Analysts: Agency Account Reviews Pick Up Steam, Particularly For Media
"Among the five consultants we interviewed, only one was certain that ad spend was on the rise, while three doubted there would be meaningful improvement until 2011 apart from a bounce off depressed 2009 levels," Deutsche Bank analyst Matt Chesler wrote in a note sent to investors this morning. "These comments are at odds with recent agency execs commentary and media seller data points."
Ad volume aside, Chesler wrote that the analyst believe that the role of corporate procurement departments is growing "more benign" in agency account pitches, and that they are becoming more of an "ally" in terms of advocating "value-based" approaches to agency compensation, though they also expect agencies to take on more of the risk associated with advertising and media campaigns.
"The key positive is that low price may no longer necessarily be the winning strategy, rather proper scope, productivity and growth," Chesler noted.
The search consultants also reaffirmed an overall demand among marketers for more "integrated" approaches to agency services.
"While a variety of desires will continue to exist (separate best-in-class, coalitions, integrated), we heard of increasing requests for agencies to bring all the resources, particularly now that client organizations are better structured," Chesler reported. "Overall smaller agencies have done a good job competing with larger ones, often by bringing in partners. A major knock on large networks is the view that services that aren't needed are being pitched to re-capture overhead."
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