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Client/Agency Relationships: Analysis, Research, Facts


The client/agency relationship is an interesting topic.¬† Trying to figure out what makes it tick – which is of course, a Google search for “client agency relationship” – returns over 53 Million Results.¬† Many results talk about the mechanics of the topic, comparing it to a relationship – the courtship, the dating period, exclusivity, the honeymoon phase, and ultimately the separation (or divorce!)¬† Is an emotional, human relationship (since this is an advertising blog, let’s just say C-to-C) a fair analogy for a business relationship?¬† The statistics say “yes.”

In most cases, 30% or more of an agency’s operating budget is applied to internal marketing, brand development, or pitches.¬† Consider this the courtship and dating phase.¬† This number includes salaries, marketing materials, promotional events, “perks” (which often go to clients,) materials for presentations, and non-billable team hours associated with internal marketing.¬† Think that percentage is high?¬† Then start to include the other items that aren’t in that list such as work “in good faith” or work produced at a reduced cost for a client with hopes of building a relationship.¬† All of this plays into winning new clients, keeping existing clients, and building agency visibility to take on bigger accounts.¬† This means that an agency with an operating budget of $1/MM/year spends at least $300,000 on courting and dating.¬† That’s alot of (expensive) dinners and movies!

Once you’ve won the heart of a client, and they’ve won yours, most would think it’s time to ride off into the sunset, right?¬† Sadly, this is most often not the case.¬† As you can imagine, it’s far easier to break off a B-to-B relationship than it is to break off one that is C-to-C.¬† There are a variety of reasons that lead to a split: change in leadership, conflicting opinions on creative, and even budget cuts.¬† There are many sayings and parodies of relationships once they’re off the ground such as “you’re only as good as your last idea” and this classic YouTube clip:¬† On average, a client/agency relationship lasts a period of two-to-four years these days with more relationships trending towards the lower end of the spectrum due to high competition, agency fragmentation, and the economy (specifically client turnover and budgeting.)

Although the golden age of “traditional” advertising as we’re taught to think of it may be behind us, we’re at a turning point in the industry.¬† With this turning point comes great opportunity to get back to basics working together to set and achieve long term goals, building brands, and strengthening relationships.¬† Let’s take this opportunity to turn around some of these statistics and increase the averages to truly work together and build for a better tomorrow.¬† (but don’t worry, we’ll still buy dinner…)

Further Reading…


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