Client defection slams big agencies
Dana Maiman, CEO, Draftfcb New York
Global agency Draftfcb has for two years struggled under the burden of a handful of major client defections, including the Homewood Suites' by Hilton hotel business, State Farm's TV creative, and several Kraft Food brands, most recently Gevalia at the end of October.
The embattled agency is, however, hardly alone in its CRM struggle. Another major agency, Gotham, recently lost its account with Chobani, which in late October selected Leo Burnett Worldwide as its new agency of record (AOR).
Economic pressures on marketers are trickling down to their agencies, while clients with tightening budgets still demand clear, fast results from their campaigns, said Dana Maiman, CEO of Draftfcb New York and president and CEO of Draftfcb Healthcare. "They're looking for results," she said. "Companies are relying on a lot of these brands to carry slimmer pipelines."
As a result, agency loyalty has moved toward the bottom of marketers' list of concerns. Reviews seem to be becoming more frequent. As defections by major brands have become increasingly common, an emphasis on analytics and integration as a means for retaining important clients is key, Maiman said.
Draft is using its analytics offerings to achieve this, she said. In September, the agency hired Paula Fedoris as EVP and chief analytics officer and Sara Bamber as chief strategy officer for its New York office as part of a broader renewed focus on analytics. Gotham's strategy may differ. The agency did not return requests for comment by press time.
However, will efforts such as Draft's analytics focus be successful in a landscape where even the largest agencies are readily losing longtime accounts?
"Some of these corporations are turning over their agencies twice in two years, and I've never seen it at that speed before," said Jonathan Sackett, chief digital officer and managing director of DDB Chicago. "You want to make sure you're saying, 'Let's take a hard look at this and test it properly — did it work, did it not work, and why?' Not, 'Well, that didn't work, the agency's no good.'"
Avi Dan, founder and president of Avidan Strategies, a marketing consultancy, said his firm recently surveyed 989 CMOs and senior marketing executives and found that two thirds of respondents expect to see an uptick in agency reviews over the next year.
In some cases, brands seem to be following a trend of consolidating various marketing duties into fewer shops.
ExxonMobil Corp.'s global review of its creative and media is such an example, as is Mars Directs' consolidation of creative duties for its global brands to BBDO and DDB, splitting with TBWA\Chiat\Day and SapientNitro. In addition, at the end of October, Marriott International selected WPP's MEC as its global AOR for media buying and planning after a review aimed at consolidating its media accounts.