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By Maddy Smith
Today, marketing procurement has greater influence and scope than ever, and as the findings of the Havas “Meaningful Brands Special Report: The Client-Agency Barometer” shows there is an urgent need to build a more meaningful relationship between agencies and clients.
Launched at this year’s ProcureCon Marketing EU Conference in London, Havas unveiled its “Meaningful Brands Special Report: The Client-Agency Barometer, which the agency claim is a ”first-of-its-kind” report examining how agencies can become more meaningful, long-term partners amid ongoing disruption brought on by the global pandemic, supply chain issues and shifts in technology and data.
Rising influence of marketing procurement
But, the report states, as client marketing investment has risen, so too has the influence of procurement departments – a group of professionals that has often been dismissed as merely in charge of making the numbers add up.
In fact, the report says, marketing procurement has greater influence and scope today than ever, and as the results of the study demonstrate, they are calling for an urgent reset of the agency-client relationship to ensure it is fit for purpose into the future.
Conducted in partnership with YouGov, the report consists of in-depth interviews and a wide-ranging quantitative study among more than 100 procurement decision makers in the US and UK. The Client-Agency Barometer paints a fascinating picture of the current state of how agencies and clients work together, the depth of passion and commitment evident on both sides and the importance of transparency, understanding and talent to the future success of the industry.
These same themes were echoed throughout the ProcureCon Conference with the opening address, delivered by Havas client Brioney Moore, Global Category Lead – Marketing Agencies at Reckitt, really highlighting those new challenges and priorities:
‘Finding the best talent and retaining them has become an increasingly arduous task; sustainability is no longer a ‘nice to have’, but rather an integral part of the agency selection process; today, procurement’s role is to help simplify complexity by providing consulting, bringing innovation and working as a true partner with agencies.
Moore also said that ‘our time is now’ observing that marketers have witnessed a dramatic rise in complexity, which they ultimately require procurement to help make sense of.
Discussing the report’s findings, Global Chief Strategy Officer Havas Creative Group, Mark Sinnock and Global EVP Managing Director Strategy and Intelligence Havas Media Group, Lizzie Nolan explore the multitude of factors leading to an evolutionary mindset which is evolving and changing what clients expect, as well as how agencies are set up to respond.
Significant growth in influence over the next 3-5 years
Procurement now perceive themselves as drivers of business transformation. Two fifths of the report’s participants believe that marketing procurement will become more important within their organisation in the next three to five years, while 43% say marketing procurement will become more influential within their organisation within the next 3-5 years. This further suggests the growing impact and influence of the sector in the coming years and the challenges facing agencies, which are identified in the research, are only going to become more pressing.
One in four respondents view transformation as the most important element of their skillset and responsibilities.
In terms of how, if at all, will the role of marketing procurement change over the next 3-5 years, unsurprisingly, driving business and sales performances was named by the most respondents (30%) as the most important factor affecting their roles at present.
As well as this, tech solutions, sustainability and purpose-led comms are the prime areas of importance over the next three to five years that fundamentally reflect the new dimensions of brand and marketing which must be embraced.
31% of respondents believe that innovation and future-focused solutions, data and technology will have a considerable bearing in driving change and the role of marketing procurement in this time period. Finally, two in five (42%) believe procurement will see an increased reliance on data and technology solutions
A lack of trust
It is well-documented that a lack of trust is evident amongst agency and client relationships. With the release of Havas’ Client-Agency Barometer 2022 report, this statement has become even more apparent. Respondents expressed concern which will ultimately make uncomfortable reading for agency leaders, painting a picture of a sector which is performing reasonably in some areas, yet has significant room for improvement in others.
Whatsmore, 56% of respondents believe that agencies over-promise and under-deliver while 53% say that agencies are getting complacent. These findings clearly show that once strong relationships are now under strain.
