AGENCIES SPEAK OUT ON CLIENTS: Ad shops reveal where they think their clients are falling short in building a good relationship
There's nothing an agency hates more than a new marketing director wanting to make their mark by calling an agency review. With marketing directors staying in their jobs, on average, for just 12 to 14 months, this is an almost constant threat. With only 32% of agencies saying they had been with their lead client for more than six years, this hire-and-fire culture is clearly prevalent.
"What we see here is 70% of agencies saying their client takes a short-term view of the brand. That's very damaging, says IPA's Pringle. "We have to challenge this response of newly arriving clients calling agency reviews. Too often, agencies suspect that clients' motives for changing agencies are to make themselves look good, and are not in the interests of the brand."
Speaking from the client's perspective, ISBA's Morrison offers a different view: "If clients feel like they only have 12 months in a job, it's not surprising they want to work with people they know. Also, agencies like to think that rapid client turnover is the main reason they lose accounts. There are often deeper issues involved."
Yet the situation may be improving. A 1999 Marketing survey revealed that 90% of agencies thought clients moved too quickly and the same amount blamed that for reviews being called.
On the issue of dealing with too junior client staff, 53% of agencies said it was a problem. Pringle recognises the frustration agencies feel at dealing with junior staff. "Sadly, it reflects how agencies and key investment decisions on valuable brands are being allowed to drift down the food chain," he says.
WHAT SINGLE THING DO YOU THINK WOULD IMPROVE YOUR RELATIONSHIP WITH YOUR HIGHEST-SPENDING CLIENT?
Cilla Snowball chief executive, Abbott Mead Vickers BBDO
Good client relationships have to be earned - agencies don't get them by right.
With any client, big or small, the agency needs relationships of influence at all levels within the client organisation. These have to be nurtured from both sides and not taken for granted. Without this close partnership, it's hard to ensure that the role for advertising, and wider communication, is properly managed.
We're fortunate enough to have good relationships with, and an understanding of, all the key marketers we work with. We also have an indepth understanding of their business agenda, around which our advertising can be developed.
Rupert Howell joint chief executive, Chime Communications
To do great advertising, you need the early and active buy-in of the most senior people in the organisation. The best campaigns bear that out time and time again.
But too often agencies have to deal with junior people who have been thrown in at the deep end because the senior clients have too much to do. Clients don't invest in and train these people, so they're only qualified to say no, never yes. Getting through these layers of people saying no can be like pulling teeth.
There are some exceptions. Some firms, like Unilever, have short demarcation lines, allowing agencies to sit down with the people that matter and get things done.
Phil Teer, planning director, St Luke's
I'd like to say to clients that they should not leave all the thinking and imagination to us. Clients should get involved in the development process early on. Don't be afraid to express ideas and always share the responsibility for selling the work to all stakeholders. Don't be restless. Don't ask your agency to 'do a Levi's' - it has already been done. Don't demand matching luggage just because that's what everyone else has, because you'll end up with a brand that is just the same as everyone else's. Don't be the brand custodian and don't let your agency be one either - if your brand isn't moving forward it will inevitably be falling behind.
A survey by Marketing into client/agency relationships last week revealed the main areas where clients thought agencies could sharpen up their act. This week, it's the agencies' turn to dish out the report cards, telling us what they think of their paymasters.
Sixty leading ad agencies took part in the survey, 32% of which have billings of more than £100m. Conducted by Relationships Audits & Management, on behalf of Marketing, the Incorporated Society of British Advertisers (ISBA) and the Institute of Practitioners in Advertising (IPA), the survey asked agencies to answer a series of questions about their leading client.
These are big advertisers, with 45% of the replies coming from agencies whose clients spend more than £10m per year. As was the case with last week's report on clients' opinions on agencies, the results reveal a surprisingly positive overall assessment of clients' treatment of their agencies - 89% rating their biggest clients as 'excellent', 'very good' or 'good in most areas'.
But before anyone gets complacent, the truth emerges when more specific areas of the client/agency relationship are put under the microscope. Like many marriages, there are plenty of gripes boiling away beneath the surface.
