Marketing executives on the client side have a less sunny view of the economy than agency leaders, says a new survey from RSW/US.
Fifty-seven percent of agency honchos polled believe that the worst of the recession is behind them, compared to just 43 percent of client execs. Indeed, the majority of the client execs—58 percent—either don’t think the economy has bottomed out yet or aren’t sure. And, of course, their companies control the purse strings, when it comes to paying agencies or buying media time.
“If I were to counsel agencies, I’d say, ‘Hey, things are definitely looking better but maybe not as bright and rosy’” as they see it, said Mark Sneider, president of RSW/US, a Cincinnati-based consultancy that works for agencies and clients.
A total of 121 client marketing leaders and 113 agency principals participated in the survey, which RSW/US conducted online in early December. The marketer sample represented companies such as Kraft, Ford, Novartis, Nike and Volkswagen, while the agency group included JWT, Leo Burnett, Momentum and Hill & Knowlton.
A similar dichotomy between agency and client outlooks arose in questions about hiring and spending in 2011.
Sixty percent of the agency respondents expect their clients to spend “somewhat” or “significantly” more next year, compared to just 44 percent of client respondents. The remainder of each group thinks spending will be flat or down.
On the hiring front, only about a third of clients (31 percent) envision their companies’ headcounts to grow next year, in stark contrast to almost two-thirds (63 percent) of agencies.
Looking back on 2010, agencies and clients confirmed what many already suspected: that clients are shifting more marketing dollars into social media, e-mail and mobile marketing.
The two groups also agreed that fee erosion remains a major issue, with 85 percent of the clients and 80 percent of the agencies saying that the fees that clients pay their agencies are flat to down. And while RSW/US didn’t ask about fee plans for next year, Sneider expects the trend to continue at the expense of agency profit margins.
“Agencies have seen their margins erode year over year for the last five years,” Sneider said. “I don’t think any agencies necessarily think that’s going to change rolling into next year.”