A new survey released last month quantified what many people in the b-to-b marketing community have experienced firsthand: The agency-client relationship is in a bad way.
The survey was commissioned by Citigate, a New York-based marketing communications firm, and performed by GfK Custom Research. It queried 209 C-level executives, most of them at b-to-b companies, in February.
Only 11% of the respondents said they planned to retain their current advertising, public relations and marketing services agencies without a review.
At the same time, 47% of respondents said they definitely planned a review, and another 42% said they were likely to stage a review in the next three to six months.
"I would not have anticipated findings that are that ugly," said Tom Stein, president of Stein Rogan + Partners, a New York-based agency. "My feeling is, though, that the client-agency relationship is in a very difficult place."
The best face put on these numbers is that they indicate that b-to-b marketers, after three years of constricted budgets, are planning to spend again. "In some ways thatâs kind of good news," said John Quartararo, Citigateâs managing director. "Most companies will not change an agency if thereâs no business and everything is slowed down in terms of their marketing."
Can this marriage be saved?
Beneath that gloss, however, many industry insiders agreed that the numbers revealed disturbing cracks in the agency-client relationship and donât bode well for the traditional
b-to-b marketing communications agency. A key number was the 42% of survey respondents who said their agencies "failed to demonstrate an understanding of their business."
Stein didnât dispute that assessment and said that agencies must work harder to understand their clientsâ business. "It ainât easy," he said. "We arenât selling toilet paper here. The value of the product isnât whether itâs soft or cheap."
Stein credited a recent new account victory, the win of Video Monitoring Services, a firm that tracks local ad spending, to the research that his agency did on the clientâs business.
Rick Segal, CEO of Cincinnati-based marketing communications firm HSR Business-to-Business, agreed that many agencies donât do enough legwork in attempting to understand their clientsâ businesses. "You cannot try to approach this at a facile level or at a veneer level," he said. "To get it right, you have to dig deep into their product and their channels and their customers."
Segal, however, didnât concede that the fault lay entirely on the agency side. "Over the last 10 to 15 years, C-suite executives in general have become less and less engaged with their agencies, and that relationship is delegated at best to an executive at the next level and frequently as many as two or three or four tiers removed from the C-suite. Itâs no wonder theyâre disenchanted, because theyâre disconnected."
Segal recalled that when HSR first won the GE Aircraft Engine account in 1994, Eugene Murphy, CEO of the General Electric Co. division at that time, took the time to sit down and discuss with the agency how valuable the GE Aircraft Engine brand was. "We would go to the ends of the earth for that guy," Segal said.
The irony that accompanies such a trend is that most observers believe marketing has become important in the past decade or two at b-to-b companies. "I have seen most business-to-business clients evolve slowly but surely from sales-driven organizations to marketing-driven organizations," Quartararo said.
The combination of marketingâs increased importance and the present focus on ROI have increased the pressure on agencies to deliver measurable resultsâand do it fast. "In most cases, everyone is clamoring for results now," Stein said.