IPA chief hits back at report slamming agency effectiveness

The IPA has hit back at a “disappointing” report citing the lack of trust CEOs place in marketing agencies, claiming many commercial leaders are “firm advocates” of the creative end of commerce. 

John Lewis 2012 Christmas ad
IPA president Ian Priest says John Lewis’ strategy highlights the value of commercial creativity.

The Fournaise Marketing Group 2013 Global Marketing Effectiveness Program Report – which claims 78 per cent of CEOs believe agencies are not ROI driven and talk too much about “creativity as the saviour” – has sparked a fierce debate amongst marketers on the Marketing Week website and social media.

Ian Priest, IPA president and international managing director of Chime Communications, says the trade body’s own effectiveness Databank – which holds more than 1,000 case studies – and IPA Effectiveness Grand Prix winner John Lewis’ “making the nation cry and buy” advertising strategy, which the retailer claims has generated £1.074bn in incremental sales and £261m of incremental profit, proves “beyond reasonable doubt” that commercial creativity works.

In Priest’s inaugural speech as IPA president, he announced the trade body’s “ADAPT” agenda which aims to build agencies’ commercial creativity credentials by involving clients more in how the marketing industry needs to keep evolving to ensure the value of commercial creativity remains at the centre of their work. The IPA created its first client council as part of the new strategy.

In direct response to the Fournaise report, Priest adds: “As an industry working alongside our marketing clients, it is very disappointing to read this report as the IPA has been leading the world in proving that advertising creativity works since 1980 and many CEOs are firm advocates of our position at the creative end of commerce.

“Because for all the challenges that exist right now, we must never lose sight of the fact that what we do can – and often does – transform the businesses of our clients and helps build our position in the UK as a centre for world class advertising.”

A separate report from The Advertising Association and Deloitte earlier this year, found the £16bn spent on advertising UK generated £100bn for the UK economy, which Priest says is “another great ROI” for CEOs to consider.

The disconnect between the metrics which CEOs focus on and those delivered by agencies is “inevitable”, according to CIM associate director of research Thomas Brown, but he says agencies are usually only accountable for part of the mix – as to say this is like “judging a car’s performance on how good the tyres are”.

He adds: “If CEOS and marketing teams are to work effectively together, they need to speak the same language – and sheep-dipping marketers with ‘finance for non-finance managers’ isn’t the solution.

“This requires marketers – whether from agencies or in-house – to turn their attention outwards, away from the creative and campaigns and towards corporate objectives and financial metrics. It also needs the education of the CEO and CFO in the value of focusing on customers and human decisions rather than just the numbers.”

At the other end of the scale, Debbie Morrison, ISBA’s director of consultancy and best practice, says the level of trust advertisers have towards their agencies is at its “lowest ebb” in the 16 years it has been tracking this sentiment.

She adds: “The inert economy has made businesses more inclined to harden their commercial positions, just look at the number of companies extending their business terms. They want more effect and more efficiency, and even greater ROI from their budgets in this highly fragmented, multi-channel world where the consumer is more elusive.”

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