the speed at which marketers are investing in data-analytics software and hiring chief information o fficers to manage it. Thirty-seven percent of those surveyed reported employing a CIO, though they largely agreed with ad agencies in stating that those hires and their relationships with CMOs were so far only “moderately effective.”
“Agencies need to get on board with the data and analytics train,” Sneider said, citing an unnamed traditional agency that recently won an assignment on the basis of its data and analytics offerings.
Politics also played a role in determining survey participants’ outlooks for 2017. While marketers are largely ambivalent about the prospects of the incoming Trump administration, 42 percent of advertisers said they thought it would have an unspecified positive impact on the industry.
Sneider did not find this surprising.
“As crazy as the man seems to be, he hasn’t given businesses any reason to take pause and think he’d do something that’s going to adversely affect a business and its ability to compete,” he said.
Other key findings in the survey include the following:
- Eighty-seven percent of marketers said they will invest “somewhat” or “heavily” in business, down from 89 percent last year.
- Eighty-nine percent of agencies think their clients will invest “somewhat” or “heavily” in business, down from 93 percent last year.
- Sixty-seven percent of marketers said they were likely to invest either “somewhat” or “heavily” in advertising and marketing. The 2016 total was 62 percent.
- Yet only 48 percent of advertisers said that their clients were likely to invest “somewhat” or “heavily” in advertising and marketing, down only 1 percent from 2016.
- Sixty-five percent of advertisers anticipate their clients’ spending on mobile marketing marketing, and 62 percent anticipate clients’ spending on digital marketing being “somewhat higher” than in 2016. Twenty-four percent expect digital marketing spends to be significantly higher, and 14 percent expect the same trend to apply to mobile spends.
- On this point, marketers agree: 66 percent anticipate spending to be “somewhat higher than in 2016” on digital marketing, and 42 percent expect a mobile-spending boost. Eighteen percent think both totals will be “significantly higher than 2016.
By Erik Oster