There's a Client-Agency Disconnect Going On
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We at RSW/US recently completed our 2009 ½ Client-Agency Economic Outlook Survey with respondents including 200 marketing executives and 100 advertising agency executives. We had a nice range of agencies (Leo Burnett and Mindshare for example) as well as clients (Abbott, Kraft and Lego for example).
We found agencies are a bit more optimistic than clients regarding the economy and the ad business for the remainder of ‘09.
So what does that mean? A bit more detail into some other findings gives a clearer, if not more interesting picture. 53 percent of agency respondents said that client spending was down 11 percent or more in the first six months of 2009, while only 39 percent of clients thought the same. So, agency execs feel they’ve been hit harder than client perceptions of spending levels imply.
Another interesting finding: 30 percent of agency respondents said that client spending was down 21 percent or more in the first half, but only 8 percent of clients thought that spending fell by this much.
Obviously there’s some kind of communication or perception-reality gap here. Is this indicative of typical agency-client relationships these days or more a product of the downturn? From our perspective-that of a full-service new business development firm in the marketing services space, we're seeing more project work and less lead agency searches. So in that situation, it certainly makes it harder to have deeper, communicative relationships.
Agencies have to be patient right now and keep the lines of communication open and because that's easier said than done, keeping the new business pipeline full has never been more important.
On the other side, clients need to be upfront about what they expect and need from their agencies. They need to treat their agency like they would themselves want to be treated – with respect and an open line of communication. If things are getting tough, talk to your agency.
It will make for a better relationship, a smarter partnership, and better business in the end.
Lee McKnight Jr.
Director of Business Development
RSW/US (formerly Reardon Smith Whittaker)
Lee began his career in the early stages of interactive healthcare marketing in Nashville, Tennessee. Prior to joining RSW in 2007 as a New Business Manager, Lee was engaged in the grocery industry, based in Cincinnati, OH, aiding wholesaler grocers on the general merchandise side with in-store marketing and logistics capabilities.
RSW/US: RSW/US is a marketing-centric lead generation/business development firm.
Comments
I'm not sure I agree with the concluding statement in this article. Agencies are facing a double-edge sword. Either the agencies made some significant errors in marketing/promotional strategies for an upcoming OBVIOUS economic downturn, or they have no control over these factors in the business world. Any way you spin it, it doesn't look good for many agencies out there.
In these economic times, prices are shifting, demand is unstable, and product mixes are uncertain. These businesses are trying to figure out where to go in the next six months. So, it's totally unrealistic for agencies to be waiting for "clear communication" from their clients.
If anything, agencies need to spend this time reworking, reconfiguring, and restructuring for the new economy. Clear communication and concise objectives only apply to partners that are relevant to the needs of the organization. This is a statement about the relevance of agencies to current client problems.
Posted by: Kenyatta Lovett | July 4, 2009 10:46 PM
Kenyatta,
Thanks for your comment. I agree with the majority of what you said, but would respond to “it's totally unrealistic for agencies to be waiting for "clear communication" from their clients.” I actually agree, and in regards to existing client relationships, I mentioned agencies need to be patient, but more important than ever, need to focus on new business.
So I’m not advocating a “wait-around” approach at all in terms of new business, but in regards to existing/current clients specifically, and the survey and our current agency clients bear this out, you’re correct-clients are trying to figure out their future game plans.
On top of that, there’s an apparent lackluster communication flow in many cases. Which leads to your point regarding reworking, reconfiguring, and restructuring. Per the post, and from a disclosure standpoint, my firm focuses on agency new business efforts, but I would stress, whether an internal or external effort like ours, a consistent new business effort needs to be an integral part of any overall agency business plan.
Posted by: Lee McKnight Jr | July 6, 2009 10:37 AM
I have to disagree with Kenyatta's comment, "it's totally unrealistic for agencies to be waiting for "clear communication" from their clients."
True, agencies should never "wait around" for direction. If you're just waiting to be told what to do, you're not thinking and you aren't working hard enough to help drive your client's business. However, it is not acceptable for a client to keep an agency partner in the dark and "hope they figure it out."
I have been on both sides of the business, servicing and working for F50 corporations. Consistently, clear communication was at the core of any success. Once clear communication disappeared, the relationship and results deteriorated.
In the end, communication, which leads to trust, will build the best and most beneficial relationships for BOTH parties.
Posted by: Shawn Freeman | July 7, 2009 3:02 PM
Thanks for the comment Shawn, I think you essentially nailed it.
Posted by: Lee McKnight Jr | July 13, 2009 12:21 PM