Clients expect more agency changes as insourcing is on the rise

Agency listings are in an era of constant change, with the majority of multinational advertisers already changing or planning to reform current structures to work with external partners, according to new research from the World Federation of Advertisers and the International Observatory. .

Following challenges such as the global pandemic and the exponential rise of digital, combined with increased pressure in areas such as sustainability, diversity and inclusion, 75% of large multinationals said they were ” somewhat satisfied” or less with their current agency list structure.

Almost seven in 10 (69%) had recently made or were planning to make changes to reflect the new world order and their desire for a different structure. Only 25% of respondents were “very” or “extremely” satisfied with their current arrangements.

80% of respondents now have an in-house agency of some form, up from 57% in 2020, and a further 13% say they are considering starting one. This change will not only alter the scopes of agency activity, but will also require additional attention to work processes to ensure effective collaboration between external agencies and internal teams.

Previous WFA research in this area conducted in 2018 found that large multinationals recognized that their roster setup did not sufficiently meet their needs, awarding them an average of only 5.7/10. New challenges over the past four years, such as rapidly changing consumer behavior and the digital revolution, have reinforced the need for new provisions.

The 2018 survey also found that 60% of clients were looking to reduce the number of agencies on their list. Effectively managing multiple agencies requires time and resources from the marketing function.

The new data reveals that in 2022, respondents most often work with 1 in 25 agencies across all marketing disciplines, both globally (67%) and regionally (71%), aided by more great centralization of meetings with partners.

“There are many reasons why the lists need to be updated. Sometimes existing structures don’t work due to internal issues on the advertiser side. However, the accelerating pace of change in consumer behavior and digital usage makes it highly likely that most listings are heading into a period of constant evolution as brands look for new ways to be more effective in their marketing communications,” said WFA senior manager global marketing services Julia Kraft.

The results are based on responses from 32 advertiser companies in nine different industries. All respondents were senior managers responsible for managing the agency, with 81% in a global role, with the remainder having regional responsibilities. Total annual spending by respondents was over $55 billion.

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