Four in Five Clients Measure Agency Performance Annually: ANA Survey
A new survey from the Association of National Advertisers finds a hefty majority of advertisers—more than four out of five– reporting that they regularly evaluate the performance of the advertising agencies retained on their accounts.
According to the report, about two-thirds of the firms said they conduct annual performance reviews of their agencies, while about one third said they do so more often than that as part of standard operating procedure.
Clients are also much less likely to set up regular re-examinations of their multicultural, digital, PR or direct marketing agencies than of their basic creative agency, according to the survey, conducted with the help of the marketing services group Mktg. The poll found that while about 68% of respondents said they have a formal evaluation process in place for their traditional media agencies, only 47% reported the same in regard to their digital marketing agency, and only about 25% said they regularly examined the performance of their direct, PR and multicultural agencies.
The greater the company’s annual revenue or the larger the marketing spend, the more likely it is to institute formal performance reviews, according to the study. Ninety-two percent of firms with annual revenue of $5 billion or more had institutionalized agency reviews, against only 74% of companies with lower revenue. And while 96% of companies with ad budgets of $50 million or more ran regular, set review processes, only 71% of those with smaller ad budgets said the same.
The survey, conducted in July 2009 and due to be presented at the ANA Agency/Client Forum in new York on September 24, found that qualitative performance criteria outweighed quantitative findings about communications (e.g. media cost savings, media buying goals0 or business metrics (e.g. sales, market share) in the reviews that respondents said they conducted.
Among the criteria named as important in agency performance reviews: innovation (cited by 85%), strategy and implementation/follow-through (both 82%), fiscal stewardship (81%), and ideas, teamwork and meeting project objectives (all named by 77% of respondents.)
Top benefits of taking regular scheduled looks at agency performance are improving under-performing relationships (92% of those polled) and recognizing and rewarding agencies doing outstanding jobs (85%.)
“Having a formal agency evaluation process is always imperative but even more so at a time of heightened focus on market accountability,” said Bob Liodice, ANA president and CEO, in a statement. “The companies that plan regular assessments are likely to identify successful and under-performing aspects of their agency relationships, leading to constructive dialogue and exchanges. This will productively support collaborative integrated marketing and brand-building strategies in the long run.”
