Fournaise: 78% of CEOs Say Ad & Media Agencies Are Not Performance-Driven Enough

LONDON – 78% of CEOs around the world believe Ad & Media Agencies are not performance-driven enough and do not focus enough on helping to generate the (real and P&L-quantifiable) business results they expect their Marketing departments to deliver.

“will smile, nod and will continue doing what they’ve been doing best: constantly tracking their creative/media performance and delivering (real and P&L-quantifiable) business results for their clients, week in, week out”

That’s one of the findings tracked by The Fournaise Marketing Group – one of the world’s leading All-Media Marketing Performance Measurement & Management (MPM) companies – through its 2013 Global Marketing Effectiveness Program in which it regularly interviews more than 1,200 Large corporation & SMB CEOs and Management (C-Suite) decision-makers in North America, Europe, Asia and Australia.

The hi-quant Program constantly tracks insights from CEOs & Marketers around the world on several aspects of their Marketing Performance & ROI: from what CEOs expect from Marketers to the effectiveness of Marketing strategies implemented, and the perceived role of Ad & Media Agencies in the performance equation.

Fournaise had already tracked and reported on the fact that the vast majority of CEOs do not trust Marketers and think Marketers lack business credibility – unless they are ROI Marketers®.

Along the same lines, Fournaise tracked that CEOs have 4 similar issues towards Ad & Media Agencies:

1) 76% of CEOs feel Ad & Media Agencies are not business-pragmatic enough, are too inward-looking, talk too much about “creativity as the saviour” without really being able to unquestionably prove or quantify it, and are often too opportunistic.

Indeed these CEOs view agencies as often being too quick to claim credit for business results that they were not able to unquestionably prove came directly from what they created (such as attributing year-on-year sales growth to their creative/media activities when in fact growth came from product, sales force, channel, pricing and/or operation factors);

2) 74% of CEOs think Ad & Media Agencies are too disconnected from the short- and medium-term business realities: they keep on talking about “giving time to creativity to see the impact” and fail to truly understand the type of Shareholder/Board pressures the Management is facing;

3) CEOs admitted they initially assumed (at the start of their Management careers) that Ad & Media Agencies were the ultimate specialists when it comes to understanding customers and target audience’s behaviours, and to knowing how to best engage with them: however, 72% of these CEOs admitted they soon realised Ad & Media Agencies were not as data- and science-driven as they had expected, relied too much on gut-feelings, hearsay, wrong methodologies and questionable information – greatly reducing the trust these CEOs have in these agencies;

4) 70% of CEOs feel Ad & Media Agencies too often hide behind technicalities such as not having enough budget or not being paid fast enough as a way to justify their inability to deliver the (real and P&L-quantifiable) business results expected of them.

On the bright side Fournaise also tracked that this trend could be reversed: for 89% of CEOs, Ad & Media Agencies could take a bigger seat at the trust and performance table if they were willing to move to a “Payment-By-Result” (PBR) Model – naturally forcing them to cut the fluff and to become the business and demand generator partners CEOs expect of them in the first place.

“CEOs have been telling us there are 2 types of Ad & Media Agencies: those who are truly performance-driven (and can be trusted); and those who pretend they are performance-driven (but in reality are not)” said Jerome Fontaine, Global CEO & Chief Tracker of Fournaise.

“Our Marketing Performance Management experience working with Ad & Media Agencies over 20 countries worldwide over the last 14+ years tells us there will be 2 different agency reactions to these CEO insights: the “Pretenders” will attack these findings, will question their accuracy and will make their voice as loud as possible in the media and blogs; the “Performers” will smile, nod and will continue doing what they’ve been doing best: constantly tracking their creative/media performance and delivering (real and P&L-quantifiable) business results for their clients, week in, week out” Fontaine concluded.