Summer has come and gone and there’s business to take care of before the Fall and Winter holidays. In the marketing and advertising space that means the potential to gain, as well as lose, clients as sources will tell you September is the month of the year with the highest volume of agency reviews. We tend to make net gains, and we attribute putting the customer first, but digging deeper, why do brand CMOs put agencies under review?
To stay on our toes and abreast of brand needs each year we turn to several sources of information beyond working directly with our client contacts. One source we enjoy is the CMO Council’s State of Marketing report. Leveraging data collected in Q3 and Q4 of the current year, the report paints a picture of the past, but just as importantly the future as it asks marketers how they’ll be moving forward.
Agency Relationship Changes by Type of Agency
It’s interesting to see the breakdown of where change will be happening, and the CMO report asks marketing leadership at brands “What agency changes do you plan to make in the coming year?” Here’s where brands laid their plans for change in 2013:
- 22% – Social Media
- 20% – Public Relations
- 20% – Web Design and Development
- 15% – Advertising
- 11% – Branding and Imaging
- 10% – Search Marketing
- 9% – Media Buying
- 9% – Interactive/Digital
- 8% – Mobile Marketing
- 7% – Events/Shows/Experiential Marketing
- 7% – Direct Marketing
- 7% – Demand Generation
- 6% – Loyalty Program Management
- 4% – Other
How are Agencies Performing According to their Customers?
One of the most interesting questions asked each year is “How do you rate the value and contribution of your agency partners?” The picture this year? Mediocre with only 12% indicating Extremely Valuable and 35% indicating Pretty Good. More than half of respondents were less than enthusiastic about their agency’s performance indicating the following ratings: Average: 35%, Underperforming: 11%, Don’t Know: 7%, and the nightmare grade, Not Producing at All: 1%.
What CMO’s Want
Why are CMO’s disappointed? Topping the charts this year’s are “Lack of innovation and value-added thinking,” “Business results and campaign outcomes,” and “Quality and consistency of service.” Nothing too earth shattering there. CMOs and senior-level marketers are under heavy scrutiny, being asked to explain the basis of their plans to establish budgets, and then are expected to demonstrate the ROI achieved. Marketers want consistent, strategic, results-driven marketing that works. And yes, you can’t just dream it up, you have to pull it off, it needs to be integrated across channels and the creative still needs to kick ass.
What are the key reasons for the change? (in agency relationship)
- 44% – Lack of innovation and value-added thinking
- 33% – Business results and campaign outcomes
- 26% – Quality and consistency of service
- 25% – Agency performance did not meet expectations
- 24% – Uninspiring creative work
- 22% – Unable to execute integrated campaigns
- 19% – Budget limitations
- 17% – Lacked digital marketing knowledge and expertise
- 13% – Bringing functions in-house
- 6% – Change in management led to change in agency relationship
- 6% – Agency is not global in nature
- 5% – Agency is too small; could not scale
- 4% – Conflict in strategy and approach
- 1% – Personal Chemistry
- 8% – Other
Pssst. Hey you there, VP of Marketing…or CMO is it?
If you’ve put, or are putting, your agency up for review were your reasons consistent with the CMO Council’s report or were there other critical reasons?