Forrester: Clients Believe Shops 'Unprepared'

February 27, 2007
By Kathleen Sampey

NEW YORK Clients view traditional ad agencies as being particularly unprepared to understand the changing ways consumers use media and technology, according to a new survey conducted by Forrester Research.

Still, of the agency executives surveyed, 93 percent of them thought their efforts "drive their clients' marketing success," while just 63 percent of the marketing executives contacted agreed, the survey revealed.

The company surveyed 141 executives on the agency and client sides to gauge perceptions on various aspects of the relationship.

The findings revealed divergent points of view between the two parties, with agencies overestimating their value in helping clients achieve their business goals.

The gap in perception was most pronounced when each side was asked how equipped the ad agencies were in dealing with changes in Internet advertising and consumer behavior. About 95 percent of agencies thought that they were well positioned to adapt to changes in Internet advertising while only 45 percent of clients agreed.

Less than 60 percent of clients thought agencies could help them deal with changes in consumer behavior while 80 percent of agencies thought they were well prepared to do so.

The report also cited a role reversal of sorts between so-called "traditional" agencies and digital shops. The latter saw a spike in demand during the dot-com bubble from 1999-2001 as clients scrambled to develop Web sites for their brands.

They have since seen resurgence as clients are shifting more dollars towards digital shops, with some, such as Agency.com and AKQA, doing TV ads for Ikea and Yell.com, respectively.

Interactive and digital advertising was the area for which most clients sought specialty agencies, the report said. Social media and ethnic marketing were the areas in which outside specialists were least sought by clients.

Of the survey participants, only 15 percent said their agency compensation was tied to business results. When those who did not have such an arrangement were asked why, 43 percent said they never considered it while 36 percent reported it would be too difficult to truly measure the results.

The results were summarized in a report titled, "Help Wanted: 21st Century Agency."