Digiday Research: Why clients leave their agencies
Like any normal relationship, the ones shared between clients and agencies aren’t always meant to last. While a number of contributing factors can cause a client to leave their agency, failure to deliver effective campaigns is the most common reason why things fall apart.
When asked why they have ended a relationship with an agency, 77% of 73 client-side marketers said underperforming or low-quality campaigns was a key reason why in a survey by Digiday this April of client-side executives responsible for their company’s agencies relationships.
Other issues like disparate cultural identities and cost-cutting also played a role for some. Forty-five percent of respondents said they left agencies for a cheaper alternative while a quarter did so because they felt the agency’s culture was not properly aligned with theirs.
Meanwhile, growing scrutiny over contracts and agency billing and hidden fees is enough for clients to make a change. Twenty-six percent of marketers ended agency work due to hidden fees 29% due to overbilling.
“When managed well, with regular performance evaluations, any performance issues can be flagged in advance before they become an irreparable problem. And clear expectations and actions for course correction can be set and aligned between the client and agency,” said Stephan Schwarz, a consultant at ID Comms.
Additional problems, like overbilling and hidden fees, while popular subjects at the moment, are likely to become less of an issue over time.
“Transparency between clients and agencies is becoming much less of an issue,” said Graham Brown, co-founder of MediaSense. “Clients are increasingly taking on the mantle of governance regarding their contracts and are being more judicious about the terms in them,” he added.
But those issues are unlikely to disappear entirely according to Avi Dan, a consultant that helps clients with agency reviews.
“Clients are the ones writing the contracts. Holding companies have a small army of lawyers but the one or two lawyers on the client-side are not typically specialists in media,” he said. “There is a tremendous pressure on the client to reduce costs. Media is a very clear way of going about it.”
There are also less-discussed reasons such as high turnover within agencies for why clients search for new partners.
“Constant changes in agency personnel assigned to the account mean inefficiencies as clients end up paying for new employees to learn the nuances of the client’s scope of work,” said Lorraine Stewart, founder and chief executive officer of Rojek Consulting Group.
‘I’m worried about my job’: Confessions of a stressed out ACD on homeschooling his son and working from home
An associate creative director is stressed about overseeing his son's remote learning this fall while successfully meeting client needs.
‘No one is rushing to commit Q4 budgets’: With its future in the U.S. increasingly uncertain, media buyers are holding back spending on TikTok
The executive order signed late last week has now spurred advertisers who were considering testing the nascent platform to steer clear for the time being, especially since TikTok now has until September 20th to sell its U.S. operations or face the consequences of President Trump’s order.
Member Exclusive‘Like being conned’: Agency employees say that fake job listings are making the already difficult job market even harder
If you ask agency talent about the job search you’ll hear them bemoan alleged fake job postings as an industry scourge.
SponsoredPublishers are creating new risk protections to guarantee vendor payments
As the industry navigates the continued impacts of COVID-19, here’s the questions publishers should ask their programmatic partners or ad management providers to protect themselves from clawbacks and lost revenue.
WTF is redirect tracking?
Redirect tracking offers an alternative to the third-party cookie, which is why web browsers are clamping down on it.
‘Let’s put it out in the world’: Why Code and Theory is creating its own thought leadership publication, Decode
The publication gives the agency a home for opinion and thought leadership pieces from its staffers, many of whom have been writing pieces for industry publications in recent years.