About a year ago, Ken Kaess, CEO of DDB, in a now-famous critique, urged the advertising industry to address the burning issues of what advertisers really want and where agencies are failing to meet their clients' expectations.
Ballester, the leading consulting firm specialized in the advertising industry, can provide some helpful insights. In 2002, Ballester, originally a 30-year-old European firm, started operating in the US. We have just completed our first US Advertising Agency Survey. About 300 top US advertisers talked to us about their advertising challenges, expectations, and have commented on the performance of their advertising agencies. The interviews were conducted between December 2002-April 2003, senior management (70%), middle-management (30%). As Ken Kaess had suggested, leading US advertising agencies finally took the matter into their hands and commissioned this survey.
The following summarizes the Ballester survey findings:
Marketing Challenges for Advertisers
Advertisers describe as their top marketing challenges as: "breaking through the clutter", building awareness for their brands in a crowded and evolving media and consumer landscape and being effective in terms of sales increase. Furthermore, they ask for help in specific areas:
- Understand the relative strengths of all different communication opportunities and comparatively understand all options
- Determine which technique/medium of communication to use for which brands.
- Getting action on all consumer insights
- Identify correct audience and communicate the most appropriate message through the best channel
- Creating advertising that is more effective, more compelling, in a multi-media world with a more fractured target audience
Advertising Industry Performance: mixed report
Advertisers' assessment of the advertising industry is mixed. 61% feel the ad industry meets their expectations—and delivers on its promises—while 39% feel it is failing to do so. The latter criticize the advertising industry for seeking creative glory awards—and remaining centered on traditional television. They complain the industry does not focus enough on effectiveness, i.e. sales results, does not manage to target consumers well and has not yet mastered new media.
The 61% who feel the industry is performing adequately have made the following comments:
- "Agencies have been good at developing true partnerships and redefining themselves as brand communication partner".
- "We deal with experienced people. It feels like we are maximizing our dollars".
The 39% who feel the industry is performing inadequately have made the following comments:
- "The industry is weak in research and accountability".
- "There is no transparency on how money is spent".
- "The industry seems more interested in protecting revenue share of conventional ads (TV) that looking into other communication vehicles".
- "No analytical assessment of merit of the different advertising options".
- "Agencies put too much focus on clever advertising and their own name. They make TV commercials that are beautiful, clever and funny but that does little for the brand".
- "No agency acts and reacts fast enough. Agencies presume advertising is the best solution and start from there. It is not true".
- "Agencies try to become full service agencies but are not as good or affordable as a specialist would be".
- "They better figure out how advertising can be effective in the future".
How do advertisers evaluate their ad agencies?
Advertisers were asked to pick the 5 most important criteria, out of a comprehensive list of 21, used to evaluate their agencies. Sure enough, these criteria are the same when it comes to selecting a new agency:
- "Produces creative campaigns that sell", this criterion was picked by 61% of the interviewees.
- "Produces effective campaigns", 46%
- "Understands client's issues and challenges", 44%
- "Is good at leveraging consumer insights", 38%
- "Is a competent advisor in business & marketing strategy", 33%
- "Acts and reacts fast", 32%
- "Gives good value for money", 31%
How do advertisers define a good working relationship with their agency?
It is a partnership for the best and the worst, team-work, a joint ownership. It is not a client/vendor relationship. Advertisers and their ad agencies should be working together to find solutions and solve problems. Some interesting comments describing a good relationship follow:
- "Spend our money like it was yours"
- "Understand our business, our challenges, our brands, our objectives and the whole picture"
- "Be open to discussion and new ways of thinking"
- "Be respectful and a good listener"
- "Be honest, collaborative and have a good attitude"
- "Be reactive and also proactive"
- "Have a "can do" attitude (being able to leveraging resources to accomplish things)"
- "Offer objectivity in recommendations: focus on what is best for us"
- "Be passionate for business and committed to excellence"
Only 8% of clients declared to be unsatisfied with their current agency.
One might conclude on an optimistic note: agencies have learned to understand their clients' needs and expectations and are responding adequately. Or could it be that agencies view themselves bound in a "marriage" with their agency, which is hard to exit and therefore worth putting efforts into. Not many advertisers can afford to change agencies in a down economy. It is traumatic. It does slow down the business. It is a costly process. It is a new team to train and to get familiar with.
To ensure good relationships and lower the risk of your clients dumping you at the first occasion, you would be well advised to be a value-added partner to your clients. Make sure they are truly satisfied, that their expectations are met and their frustrations handled and reacted upon. Most importantly, make sure you help them ring their cash register. This is what it is all about.