Thorny issues such as clients moving on too quickly to cement lasting relationships, agencies not having sufficient access to senior staff, poor briefing and unclear leadership are among agencies' most common complaints about clients.
In recent years, agencies have become critical of the standard of their clients. Rupert Howell, joint chief executive of Chime Communications and former IPA president, lambasted poor client training in his IPA inaugural speech in 1999. Now, he says cutbacks continue to undermine the quality of marketers in client organisations. "Marketing departments continue to be decimated, in numbers and resources," says Howell. "Budgets and people are constantly being cut. The clients aren't to blame - the firms undervalue marketing."
Against this background of adversity, Debbie Morrison, client services director at ISBA, is pleased with the results: "I'm happy to see agencies scoring their clients so highly. But it doesn't tell us what makes a really good client. In terms of establishing best practice, that's something we still need to learn."
Asked what single thing they'd do to improve their relationship with their lead client, 18% cited greater access to more senior personnel. Comments included: "We want more contact with decision-makers - those who can say yes, not just the power to say no, and "more feedback from senior managers so that we can put in proactive proposals against their requirements". One agency complained about not enough 'ear time' with his senior client: "He is too busy and there is too big an experience gap between him and his team."
Equally important - also accounting for 18% of responses - was agencies wanting more involvement in their clients' overall business objectives. Responses such as "more access to company strategy" and "greater involvement in the pre-creative stage were common, while one agency asked for "more time to talk with them about how marketing can contribute to achieving their business objectives."
Other issues raised by agencies included 6% calling for more risk-taking ("Why can't they be braver when it comes to media innovation?") and 7% asking for better housekeeping ("Why is advertising the only industry with a fixed-profit scale?")
Separately from the survey, in order to get some more specific feedback on client/agency relationships, we asked three senior agency executives, Cilla Snowball, chief executive at Abbott Mead Vickers BBDO, Rupert Howell, joint chief executive at Chime Communications, and Phil Teer, planning director at St Lukes, to give us their personal views (see below) on the single thing that they think would improve agency relationships with clients.
CLIENT COMMUNICATION
Communication is clearly a contentious issue, with agencies neither happy with the standard of leadership they receive from clients, nor their accessibility. On the first issue, Debbie Morrison, client services director at ISBA says the problem is rooted in clients being poor at briefing.
"With one-quarter of agencies saying their biggest client doesn't give them clear leadership, more training is obviously needed on briefing," she says. "It's a dire situation. Unless clients get the briefing stage right, things will inevitably go wrong further down the line."
The issue is connected to accessibility and the problem of junior staff as agencies often feel rudderless without regular contact with the senior client.
Unfortunately, marketing directors spend, on average, just 5% of their time dealing with advertising, so they are not able to give their agencies as much time as agencies think they deserve. "Too often agencies feel palmed off with junior people who are only empowered to say no," says Relationship Audits partner Carey Evans.
Agencies are also critical of clients' ability to provide constructive feedback, with 37% disagreeing or staying neutral on whether feedback processes are satisfactory. "This is all intertwined with a perceived lack of strong client leadership, says Evans. "Companies are obviously giving responsibility to marketers who haven't developed the right skills in giving clear feedback and direction to their agencies."
The survey reveals that 46% of clients operate a payment by results (PBR) system. Morrison is very pleased to see this, as previous ISBA research suggested a figure nearer 36%. "It's good to see, as this survey is among big agencies with high-profile clients. There's a strong movement toward PBR from the top."
CLIENT ATTITUDE
If the statement 'advertising and marketing is considered a high priority in my client's company' had asked if advertising alone were a high priority for clients, then the response may not have been so positive.
Agencies are all too aware that advertising is having to fight hard for a share of the clients' budget against other channels.
Having said that, 82% of clients in last week's article said their lead ad agency 'makes a significant contribution to the standing of my brand' and 72% said it had a positive impact on the bottom line. So, agencies are justified in believing that their clients rate the contribution of advertising and marketing highly.
The 86% who agree that the client is 'receptive to our suggestions and ideas outside our remit' is not a surprise.
