The overall advertiser-agency relationship is starting to show strains because of the economy, according to an annual survey, but things aren’t as bad as might be expected considering the continuing squeeze on ad budgets and the growing number of shuttered agencies.
"It’s hard to do well even in the best of times," said Nancy Salz, president of New York-based Nancy Salz Consulting, which released the survey and whose clients include American Express Corp. and General Motors Corp. "But when problems breed fear, it makes it even harder."
The survey, conducted by Thurm Marketing and Consulting, was sent out in April and May, prior to a spate of ad agency closings and a series of predictions that advertising was headed for its worst slump since the 1991 recession.
The most troublesome finding of the survey was the increasing tension between clients and agencies. Thirty-six percent of advertisers said there is now more tension, compared with 30% last year; 54% of agencies said there was added tension, up from 27% in 2000.
The downturn has also increased the focus on money in the relationship. Forty-two percent of advertisers said there was more focus on money, up from 32% last year; 71% of agencies reported an increased focus on money, up from 54% in 2000.
Report’s bright spots
Despite signs of increasing acrimony, the survey did indicate some bright spots in agency-client relations. For instance, 50% of agencies and 43% of advertisers reported more teamwork.
Asked to predict the effect on sales if the agencies working for them were able to do "their best work for you 100% of the time," advertisers estimated an increase of 27.7%. That’s the highest response to that question since 1997.
During the recession in the early 1990s advertisers estimated a sales increase of 21.1% if they could get advertisers to work at 100%.
Asked to rate the quality of work from their agencies on a scale of 1 to 10, with 10 the highest, the mean rating from advertisers was 7.1, only a tenth of a point lower than in 2000.
Both sides "really have to want great advertising," Salz said. "People have to be consistently open to new ideas. It sounds obvious, but advertisers need to say, ‘Let’s do something different.’"