Client-Agency Relationships In A Downward Spiral

Client-Agency Relationships In A Downward Spiral

Agencies think clients hinder their innovation, while clients are reporting a very average level of satisfaction with their agencies, according to Volume 1 2016 of the SoDA Report on Digital Marketing Outlook.

Hannah Edensor
Posted by Hannah Edensor

SoDA is an international association of respected digital marketing leaders and entrepreneurs with a history and a vision for the future of marketing, with select members coming from 107 leading digital agencies and elite production companies with offices in 34 countries on six continents.

It seems while relationships between agencies and their clients were rosy in 2015, they’ve hit a roadblock of late, with a number of agencies claiming relationship improvements falling from 70 per cent to 53 per cent.

The reason? The report claims it comes down to an “increasingly competitive landscape”, where clients work across multiple agencies and are feeling the pressure to create banging campaigns, as well as constantly getting one-up on their competitors.

Agency respondents have a decidedly less optimistic outlook on their relationships with clients than in 2015, and it seems the challenge to ‘have it all’ is proving an obstacle. The surveys showed agencies providing both traditional and digital services were more under the pump than agencies that offered digital only.

Fifty-five per cent of agencies trying new engagement models agreed that the dynamic between brands and agencies was improving versus 52 per cent of their traditional counterparts.

state-of-relationship

The report suggested that new engagement models might not be the answer to saving these relationships, and rather getting agencies and clients to agree on a value exchange and committing to a stronger investment in each other could be the solution.

What Clients Want

This year’s Digital Outlook Study revealed a greater imbalance between the skill sets that clients and agencies believe bring the most value to their relationship.

To compare year-on-year trends, the study asked both clients and agencies to rank the areas of expertise they thought were most valuable for client organisations.

On a scale from one to nine, both parties ranked what they valued most in their relationship with each other:

info-client-wantClients rank strategic leadership and marketing creativity in their top two —which agencies also agree are the same level of importance.

But apart from that, priorities remain very different. Last year, clients and agencies aligned on five of the seven skillsets, while this year shows only four out of nine.

Clients want customer-focused strategy and creativity, as well as project management and measurement.

Agencies give more attention to becoming experts on emerging trends and technology, but the most interesting bit was the gap between customer-centric marketing. Clients rank this the third most valuable skill an agency can offer. Agencies rank it sixth.

The report concluded that this was a key area the partners need to agree on, because unfortunately, client satisfaction levels with agencies hover around average at best.

The report suggests, “Agencies, specifically ones with B2B expertise, should seize this opportunity to build stronger practices around specific areas rather than spread themselves thin trying to do a little bit of everything”.

“We found a general feeling of “blah” from our client respondents regardless of the service. We did, however, see pockets of difference based on the type of client respondent.

“Most notably, B2B marketers were the most dissatisfied (when compared to their B2C and B2B2C counterparts) with their agencies’ abilities in strategy, digital products, and customer insights. This represents an opportunity for agencies with expertise in these areas and B2B marketing.

“User experience, content, and app development received the lowest marks from all marketers.”

When looking at organisational structure, SoDA asked both clients and agencies for their opinion on clients’ organisational structure and whether those structures facilitate or hinder their ability to innovate and spur positive change.

Clients believe their company’s structure facilitates its ability to innovate 48 per cent of the time, with only 29 per cent of its structure potentially hindering innovation.

From the agency side, the notion that client structures hinder creativity hit 55 per cent, up from 44 per cent in 2015.