One common reason for client-agency relationship breakdown is when the agency is accused of not being proactive.
Relationship Audits' Evans, whose role often involves mediating in struggling relationships, knows the problem well "Clients love it when their agency makes a suggestion and thinks outside the box. This figure reflects that enthusiasm."
There is more interesting feedback here, such as 51% of agencies saying that the marketing director of their lead client is on the board.
Hamish Pringle, director-general of the IPA, is surprised at the number of board-level marketers, saying previous IPA research has arrived at a lower figure. "There's a big difference between being on an operating company board and the main board of a plc. The number of marketers at that level is probably nearer 20%, he says.
KEY PERFORMANCE INDICATORS
Ask agencies for their key complaint about clients - especially in today's cash-strapped climate - and many will say they don't get paid enough. Agencies usually argue that they are undervalued and underpaid by clients - particularly compared with professional services companies. But 86% of agencies in our survey say that their lead account is 'rewarding and profitable'. Maybe things aren't so tight after all.
Relationship Audits' Evans says the response "seems to belie the impression that agencies aren't paid enough".
As for the lead account being stimulating, 77% in agreement and 21% neutral is a relatively muted response. This illustrates how the biggest and most profitable accounts are not always the most thrilling to work on. A huge name may look great on the client list - 90% say their lead account 'contributes significantly to the standing of the agency' - but the reality of looking after the business can be far from sexy.
Not surprisingly, creativity is an area where agencies and clients clash. In last week's article, clients criticised their agencies' creative skills. This week agencies turn the tables with the same complaint. Although 69% of agencies saying their client 'is committed to a high standard of creativity and innovation' (26% are neutral) sounds high, it is one of the least positive answers in the survey. "The figure suggests frustration among agencies that their clients are too focused on minimising risk and not going for big creative ideas, says Evans.
The IPA's Pringle highlights another reason why the biggest accounts may not always be the most creatively exciting or stimulating to work on: "An agency's biggest client has a lot of clout and may well have strong views as to how the business should be conducted. Often, the agency will do everything the client says rather than challenging the status quo."
JAMES CURTIS Marketing 04-04-2002
There's nothing an agency hates more than a new marketing director wanting to make their mark by calling an agency review. With marketing directors staying in their jobs, on average, for just 12 to 14 months, this is an almost constant threat. With only 32% of agencies saying they had been with their lead client for more than six years, this hire-and-fire culture is clearly prevalent.
"What we see here is 70% of agencies saying their client takes a short-term view of the brand. That's very damaging, says IPA's Pringle. "We have to challenge this response of newly arriving clients calling agency reviews. Too often, agencies suspect that clients' motives for changing agencies are to make themselves look good, and are not in the interests of the brand."
Speaking from the client's perspective, ISBA's Morrison offers a different view: "If clients feel like they only have 12 months in a job, it's not surprising they want to work with people they know. Also, agencies like to think that rapid client turnover is the main reason they lose accounts. There are often deeper issues involved."
Yet the situation may be improving. A 1999 Marketing survey revealed that 90% of agencies thought clients moved too quickly and the same amount blamed that for reviews being called.
On the issue of dealing with too junior client staff, 53% of agencies said it was a problem. Pringle recognises the frustration agencies feel at dealing with junior staff. "Sadly, it reflects how agencies and key investment decisions on valuable brands are being allowed to drift down the food chain," he says.
WHAT SINGLE THING DO YOU THINK WOULD IMPROVE YOUR RELATIONSHIP WITH YOUR HIGHEST-SPENDING CLIENT?
Cilla Snowball chief executive, Abbott Mead Vickers BBDO
Good client relationships have to be earned - agencies don't get them by right.
With any client, big or small, the agency needs relationships of influence at all levels within the client organisation. These have to be nurtured from both sides and not taken for granted. Without this close partnership, it's hard to ensure that the role for advertising, and wider communication, is properly managed.
We're fortunate enough to have good relationships with, and an understanding of, all the key marketers we work with. We also have an indepth understanding of their business agenda, around which our advertising can be developed.
