• by Karl Greenberg , September 15, 2009

An inaugural study by the Association of National Advertisers (ANA) suggests that a successful marriage between marketer and agency has at least one thing in common with a successful domestic union: regular communication, sometimes with an objective third party in the room.

Overall, 82% of respondents to the ANA survey said their companies regularly conduct formal agency performance evaluations.

The survey of 117 marketers that ANA polled in July this year finds that about 92% of firms with annual revenues of $5 billion or more have formal agency-evaluation programs. Seventy-four percent of smaller companies have such programs.

The majority of respondents -- 76% -- said they evaluate their creative agencies; 68% said they also evaluate their traditional-media agencies; 47% said they evaluate their digital agencies, and 25% their direct-marketing, PR and multicultural agencies.

Most marketers said that a formal agency evaluation process helps them identify and improve under-performing agency relationships as well as high-performing agency relationships.

And survey respondents said that quantitative metrics on things like media costs savings, sales and market share matter less than qualitative criteria like "innovation," "strategy" and "ideas." The most important criteria were -- in descending order -- innovation, strategy, implementation and follow-through, fiscal stewardship, ideas, teamwork and meeting project objectives.

Bill Duggan, executive group vice president of the ANA, says this trend may be changing because of tighter budgets. "My speculation is that if we had done a tracking study like this and had this information from three, five, 10 years ago, we would have seen the needle moving toward a greater importance on quantitative business aspects."

Fifty-nine percent of firms surveyed do two-way evaluations in which the agency also rates the client. Thirteen percent said they also have their respective agencies evaluate one another.

In general, for virtually all types of agencies, formal evaluations are conducted annually by about two-thirds of the firms, while about one-third evaluate their agencies more than once a year.

The ANA used the survey data to cook up best practices: Marketers should formally evaluate agencies on a regular basis; they should assign a neutral internal or external "point person"; consider having a more informal "mid-term review"; use a consistent format for all agencies; get the agency's perspective on you; present results in person, and have deadlines to fix problems.

Says Duggan: "The new news is that in an era of marketing accountability, it is more important than ever."