Agencies get more comfortable being honest with clients

Agencies are becoming more likely to speak up about changes they want to see in their client relationships, but they still have issues with how they’re graded. According to the Client-Agency Performance Evaluations 2022 report by the World Federation of Advertisers, 68% of agencies reported they were more comfortable being honest with clients about needed changes in the agency-client relationship compared to just 45% two years ago. This shift in perspective also has agencies agreeing that clients need to improve their internal processes, with only 13% of respondents—a drop from 38% in 2020—agreeing that “no matter the feedback, client is king and won’t change.” Laura Forcetti, director of global marketing sourcing services at the WFA, compares the shifting relationship to a marriage, where both parties need to have a platform for constructive feedback for the relationship to work. “I think there might be an understanding from the clients who are now thinking, ‘this is not just an agency issue and this is something we need to work on together,’” Forcetti said. “If there are some negatives you want to improve, either agency or clients, they probably won’t guess it. You have to chat.” The findings are based on more than 90 respondents from 49 clients and 33 agencies, with advertiser respondents responsible for more than $69 billion in global ad spend, and were compared to a survey from the first quarter of 2020. Subscribe to Ad Age Sign up now for the latest industry news and analysis Click here The biggest challenge agencies currently face during performance evaluations is incongruent needs and expectations from their advertiser clients. The survey found that 53% of responding agencies were frustrated that scattered priorities across a client’s siloed organization negatively affected performance evaluations. In addition to differences in needs between procurement, agency management and marketing teams, clients may work across multiple agency teams, further muddying the water. In the agency-client relationship, advertisers also need to work harder to become a “client of choice,” said Forcetti. “Doing this means starting ‘at home’ and looking at their own performance before blaming their partners,” she said. “Clients must get their houses in order, and performance reviews provide agencies with an opportunity to help them on that journey.” Both advertisers and agencies found middle ground when discussing the current mix of KPIs. Client satisfaction is the top KPI used to assess an agency’s performance by both clients and agencies, and collaboration, efficiency and effectiveness were all seen as important to both groups. However, 44% of clients expressed a concern over the lack of measurable and objective KPIs. While some services lend well to objective evaluation, others might not, and measurement and attribution of success can become even harder when multi-agency teams collaborate across projects or campaigns. Top marketers, brands and agency ventures Ad Age Datacenter’s definitive rankings of the biggest U.S. and global advertisers and agency companies Click here Consequently, agencies don’t always think it appropriate to be paid based on performance alone. Less than half of agencies think their compensation should be linked to the results of their evaluation, according to both the 2020 and 2022 studies. In at least three out of four cases, media agencies receive compensation based on the results of evaluations as KPIs tend to be more objective and measurable, but digital (35%) and production (44%) partners said they most likely will not get an opportunity to receive structured feedback.

Agencies get more comfortable being honest with clients

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