Where agencies see long-term growth: study

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The American Association of Advertising Agencies has recently released its 2014 effectiveness study, looking at the transformation of agencies from the eyes of both the clients and agency partners.

The study pulls out data for media versus creative agencies as well as over-performing agencies, that is those that self-reported a greater than 10% year-over-year growth over the past three years (the report refers to non over-performing agencies as “the rest”).

New agency revenue streams were seen as a top trend for agencies overall (at 28%) but came in dead last for brands, with only 3% of respondents saying it was something that would influence an agency’s future.

However, the secret to long-term growth may be in that new revenue stream, the study found: over-performing agencies were more likely to focus on these new revenue streams, with 35% naming it a top trend that will impact the agency’s future, compared to 24% of “the rest.”

Media agencies placed ROI (60%), big data (68%) and new revenue streams (38%) as most important to long-term growth, echoing these over-performing shops, in their top three trends shaping the face of agencies.

Clients have doubts about agencies’ data and analytic capabilities, with only 35% saying partners have the right data and analytic tools available to measure effectiveness. Media agencies are confident in their ability to lead the way when it comes to big data – with 68% believing their agency has “the tools available to measure effectiveness” and that “big data helps demonstrate the value of creative ideas” (compared to 45% and 46%, respectively at creative shops).

Media agencies are also more aligned with client demand when it comes to measurement, with 52% saying they look at sales or profit levels to determine campaign success (compared to 34% at creative shops). Creatives put the most focus on consumer engagement at 46%.

Brand strategy and brand positioning provided the greatest disparity between media agencies and creative shops, with creative placing more importance on branding than media shops, which placed the bulk of their interest on data insights.

The study polled 725 people (409 agencies, 247 brands) in a quantitative study, and conducted almost 200 qualitative interviews, with largely manager or higher-level employees across a wide swath of industries.

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