Rupert Howell joint chief executive, Chime Communications
To do great advertising, you need the early and active buy-in of the most senior people in the organisation. The best campaigns bear that out time and time again.
But too often agencies have to deal with junior people who have been thrown in at the deep end because the senior clients have too much to do. Clients don't invest in and train these people, so they're only qualified to say no, never yes. Getting through these layers of people saying no can be like pulling teeth.
There are some exceptions. Some firms, like Unilever, have short demarcation lines, allowing agencies to sit down with the people that matter and get things done.
Phil Teer, planning director, St Luke's
I'd like to say to clients that they should not leave all the thinking and imagination to us. Clients should get involved in the development process early on. Don't be afraid to express ideas and always share the responsibility for selling the work to all stakeholders. Don't be restless. Don't ask your agency to 'do a Levi's' - it has already been done. Don't demand matching luggage just because that's what everyone else has, because you'll end up with a brand that is just the same as everyone else's. Don't be the brand custodian and don't let your agency be one either - if your brand isn't moving forward it will inevitably be falling behind.
A survey by Marketing into client/agency relationships last week revealed the main areas where clients thought agencies could sharpen up their act. This week, it's the agencies' turn to dish out the report cards, telling us what they think of their paymasters.
Sixty leading ad agencies took part in the survey, 32% of which have billings of more than £100m. Conducted by Relationships Audits & Management, on behalf of Marketing, the Incorporated Society of British Advertisers (ISBA) and the Institute of Practitioners in Advertising (IPA), the survey asked agencies to answer a series of questions about their leading client.
These are big advertisers, with 45% of the replies coming from agencies whose clients spend more than £10m per year. As was the case with last week's report on clients' opinions on agencies, the results reveal a surprisingly positive overall assessment of clients' treatment of their agencies - 89% rating their biggest clients as 'excellent', 'very good' or 'good in most areas'.
But before anyone gets complacent, the truth emerges when more specific areas of the client/agency relationship are put under the microscope. Like many marriages, there are plenty of gripes boiling away beneath the surface.
Thorny issues such as clients moving on too quickly to cement lasting relationships, agencies not having sufficient access to senior staff, poor briefing and unclear leadership are among agencies' most common complaints about clients.
In recent years, agencies have become critical of the standard of their clients. Rupert Howell, joint chief executive of Chime Communications and former IPA president, lambasted poor client training in his IPA inaugural speech in 1999. Now, he says cutbacks continue to undermine the quality of marketers in client organisations. "Marketing departments continue to be decimated, in numbers and resources," says Howell. "Budgets and people are constantly being cut. The clients aren't to blame - the firms undervalue marketing."
Against this background of adversity, Debbie Morrison, client services director at ISBA, is pleased with the results: "I'm happy to see agencies scoring their clients so highly. But it doesn't tell us what makes a really good client. In terms of establishing best practice, that's something we still need to learn."
Asked what single thing they'd do to improve their relationship with their lead client, 18% cited greater access to more senior personnel. Comments included: "We want more contact with decision-makers - those who can say yes, not just the power to say no, and "more feedback from senior managers so that we can put in proactive proposals against their requirements". One agency complained about not enough 'ear time' with his senior client: "He is too busy and there is too big an experience gap between him and his team."
Equally important - also accounting for 18% of responses - was agencies wanting more involvement in their clients' overall business objectives. Responses such as "more access to company strategy" and "greater involvement in the pre-creative stage were common, while one agency asked for "more time to talk with them about how marketing can contribute to achieving their business objectives."
Other issues raised by agencies included 6% calling for more risk-taking ("Why can't they be braver when it comes to media innovation?") and 7% asking for better housekeeping ("Why is advertising the only industry with a fixed-profit scale?")
Separately from the survey, in order to get some more specific feedback on client/agency relationships, we asked three senior agency executives, Cilla Snowball, chief executive at Abbott Mead Vickers BBDO, Rupert Howell, joint chief executive at Chime Communications, and Phil Teer, planning director at St Lukes, to give us their personal views (see below) on the single thing that they think would improve agency relationships with clients.
