Tuesday, December 16

Trending Ad Agencies: Reardon Smith Whittaker

According to a survey conducted by Reardon Smith Whittaker (RSW), the percentage of work assigned to full-service advertising agencies is on the decline. In as little as two years, work assigned to full-service agencies dropped from approximately 60 percent to 48 percent.

The poll included 184 marketing and brand executives in November. It included representatives from companies such as AT&T, Merck, MetLife, and Revlon.

What seems significant about the November study is how it compares to another study released by RSW earlier this year. Only 38 percent of 103 key agency principals (slightly more than specialized agencies) believed that the type of agency that would be most successful in 2008 would be those with a specialized focus or service.

Are Full-Service Agencies Losing Their Luster?

While Adweek picked up on the top-ranked reasons respondents launched reviews — unhappiness with their agency's strategic thinking (46 percent), dissatisfaction with creative work (40 percent), and not being proactive enough (38 percent) — the open questions provided even more insight. By using TagCrowd, we discovered a takeaway that reinforces where agencies might be missing the mark.

If you had one piece of advice to give to agencies about their marketing efforts, what would it be?

Understand the client better, listen, be honest, and show respect.

If you had one piece of advice to give agencies about their presentations (other than making them shorter) what would it be?

Customize the plan, research the market, and produce relevant creative.

While creative remains a key factor, clients are becoming even more interested in agencies that understand their markets and demonstrate strategic thinking. It stands to reason. The most common agency selection method is a competitive pitch process, which asks full-service agencies to create compelling campaigns with the least amount of client interaction to win the account. More often than not, the client will then introduce new information that alters any semblance of what the agency pitched.

The result? Almost half of the executives admit they don't know what to expect until after the relationship begins. Forty-six percent also said their last agency of record retained the account for less than two years (18 percent said less than one year). Most clients also work with several agencies and specialized firms in addition to their primary agency.


Anonymous said...

I think the decline began some years ago, during the heyday of the dot com era, when many businesses and entrepreneurs saw a new vehicle to reach their customers and audiences. But the agencies weren't sure what to do with this new thing called the Internet.

The way I see it, when that boom went bust, the full-service agencies sighed in relief and simply sat back, dismissing the Web as a passing fancy. While they weren't looking, the Web continued to grow, actually exploding and changing the way the majority of Americans interact with each other. This is forcing the full-service agency to come to grips with reality and this new landscape. If it's tough for the those of us immersed in all-things-Web to keep up with the advances, imagine the confusion these agencies have, not knowing even where to begin!

These firms continue to rely on traditional media (i.e. outdoor, newspaper, radio, TV/cable) for a majority of their revenue via commissions. But by not having an internal division or staff members with Web smarts and savvy, they'll never be able to bring an integrated plan to the table that can address a client's needs and objectives.

I strongly believe that any advertising, marketing, PR or communications firm must have a solid understanding of both old and new media - it's all about integration or, at the very least, knowing the tools to use to achieve results.

Thanks for an important post!

Rich on 12/17/08, 9:35 AM said...


Some good points Bonnie.

Agencies are generally quick to adapt so we'll see where it leads them. On the front end, most agencies did not see any value in Web sites, but then quickly began adding it into their capabilities when Web site designers beginning to move into print and other areas.

I suspect social media will be the same. Agency owners list social media as the number one priority, but few really understand it. I'm surprised they've taken this long to include it among their capabilities. We shall see what 2009 brings. :)

All the best,


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