The Long and Short of Agency Relationships

The Long and Short of Agency Relationships

According to a new Jupiter Report entitled The Essential Agency: Positioning Interactive Agency Offerings as Marketing Needs Evolve:
- 37% of advertisers prefer to compensate agencies on a per-project basis
- 23% favor paying a straight retainer.

Jupiter analysts found that agencies that provide context and analysis and identify drivers of consumer response will find their relationships with advertisers elevated above those of a typical vendor.

"Advertisers are ambivalent about the future of their agency relationships, preferring project-based compensation during uncertain economic times," said Marissa Gluck, Jupiter senior analyst. "As advertisers respond to a dismal economic climate by slashing their marketing budgets, agencies must start to rethink pricing, structure, and how they market themselves. This means focusing on marketing the competencies such as cross-client learning, idea generation and brand building."

According to the study, there is no clear pattern ahead:
- 34% of advertisers believe their agency relationship will improve
- 21% of advertisers are unsure how their agency relationship will evolve
- 27% want to bring services in-house
- 18% feel their agency relationship is transient-based on cost

According to the survey:
- 43% of advertisers choose multiple agencies to meet their interactive needs
- 43 % favor a single agency

Of those that prefer a single provider,
- 25% use an independent shop and
- 18% use an agency affiliated with an off-line shop.
- 41% of marketers that hire a single agency assign both execution and strategy to the agency, compared with 26% of advertisers that use multiple agencies.

Gluck said, "There are discrete competencies that agencies should highlight as they sell themselves to clients, including their understanding of branding and exceptional creative." And, the preeminent factor influencing an agency affiliation is often indefinable - human relationships.

You can read more here.

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