Agencies feel more comfortable being honest with clients, WFA research
Agencies are increasingly comfortable with being honest with their advertiser clients when it comes to performance evaluation, according to new research from the World Federation of Advertisers and strategic partner Decideware.
Client-Agency Performance Evaluations 2022 finds that 68% of agencies are now comfortable telling their clients the majority of the time what needs changing at their end, compared to just 45% two years ago.
Agencies also reported a slight uptick in qualitative performance being evaluated (56% compared to 54% in 2020), again at least a majority of the time. While this was not a significant increase, holding steady might be viewed as a win and the vast majority of agencies now receive some level of performance feedback.
The findings are based on more than 90 respondents from 82 multinational organisations (49 clients and 33 agencies), with advertiser respondents responsible for more than $69 billion in global ad spend.
Nevertheless, the current mix of KPIs is causing dissatisfaction among both clients and agencies. While the top KPI for clients – client satisfaction – aligns with agency desires, advertisers also added that the lack of “measurable or objective” KPIs is their No. 1 concern. Agencies indicate the wrong things are often being measured.
The result is that agencies do not always find it appropriate to be paid based on their performance. Mirroring the previous study in 2020, less than half of agencies think their compensation should be linked to the results of their evaluation.
Broken down by agency type, clients seem to be prioritizing media, full service and creative agencies for most regular evaluation. 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.
Digital (35%) and production (44%) partners indicated they are most likely not to get any opportunity to receive structured feedback. Overall, almost one in three agencies surveyed said they still didn’t have any opportunity to evaluate their clients, with a further quarter having to do it in an unstructured way.
Nevertheless, rising agency satisfaction with improved client processes is illustrated by the drop to 13% (from 38% in 2020) in agencies agreeing that “no matter the feedback, client is king and won’t change”.
Such additional improvements in the investment to debrief and create action plans to address feedback makes it more meaningful and will encourage respondents on both the agency and client side to provide meaningful feedback.
Another more positive result is that more than half of the client respondents currently evaluate the collaboration between agencies. Fifty-three percent of advertiser respondents say they now test collaboration, reflecting the need for campaign integration and the fact that the execution of modern campaign takes numerous and varied skillsets. Such efforts signal to the agencies that “playing well together” is a serious expectation.
As one advertiser respondent explained: “Our ecosystem is premised on cross-agency collaboration, with each agency bringing their unique specialist skills. It starts with clearly-defined swim lanes and the quality of the collaboration is monitored.”
Laura Forcetti, Director of Global Marketing Sourcing Services, WFA: “Advertisers need to work harder to become the client of choice by actively nurturing agency relationships. Doing this means starting ‘at home’ and looking at their own performance before blaming their partners. This report highlights the No. 1 challenge faced by agencies is ‘conflicting needs/expectations across siloed client organisation’. Clients must get their houses in order and performance reviews provide agencies with an opportunity to help them on that journey.”
The full research can be accessed here