Shedding light on how agencies are failing to meet expectations, almost half of procurement leaders believe there is a disconnect between what they need and what agencies are offering, while 46% agree that agencies only provide traditional solutions to problems
“It is very much treated ‘them’ and ‘us’ and there’s very little trust on the client side of their agencies. I don’t get a sense of working together and collaboration and I think that the guards are up on the client side. There can be suspicion that they are trying to upsell us other products”, says a respondent from the report.
In addition to this, there is a sense that agencies aren’t making adequate effort to delve deep enough and deliver an in-depth understanding of a client’s business, and of what really matters to them. 40% of respondents believe that agencies don’t make an effort to understand the business in question.
However, the findings are not all negative, on some core competencies, agencies got a better assessment; three-fifths (62%) said that their agency partners fully understand their current challenges. But these statistics really put the state of these relationships on display with two-fifths (42%) believing that the only way to improve their agency relationships is with a pitch, those agencies that are failing to live up to their promises and offer relevant innovation could see their business at risk.
The satisfaction gap
Respondents were asked how important a series of behaviours were when considering their ideal agency relationship – and how satisfied they were in currently seeing those behaviours. In each case, significantly more said they considered a behaviour important, than said they were satisfied it was being delivered. In other words, there is a significant satisfaction gap.
Crucially, the report shows that there is a lack of trust evident between clients and agencies. Only 56% are satisfied they have an honest and transparent relationship with their agencies, while 80% see this as important, demonstrating a deficit of 24%.
All of the behaviours respondents were asked about – such as having an honest and transparent relationship – were seen as important or very important by between 61% and 80%, whereas satisfaction rates ranged from 44% to 59%.
In most cases, factors of higher importance had higher satisfaction, and the same was true with lower importance/satisfaction. But it is those areas with the biggest satisfaction gap – high importance and low satisfaction – that pose the greatest challenge for agencies.
The biggest gap – 27% – was found for the statement “my agency innovates for the right reasons, rather than just for the sake of it”. Three quarters (73%) of respondents thought this was important, but less than half (46%) were satisfied it was happening. “My agency helps us prepare for change and transformation” saw the next biggest gap, 24%, between those who thought it was important (68%) and were satisfied (44%)
Assessing current relationships: Relevant, meaningful innovation
These are clear warnings for agencies, with a clear call to action. Highlighting the importance of innovation and transformation at every level of clients’ businesses, the report’s findings remind agencies that it is not adequate to solely claim you can help support in these areas, but to actually deliver is going to be key to forming a long-term, meaningful and lasting relationship.
Before summarising the key findings of the client-agency barometer report, Sinnock explains that the combination of qualitative and quantitative research has allowed broad insight into the problems at hand in the marketing procurement field, but also gives depth and context as to why certain issues are present in the marketplace.
A new dynamic agenda is emerging – as consumers shift and organisations try to adapt and pivot in response. Previous relational studies may have unearthed some historic issues, but now, the industry is witnessing the emergence of a more future-facing agenda. The need for more clients and agencies to act on a new set of transformational criteria is apparent.
One way to look at this, he states, is to assess how marketing procurement view their role. This is a dynamic perspective, one which is frequently evolving and the report highlights that innovation and future-focused solutions now equal business performance as the most important aspects of the role as marketing procurement professionals.
In fact, 58% of participants expressed that they are now future-focused and are increasingly responsible for driving innovation, digital transformation and adopting new strategies.
Repairing strained agency-client relationships
Ultimately, while these relationships may be under strain, they certainly have the potential to be repaired. Nolan points to seven steps which can be taken to work through these challenges. The levels of importance and satisfaction on a number of critical attributes were studied, through taking on responsibility from both sides, these relationships can be strengthened.
Borne out of the study, Havas identified seven guiding pillars for agencies to build more meaningful relationships, including:
Crucially, Nolan says, the relationship must be a source of transformation. By first agreeing on the level of ambition needed, then managing that change together, rapport between the two parties can be strengthened. Both clients and agencies must stay close and honest, work to understand the total business and educate on the interdependencies, be curious and create a positive impact with consumers and their respective categories, and bring new experts and talent to the table. Fundamentally, Nolan advises, everything should be tied back to tangible value and holistic return on investment.