Clients may pay the bills, but a new report from the World Federation of Advertisers (WFA) indicates that agencies feel more comfortable than in past years sharing honest criticism with the brands that pay them when it comes to measuring performance.
Client-Agency Performance Evaluations 2022, a survey and report that WFA conducted with Decideware, finds that 68% of agencies are now comfortable telling their clients (most of the time) what needs changing at their end, compared to just 45% two years ago.
That said, 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 said that the lack of “measurable or objective” KPIs is their top concern. Agencies indicate that the wrong things are often being measured.
Thus, agencies do not always find it appropriate to be paid based on their performance. Less than half of agencies think their compensation should be linked to the results of their evaluation, which is in line with the previous WFA study on the topic, completed in 2020.
Broken down by agency type, clients seem to be prioritizing media, full service and creative agencies for the most regular evaluations. 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 agencies (35%) and production firms (44%) 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.
Still, 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.”
Commenting on the survey results Laura Forcetti, Director of Global Marketing Sourcing Services at the WFA stated, “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.”
She added that the report highlights the top challenge faced by agencies, which is “conflicting needs/expectations across siloed client organization”. Clients, she said, “must get their houses in order and performance reviews provide agencies with an opportunity to help them on that journey.”
The findings are based on more than 90 respondents from 82 multinational organizations (49 clients and 33 agencies), with advertiser respondents responsible for more than $69 billion in global ad spend.