AAR Thinks: Opinion Research 2014 “Taking advantage of the upturn in confidence”
Tony Spong and Robin Charney July2014
Introductions
Who are AAR
Who we are
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AAR Thinks: Opinion Research 2014 Background and context The research was undertaken by Colman Parkes Research using
telephone interviews
They spoke with 200 senior management/Heads of teams from clients and agencies in the UK to give an informed, mutual view
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What we’ll cover this morning
Market confidence and looking ahead
Pitches and expectations
Senior challenges and
wish lists
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Time to put your best foot forward?
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How are Marketers feeling?
93% say things picked up for
marketing in 2013
86% say things have picked up for my brand in
2013
74% say things will continue to
pick up for marketing in 2014
Focussing on clients’ overall expectations
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How are Marketers feeling?
90% are more confident in their team’s ability to
perform than 2013
61% believe they have a better
marketing structure in place
for 2014
Focussing on clients’ view on their team and structure
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How are Marketers feeling?
78% agree that marketing is
getting better at demonstrating ROI
to the board
68% say their remit is growing to
be genuinely ‘marketing’ v just
comms
Focussing on clients’ view of their remit
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What are their top challenges?
63% say increase in competition
55% say understanding
consumers’ requirements
53% say low or changing budgets
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Three code question
Q.20. What are the three biggest challenges that you face in marketing your brands?
Base: Total Respondents Clients Only (100)
6%
7%
11%
12%
16%
18%
19%
38%
53%
55%
63%
No time or budget to test new ideas
Understanding emerging channels
Analysing data and information from multiple sources
Getting senior stakeholder buy-in
Understanding which channels work and which…
Working with procurement to an agreed agenda
Managing all agencies to one agenda
Getting the best ideas out of agencies
Low budgets/changing budgets
Understanding consumers' requirements
Increase in competition
Client Side
Biggest Challenges Currently Facing Clients Total Results
And the agencies top challenges are exactly the same
72% claim more competition
49% downward pressure on
margins
3rd was challenge of managing talent -
45% recruiting new and 40% retaining
experience
Interestingly – only 6% state lack of
new biz – and they could tick multiple
options
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Three code question
Q.17a. What are the three biggest challenges your agency is currently facing?
Base: Total Respondents Agencies Only (100)
0%
1%
6%
9%
11%
11%
13%
17%
19%
40%
45%
49%
72%
Unrealistic commercial agreements
Increased workload compared to scope of work
Lack of new business
Keeping up with change/developments in the industry
Resourcing new business
Cost/frequency of incumbent pitching
Increases in operational costs
Recruiting senior people
Recruiting specialist skills
Retaining experienced staff
Recruiting talent
Pressure on profit margins
Increase in competition
Agency Side
Biggest Challenges Currently Facing Agencies Total Results
The budget perspective is very encouraging
Only 8% of Clients state their budget for 2014 is less than in 2013
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60%
32%
8%
0%
More than 2013 Same as in 2013 Less than 2013 Don’t know
For the 60% of clients who are spending more
It’s a mixed plan but, interestingly, 80% will be adding capability and 70% capacity, which sounds positive for new and organic business development
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42%
46%
66%
70%
74%
80%
Undertake more agency-type work in-house
Make structural changes that will enable us tobetter manage the agency roster
Switch to more project-based agreements
Add additional capacity to my existing agencyroster
Switch to more retained-based agreements
Add additional capability to my existing agencyroster
For those looking to spend the same or less A different slant, with the opportunity to demonstrate the value of tenure and efficiency for existing relationships
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40%
48%
58%
62%
68%
70%
72%
75%
Consolidate my existing agency roster
Undertake more agency-type work in-house
Reduce size of the agency roster
Negotiate agency fees
Extend contracts with existing agencies ratherthan going to the market
Switch to more retained-based agreements
Increase my agencies' accountability for ROI
Switch to more project-based agreements
Has any of this hit the market yet?
This is the agency view of what they are seeing so far
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60%
32%
8%
0%
More work, samescope
More work,extended scope
Neither Don’t know
Although, interestingly, agency competition is the “client”
“It’s how we want to evolve as a company, to have a
more centralised approach to our work. Also it keeps all our ideas in one place” - Client
view
“We are looking to develop our own talent and do new things internally while doing more traditional work outside with agencies” – Client view
“Clients spend can be quite high, so I guess they see significant ROI in the long
run by investing more internally” – Agency view
“Clients are spending more for sure but they are keeping
some of it in-house from a strategic point of view and
we are just getting the tactical stuff” – Agency view
These were some of the quotes when probed further
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More new business opportunities in 2014/15?
The research says ‘yes’… We asked clients how many new agencies they were expecting to add to their roster in 2014/15
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7%
26%
50%
14%
3% 0%
None One Two Three Four Five or more
Converting to Win – Need to know
From the clients’ perspective, these are the main ways agencies let themselves down during the pitch
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58%
60%
62%
62%
68%
72%
75%
80%
Wasting time playing the entire brief back to us
Missing the brief entirely
Ideas poorly thought through
Senior people talking too much
Lack of enthusiasm
Asking the wrong questions
Poorly presented ideas
Not fully understanding mychallenge/opportunity
Converting to Win – Need to know
From the clients’ perspective, these are the main ways agencies let themselves down during the pitch
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41%
43%
48%
49%
51%
55%
57%
58%
Asking no questions
Lack of demonstrated interestin our existing agency roster
Inability to answer ourquestions
Not bringing the core team tothe pitch
Poor time management
Missing key sections of thebrief
Using obvious templates nottailored to us
Unable to convert insight intothinking/ideas
And finally – the wish list?
29% of clients would like to see more innovation from agencies
16% of clients would like to see more flexibility
13% of clients would like to see
better ideas
52% of agencies would like clients to be more open minded to ideas
21% would like clients to
respond faster to proposals
13% would like clients to be
better at strategic planning
We asked clients and agencies what the one thing they wanted from each other was and grouped the replies
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Final thoughts?
What’s enlightening or surprising? What confirmed your thoughts? Next steps?
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Thank you for coming
All feedback gratefully received