What's Wrong with UK Ad Agencies? - eMarketer
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What's Wrong with UK Ad Agencies?

Advertisers look for more speed and agility

March 23, 2017

A major trend among brands worldwide is the desire to optimize the ad agency relationship. A new study of UK brands quantifies that trend. UK advertiser advocacy group ISBA – the Voice of British Advertisers and on-site agency specialist Oliver found that 62% of advertisers are “shifting toward stronger relationships with fewer suppliers.”

One big reason is that advertisers say they need their agencies to be faster and nimbler.

For many brands in the study, that meant wanting an agency presence on-site (45%) or the creation of an in-house ad team (44%).

Data on how many brands have actually made this move are scarce. But recent years have seen several large UK media brands develop in-house agencies, including the BBC (BBC StoryWorks), Channel 4 (4creative) and News UK (Pulse Creative).

The ISBA canvassed 85 of its members—half of whom spent more than £30 million ($40.5 million) on advertising annually—between December 2016 and February 2017.

In addition to speed, those polled pointed to a need for closer collaboration, deeper sector knowledge, and greater data confidentiality and transparency as content requirements increase across marketing channels.

But survey respondents specifically mentioned lack of speed as a reason they are losing confidence in external agencies, with 68% expressing frustration with the time it took external agencies to make decisions or turn around briefs.

For on-site and in-house agencies, the proportion dropped to 8% and 20%, respectively.

“Agility is increasingly a big issue for clients, especially in relation to digital activities,” said Debbie Morrison, director of consultancy and best practice at ISBA. “Adapting to the new demands that marketers have should be a key priority for agencies as they encounter an increasingly competitive market.”

What are advertisers looking for when selecting an on-site agency? In addition to the 86% who mentioned the desire for speed and agility, respondents using on-site agencies cited the improved cost efficiencies (68%), collaboration (64%) and operational control (54%) that comes from working in the same building as advantages. Additional benefits were the institutional knowledge (21%) and strategic capabilities (21%) agencies offer.

For most respondents (54%), on-site agencies were used on a project-by-project basis.

And what were the reasons brands listed for creating an in-house ad team? They included improved brand expertise (61%), collaboration (52%), operational control (55%) and creative expertise (33%).

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