Major advertisers believe that their agency partners are still offering value in 2022, according to new research from the WFA and strategic partner The Observatory International.
According to Global Agency Remuneration Trends, perceptions of value provided from relationships are up five percentage points since the last such study in 2018, to 17% among those agreeing “most strongly” with the statement “I feel that I am getting value for money from my agencies”. Compared to the WFA’s first such study in 2011, value perceptions – “agree somewhat” and “agree strongly” – are up 19 points.
Media agencies are not so good however, with 5% strongly disagreeing that they are getting value. Anecdotal suggestions appear to indicate that a lack of original thinking and a habit of rolling out the same solutions year after year has led some respondents to question overall value (rather than performance).
Global Agency Remuneration Trends also reveals that the long-term trend for more payment terms based on labour and performance continues, with labour and FTE (full-tine hours) arrangements still dropping back. The former is up from 9% in 2011 to 22% currently, while the latter is down 54% points to 33% since 2011. In-house agencies tend to be rewarded based on FTE like employees.
The study is based on responses from 200 senior executives, mostly in marketing procurement roles, representing 84 companies, with a total global annual ad spend of more than $136 billion.
More than four in 10 respondents have seen significant increases in prices for digital and CRM services, with anecdotal reports suggesting that these can be as much as 50% for digital and as high as 20-30% across Europe and the UK for particular areas of technology specialism.