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Overall, marketers said the ad industry is performing well, although almost 40% criticized agencies for seeking creative glory -- i.e., awards -- at the expense of effectiveness.
Andre Cappon, president of Ballester Inc., revealed the study findings at the American Association of Advertising Agencies' 2003 New Business Summit at the Millennium Hotel in New York. "Eighty-one percent of advertisers accept that their agency can offer integrated services but they prefer to unbundle their business to the experts in each field," Mr. Cappon said.
Downside to integration
Mr. Cappon said that only 43% of advertisers surveyed described a single agency's ability to offer fully integrated services as "very important." Downsides cited by respondents included missing out on cutting-edge practices; damaging creative; difficulty managing integration; and concern about having one agency handling the whole ad account, a point illustrated by one respondent's statement: "I go to a specialist, I don't go to the same doctor for everything."
Speaking to 450 advertising executives and industry consultants, Mr. Cappon detailed the survey's findings, which covered everything from the reasons for initiating an agency review to length of client-agency relationships and compensation issues. Respondents, mostly senior managers, were interviewed between December 2002 and April 2003. No agencies were interviewed.
Survey results also show client-agency relationships are shortening: In 1984, relationships between clients and agencies lasted on average 13.1 years; in 2001, the number was 7.6 years.
Reasons for calling reviews
The two main reasons for calling a review cited in the study were marketers outgrowing the agency or their general dissatisfaction with their incumbent. Of advertisers who have recently held a review, only 20% retained the incumbent, and the reasons for doing so included agency and client consolidation and mandatory reviews, such as for government accounts.
The Ballester survey found that agency search consultants participated in only 30% of pitches, and most of those were for reviews of $50 million in billings or less. Most respondents said they were unimpressed by unsolicited pitches from agencies. Advertisers say the most effective way for agencies to approach them is through personal contact and recommendation, while using e-mail or mail is not effective. Clients' top methods for developing their long list of prospective agencies include personal contact, agency search consultants and noticing an agency's campaign for another advertiser.
Marketing executives sitting on a panel titled "Break-Through Prospecting" echoed those sentiments. Executives from JetBlue, IBM and Smith Barney suggested agencies tailor correspondence that communicates respect and knowledge of a potential client's company and industry.
"Manners and intelligence go a long way," said Amy Curtis-McIntyre, vice president of marketing for JetBlue. That can be as simple as a prospective agency acknowledging a client's current relationships.
Bret Sanford-Chung, senior vice president for Smith Barney said that, in her position, she is familiar with agencies, so they needn't waste time telling her about themselves when she is more interested in what they can do for her business. Of the hundreds of solicitations she received when Smith Barney held a review several years ago, none became a contender for the business. Those who made it into the competition came through referrals.