50% of Agency Relationships Last Less Than 2 Years

Research shows that half of the agency/client relationships out there last less than two years. This is from a sample of about 140 companies with an annual marketing spend of at least $2 million, including Citibank, General Mills, IBM, GE, and ESPN.

After nearly 15 years in agencies, this percentage sounds about right. But where the research tries to determine why this is the case, I take issue with it.

The other big reason [for the short tenure] is likely the fact that agencies take their eye off the ball. When you examine the reasons why clients get rid of agencies, a lot of it has to do with weaknesses in strategic thinking, creative, and service. Too many agencies try and do too many things well. They are in the business for being great creative and strategic thinkers and do-ers…not to be a great lead generation/business making machine. Too many agencies take their eye off the ball soon after an account is won, only to look for the next new win. Staying more focused on existing clients and leaving the business of building business to experts is likely a more productive strategy, long-term.

A lead generation firm sponsored the research. This fact turns the above excerpt from a research insight into a thinly-veiled ad.

It’s Not You, It’s Me
So who’s fault is it? Part of this churn is a natural cycle vs. it being someone’s fault. Marketers are restless creatives at heart. The shelf life for any type of creative work is getting as short as consumers’ shrinking attention span. And, while it’s expensive to select a new agency and get them ramped up on your business, doing an agency review is often seen as the best way to get new ideas. Even the research notes (depressingly) that “more than 40 percent said they 'look forward to' or 'find it exciting' to search for a new agency.”

But there are also external factors that impact the client/agency relationship. Many of these factors are out of the agency’s control, including industry economic climate, client contacts changing jobs, client politics and client chemistry. These are just a handful of items to deal with and we haven’t even discussed the work yet.

Since moving client side three years ago, one of the biggest benefits I've discovered is time. I’ve been able to prioritize and grow our marketing efforts strategically. With a few years of momentum, and plenty of results along the way, I'm looking forward to doing even more in 2008.

This may read all Pollyanna, but I think clients and agencies need to rethink ways to keep their relationship vital to realize this kind of return on investment. Yeah, who am I kidding. Anyone want to be a client/agency counselor? LOL, I can see the role playing session now.

In the middle of nowhere uploaded by psiconauta
tags | public relations | PR | advertising | marketing

Comments

[Jason Falls]

Great post, Kevin. Being on the agency side, it's not surprising I would lean toward the client side in terms of blame, but let me say that in my relatively short time in agency life, I have noticed shortcomings on both sides of the aisle in relationships that have soured. Your wide-angle point of view is well-received.

I will say this, however. How can a client expect an agency to learn their business, conduct the appropriate market research, develop focused strategies, concept creative, run through the revision process, launch campaigns then adjust strategies accordingly in two years? I've been working with a particular client for almost two years now and I still understand about 1/5 of their business.

Clients need to understand that a marketing or advertising agency almost needs to start from the ground floor, learn the ins and outs of you, your customers, your competition and so on before there can be reasonable expectation of tremendous success. Until that point, there are agencies that are good at holding down the fort, tweaking as they go and what-not, but two years is simply not enough time.

The problem is the CEOs and CMOs are given annual deadlines to improve or even they won't last long. The current lifespan of a CMO among fortune 500 companies is something like 26 months. Is that the agency's fault? Don't think so. Corporations want immediate returns on an investment that takes years to mature. The business tenor of today doesn't allow CMOs or agencies to be successful.

My agency has clients that come and go, just like everyone else's. But we also have two clients who have been with us for 40 years. And those two clients have experience the most success of any we've worked with.

Certainly, my view is from one side of the aisle. I look forward to the continued discussion to get others' take.

[Sherrilynne]

Hi Kevin...This post made Jo's Top 5 this week.

[Sherrilynne]

Hi Kevin...This post made Jo's Top 5 this week.