CLIENT COMMUNICATION
Communication is clearly a contentious issue, with agencies neither happy with the standard of leadership they receive from clients, nor their accessibility. On the first issue, Debbie Morrison, client services director at ISBA says the problem is rooted in clients being poor at briefing.
"With one-quarter of agencies saying their biggest client doesn't give them clear leadership, more training is obviously needed on briefing," she says. "It's a dire situation. Unless clients get the briefing stage right, things will inevitably go wrong further down the line."
The issue is connected to accessibility and the problem of junior staff as agencies often feel rudderless without regular contact with the senior client.
Unfortunately, marketing directors spend, on average, just 5% of their time dealing with advertising, so they are not able to give their agencies as much time as agencies think they deserve. "Too often agencies feel palmed off with junior people who are only empowered to say no," says Relationship Audits partner Carey Evans.
Agencies are also critical of clients' ability to provide constructive feedback, with 37% disagreeing or staying neutral on whether feedback processes are satisfactory. "This is all intertwined with a perceived lack of strong client leadership, says Evans. "Companies are obviously giving responsibility to marketers who haven't developed the right skills in giving clear feedback and direction to their agencies."
The survey reveals that 46% of clients operate a payment by results (PBR) system. Morrison is very pleased to see this, as previous ISBA research suggested a figure nearer 36%. "It's good to see, as this survey is among big agencies with high-profile clients. There's a strong movement toward PBR from the top."
CLIENT ATTITUDE
If the statement 'advertising and marketing is considered a high priority in my client's company' had asked if advertising alone were a high priority for clients, then the response may not have been so positive.
Agencies are all too aware that advertising is having to fight hard for a share of the clients' budget against other channels.
Having said that, 82% of clients in last week's article said their lead ad agency 'makes a significant contribution to the standing of my brand' and 72% said it had a positive impact on the bottom line. So, agencies are justified in believing that their clients rate the contribution of advertising and marketing highly.
The 86% who agree that the client is 'receptive to our suggestions and ideas outside our remit' is not a surprise.
One common reason for client-agency relationship breakdown is when the agency is accused of not being proactive.
Relationship Audits' Evans, whose role often involves mediating in struggling relationships, knows the problem well "Clients love it when their agency makes a suggestion and thinks outside the box. This figure reflects that enthusiasm."
There is more interesting feedback here, such as 51% of agencies saying that the marketing director of their lead client is on the board.
Hamish Pringle, director-general of the IPA, is surprised at the number of board-level marketers, saying previous IPA research has arrived at a lower figure. "There's a big difference between being on an operating company board and the main board of a plc. The number of marketers at that level is probably nearer 20%, he says.
KEY PERFORMANCE INDICATORS
Ask agencies for their key complaint about clients - especially in today's cash-strapped climate - and many will say they don't get paid enough. Agencies usually argue that they are undervalued and underpaid by clients - particularly compared with professional services companies. But 86% of agencies in our survey say that their lead account is 'rewarding and profitable'. Maybe things aren't so tight after all.
Relationship Audits' Evans says the response "seems to belie the impression that agencies aren't paid enough".
As for the lead account being stimulating, 77% in agreement and 21% neutral is a relatively muted response. This illustrates how the biggest and most profitable accounts are not always the most thrilling to work on. A huge name may look great on the client list - 90% say their lead account 'contributes significantly to the standing of the agency' - but the reality of looking after the business can be far from sexy.
Not surprisingly, creativity is an area where agencies and clients clash. In last week's article, clients criticised their agencies' creative skills. This week agencies turn the tables with the same complaint. Although 69% of agencies saying their client 'is committed to a high standard of creativity and innovation' (26% are neutral) sounds high, it is one of the least positive answers in the survey. "The figure suggests frustration among agencies that their clients are too focused on minimising risk and not going for big creative ideas, says Evans.
The IPA's Pringle highlights another reason why the biggest accounts may not always be the most creatively exciting or stimulating to work on: "An agency's biggest client has a lot of clout and may well have strong views as to how the business should be conducted. Often, the agency will do everything the client says rather than challenging the status quo."
JAMES CURTIS Marketing 04-04-2002
