Down to earth: the 11th Marketing Week Agency Reputations Survey

There are some surprises in the 11th Marketing Week Agency Reputations Survey, including AMV’s stumble from grace and WWAV’s dramatic first-time entrance into the top ten. One theme pervading the survey is that marketers seem to be losing fait

Advertising agencies have been compared to fashionable restaurants. When a celebrated chef leaves, the restaurant loses much of its cachet, and may lose customers as well, unless it can replace the star with a figure of equal standing.

In the same way, ad agencies are often judged on the good name of their creative director and the departure of a respected figure can have a destabilising effect on the agency’s reputation.

Abbott Mead Vickers.BBDO, regarded as one of the most fashionable agencies in town, has had to cope over the past year with the departure of founding creative partner David Abbott, referred to reverentially as the high priest of advertising, who retired in October last year.

The agency’s top executives – chairman Michael Baulk and chief executive Andrew Robertson – will be carefully gleaning the results of Marketing Week’s 11th Agency Reputations Survey to see how his departure has affected marketing directors’ perceptions of AMV.

The agency is still rated as one of the three most creative in the UK. But in overall rankings, it has slipped from the second best rated agency last year to fourth this year. It has dropped one or two places across almost all criteria and has suffered the greatest loss of mentions from marketing directors of any agency in the top 25.

Still, AMV is not alone in seeing its image dented among those who really count – the marketing directors of the 400 UK companies which spend most on advertising. J Walter Thompson is still the most highly-rated agency in the country, as it has been in nine of the 11 Marketing Week Agency Reputations Surveys. But this year, its hold on the top spot has loosened, and in creativity it has plummeted from fifth most mentioned agency to equal ninth.

In fact, every top ten advertising agency has seen a decline in marketing directors’ perceptions, apart from BMP DDB and the newly merged Rainey Kelly Campbell Roalfe/Y&R.

Meanwhile, direct marketing agency WWAV Rapp Collins has made a dramatic first-time entrance into the top ten. Last year, it did not even make the Top 50 and it has never before gained a position higher than 30.

Researcher Sarah Horack from Consensus Research, which carried out the survey, says: “WWAV has vaulted into the upper reaches of the top 25 table, based on its direct marketing skills. This is the second kind of functional specialist to reach the top ten, making WWAV a little like the first of the media specialists we saw entering the lists in 1991.”

She adds: “But media skills are explicitly recognised by a criterion that is a component of the overall standing of agencies, media planning, buying and placement. Without a specialist’s criterion on which to hoist its reputation, WWAV has done well on five of the nine criteria, including value for money. Is this, therefore, another case of specialists challenging the generalists for turf and the reputations that can be built upon, or is it a former specialist broadening its appeal and challenging as a generalist?

“At the same time, the media specialists have shed points that they had built up for non-core skills outside media planing, buying and placement. Media specialists appear to be retreating to the role of specialists, dominant for excellence in their field, having seized this turf from the ‘full service’ agencies.”

These shifts come as clients look beyond advertising agencies to promote their products, and stress the growing importance of closely targeting consumers, as opposed to the scattergun approach of big spending ad campaigns. The decline in scores for so many top agencies is worrying for advertising bosses, as this year’s results could be the first sign that marketers are beginning to lose faith in their ability to promote products. But Horack says it will be necessary to look at next year’s survey to determine whether this really is a long-term trend.

AMV has over the years built up one of the most impressive clients bases in the industry, but has started to see a slight downturn in its fortunes. It lost the bulk of its Sainsbury’s work – some &£20m of billings – after its John Cleese campaign was widely derided. It faces concerns over its Volvo account, after the Swedish car giant was swallowed by Ford, which uses Young & Rubicam and WPP agencies. It had to fight to retain British Telecom work after a statutory review, though it managed to keep the bulk of the business. It has, however, created strong work on Guinness.

AMV is undisputed leader in the value of its billings, vastly outstripping its nearest rivals. But the fortunes of advertising agencies wax and wane with a frequency alarming to their owners. The difference between success and failure for an agency can be just three phone calls away – being hired or fired by three big spending clients.

The signs in Marketing Week’s survey that AMV is loosing its stranglehold could presage the start of a long-term slide. Or it could be a temporary blip in perceptions brought about by the departure of one of its founders and the ensuing change of management. The coming months should reveal how deeply affected AMV has been.

JWT continues to dominate the overall league table, and people attribute this success partly to its strong brand recognition – rarely achieved by ad agencies. Others are more cynical, and say the agency bombards clients with promotional mail in advance of Marketing Week’s survey. Either way, it has fallen foul of the general trend among marketing directors in down-rating ad agencies. The gap between first and second place agencies is now the closest it has ever been.

