- Diversity takes a backseat: Troublingly, marketers collectively ranked “commitment to diversity in key roles” lowest on the list of factors they consider during reviews. Only 14% of all marketers prioritized it, compared to the 62% who prioritize cost. Respondents in procurement roles specifically cared little for diversity: A meager 7% prioritized it relative to other factors.
- Both sides make staffing adjustments: Marketers and agencies alike add or subtract from their headcounts during reviews. Of agency-based survey respondents, 61% said incumbent account reviews led to staffing changes. One third of client respondents said they experienced similar changes when reviewing a new agency. That number dropped to a quarter for marketers reviewing an existing agency.
Forrester’s take
In May, Forrester principal analyst Jay Pattisall released similar research. The analyst urged brands and agencies alike to “ditch the pitch.” Agencies spend a collective $12.46 billion on pitching every year, Pattisall estimated. The number came close to Publicis Groupe’s 2022 revenue, which was $13.5 billion.
This explains why agency costs run higher than marketers would like, Pattisall told Adweek in May. “The monies that are being paid to agencies in fees are, in fact, what are subsidizing excessive new business,” he said.
The state of pitching doesn’t benefit anyone involved.
Incumbent agencies historically struggled to retain business. In 2021, only 15% of defending agencies retained business, according to R3 data. The fear of losing, combined with the cost of defending, explains why incumbent agencies are reluctant to re-pitch. A quarter of them decline to defend their positions, according to the trade groups’ new research, even though 54% suffered a major to moderate impact from resigning the account.
The new research indicates changing tides, since incumbent agencies are more successful than R3 data indicated a few years ago. Trade organization survey respondents on average retained their incumbent agency every two out of three reviews. This is theoretically good news for incumbents, but does nothing to mitigate ballooning review costs for either party. Marketing leaders must ask themselves if a review is still worth doing, assuming they retain current partners.
Is it worth it?
Marketers often launch agency reviews with the aim of reducing costs—never mind how review costs impact the bottom line.
