Study: 62% of CMOs Categorize Agencies As Vendors

As if you needed yet another data point to shock you out of your Carlton Terrace-addled mindset that you are God to your client, check out new research from Avidan Strategies that finds 62% of CMOs categorize their agencies as suppliers and not true marketing partners. Sharing further sadness, Dan writes: "73% of those polled point to their agencies’ incapacity to come up with genuine consumer insights, while 58% feel that agencies don’t make recommendations that are ‘media neutral,’ even though it could be good for brands.” Instead, they are still too focused on “television as the solution to every communication problem." Oh, and then there's this: "Only 32% of the respondents polled think that the traditional agencies are doing a good job of evolving and extending their digital marketing capabilities, while the overwhelming majority, 68%, believe that agencies are struggling to transition their business model and are playing catch-up in digital." People, it ain't pretty. And this is but one of many studies that scream the same thing: Clients just aren't down with agencies the way they once used to be. And it's going to be a gigantic challenge for agencies to turn this ship around -- if that's even possible.

Oh, and who needs advertising agencies when everyone's becoming a brand advocate? A recent study from eCommerce company Needle found that there are 37.5 million who are "prime candidates to become brand advocates." Now, that doesn't mean they all are just yet -- but the study did shed some light on advocacy mentality. In the study, two-thirds said that sharing is a passion of theirs and that helping customers is their primary motivation, more so than compensation. The average brand advocate is younger than 45, highly educated and social media savvy. And the majority are employed full-time, with 25% making more than $75,000. Of course, these brand advocates have nothing to advocate for unless they are aware of advocacy-worthy brands. Hmm. Maybe that's where agencies can help.

BMO Capital Markets Analyst Daniel Salmon
believes Omnicom is on the right track to consider offering eCommerce services. Salmon tells us: "As traditional competitors like WPP and Publicis bulk up their offerings in this area and IT Services companies like Accenture and Deloitte build out more marketing services, we believe Omnicom is examining the opportunity in this area closely.” The company already has a little eCommerce expertise, but we believe Omnicom could look to develop a stand-alone entity that specializes in this type of work." Salmon thinks this expansion into eCommerce services could come from M&A activity -- like the acquisition of a company like Sapient. Clarifying things based on recent events, Salmon said: "To be clear, we felt that an acquisition of that size was a low probability a week ago; with a CFO transition now under way at Omnicom, the probability is likely even lower. However, we decided to run the analysis anyway. Not surprisingly, as return on cash and borrowing rates remain low, the analysis shows that an acquisition of Sapient would be about 4% accretive to 2016 [earnings per share] if done at a 20% premium to [Sapient’s] Friday close.”

If this tweet from Hill Holliday Chairman and CEO Karen Kaplan while at Fenway Park with Wieden+Kennedy Managing Director Tom Blessington to say goodbye to Derek Jeter were to be taken literally, then it would appear the two agencies are in merger talks. Then again, it's more likely Kaplan is just pulling everyone's leg. It's well known that Kaplan and Blessington worked together a quarter century ago at Hill Holliday and have been friends ever since. No need for everyone to get all atwitter over this.



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