BMP’s performance has helped it climb five places overall, from seventh to second place. It has fought its way back after a two-year slump and joins the top three on six of the nine criteria. A string of new business wins includes e-toys, charlottestreet.com, Government pensions work and MD Foods. There have also been high profile losses, such as Sony, but its creativity has been hailed across the world, and its work on Volkswagen widely praised. This year, it is rated the second most creative agency after Bartle Bogle Hegarty and the best value for money – two of the nine criteria that marketing directors rate as most important in the way they view agencies.

McCann-Erickson has cemented its number three position, after winning MasterCard, a slice of Microsoft work and the Deutsche Bank business. It has gained most esteem over the past year, and its next highest performance was in financial stability and strong agency management, where it came second after JWT. Testament, perhaps, to the iron grip of London chairman and chief executive Ben Langdon.

There has been little change among the next four agencies in the top ten, with Ogilvy & Mather holding on to fifth place and BBH slipping one place from sixth to seventh. Competition between the two Saatchi agencies has always been closely watched, but both have suffered in terms of ability to act in clients’ longer-term best interests and Saatchi & Saatchi does not appear in the ideal shortlist top ten.

All round, marketers’ perceptions of agencies have hit a low at a time when agency billings are reported to have reached an all-time high. Some agencies which appear to have performed well in certain categories have excelled merely because their rivals have done so badly.

O&M has slipped out of the top ten altogether on creativity. Its decline in absolute terms on value for money was not as severe as its competitors, so it managed to climb from sixth to fourth equal. The relatively poorer performance of its competitors makes it look good at acting in clients’ longer-term interests and in its coverage of markets outside the UK.

BBH retains the top slot in creativity – a position it has held every year since the survey began, although last year it shared it with AMV. This year, BBH created Flat Eric for Levi’s and the laughing cows for Boddingtons, as well as the new global campaign for Johnnie Walker whisky. Creativity may be the agency’s strong point, but in other categories it has not performed so well – it does not even appear in the top ten on value for money, nor in the quality of account managers, although it is the fourth favourite agency marketers would like to have on a shortlist.

From the summer onwards, the year has been marked by a spate of agency mergers, and more are expected in the new year. In marketers’ minds, perceptions of agencies tend to improve after a merger, perhaps because of the press coverage these deals usually attract.

Young & Rubicam had not achieved a top ten ranking since 1992, but in the wake of its merger with Rainey Kelly Campbell Roalfe, the new agency has gained three places overall, compared with Y&R last year.

Other big mergers came too late to register in the survey. Interpublic Group’s decision to merge Lowe Howard-Spink with Ammirati Puris Lintas seems to have been justified as APL does not appear in any of the top rankings listed. Lowe has fallen three places to 18th equal, although it managed to slightly improve the number of mentions it received.

The combination of D’Arcy and Leo Burnett following the global merger of their parent companies came too late for our study. But as Horack says: “Burnett’s only consistency appears to be its inconsistency.” It has followed a successful year with a mediocre one and dropped out of the top ten on three criteria. The effect of these movements has seen its overall position drop to 21st – an all-time low across the 11 years of the survey. Given this tendency for fluctuations, perhaps next year will see Burnett back in the top ten, a position it last attained in 1996.

In a year of relatively few successes, Euro RSCG Wnek Gosper was the highest climber, rising from joint 23rd – a position it has held for the past three years – to this year’s 11th. While it does not appear among the top performers in creativity, it has entered the top ten in value for money and a number of other categories.

Grey climbed four places to number 13 as it pushes the message that it is no longer grey by nature. St Luke’s received the same number of mentions as last year, although its position dropped four places to 23, and HHCL & Partners fell five to number 20, despite working on some acclaimed brand launches, such as Go and Egg.

The media specialists have had a tougher time than the ad agencies, with Zenith falling four places to number 15. But MediaCom TMB’s merger with The Media Business seems to have had some benefit, giving it 25th position. Horack comments: “Virtually all the media agencies are becoming more dependent on the media planning, buying and placement criteria. Last year, this contributed about 40 per cent of nominations for the top five, but this year, the average is more than 50 per cent.” The focus on media skills as the unique selling point for the specialists has led to a fall in their placing within the overall top 25, and this year Zenith and Carat have both lost ground and are now 15th and 16th respectively.

Many agencies have suffered a decline in perceptions among marketing directors, and if the same trend continues, it will be bad news for ad agencies as custodians of the brand.

WWAV’s appearance in the top ten suggests that marketers are looking to other types of service providers in response to the fragmentation of markets and media, and as costly TV advertising begins to lose its charm.

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