ANA Survey: Fewer Marketers Plan to Cut Agency Pay in 2013

Good News for Shops, Since 56% Said They'd Lower Fees Four Years Ago

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While the majority of marketers -- 82% -- are pushing for cost savings and streamlining marketing budgets, they aren't doing it at the expense of agencies.

Bob Liodice
Bob Liodice

According to a survey by the Association of National Advertisers, only 15% plan to decrease agency compensation this year, though marketers are still asking shops to lower costs. That's far lower than in was back in 2009, when more than half of the marketers surveyed, 56%, said they planned to cut their agency's fees.

One explanation: Marketers are realizing they can't slash much more. According to the ANA's report, "It's possible that many marketers have reduced agency compensation as low as possible and now instead are challenging their agencies to reduce costs internally or identify cost reductions ... which could indirectly lower agency compensation."

Marketers did identify other ways they'll trim costs, including reducing travel, delaying new projects -- and most surprisingly -- slashing internal-agency sources. Fifty-five percent said they were going to decrease their in-house agency's expenses, which suggests many companies are placing priority on outside-agency relationships.

The study, conducted in January, was themed around marketing post-recession, and is the ANA's seventh recession-related survey. Respondents included marketing execs from 120 ANA member companies, including: Allstate, Eli Lilly, Intercontinental Hotels Group, LG, Liberty Mutual, State Farm, Travelers Insurance, Whirlpool and 3M.

Fifty-six percent of respondents said they expect their budgets to stay the same over the next six months. In a statement, ANA head Bob Liodice referred to it as a "new normal" for marketers to operate in an environment that challenges brands to grow by improving marketing effectiveness and efficiency rather than slashing budgets.

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