How Brands and Agencies Are Navigating Relationships During—and Coming Out of—the Pandemic
Adweek partnered with Harris Poll to survey Mediaweek attendees on the latest industry trends.
While the past year was far from typical, the way that brands shifted spending during the Covid-19 pandemic and ensuing economic downturn offers some insight into how they manage during crisis—and what trends can be expected during recovery.
In the lead up to Mediaweek this week, Adweek worked with Harris Poll to conduct a survey around agency and brand relationships, what changed in the past year and how marketers are approaching advertising in a post-cookie world.
A pandemic wave of in-housing?
Based on a survey of 83 Mediaweek attendees, 48% said that they had a client terminate an agency relationship in the past year, and 45% said they had a client bring digital advertising or marketing services in-house over the past year.
And while only 14% said those actions were directly related to the business impact of Covid-19, respondents said that the number one challenge in maintaining agency-client relationships was a difficulty in proving return on investment—something they say has intensified over the past year.
Of agency professionals who responded to the survey, 81% said at least half of all client goals are currently tied to ROI metrics like sales leads, clicks or conversions, compared to 71% one year ago.
But given the past year, it’s hard to know whether that spells a broader trend. Agency m/Six CEO Belinda Smith said that renewed focus on ROI was likely a result of a pandemic panic fueling decision-making in an uncertain and quickly changing environment. “People had to quadruple down on digital distribution channels, whether they were ready for it or not,” Smith said. “Moving that much of your business digital that fast, you have to focus on ROI, because that’s the only way you learn how to create the best experiences in that channel.”
Moving forward, though, Smith expects brands will find they need both the big-picture brand-building and specialized expertise that’s hard to maintain in an in-house team.
Josh Palau, chief media and activation officer at media agency PHD USA, said the reality of in-housing can mean an opportunity for agencies to better tailor their offerings to meet client needs. “While the rate at which it is expanding may ebb and flow, in-housing is here to stay,” Palau said. “For agencies, that means evolving our service model to offer clients solutions that balance the value of agency representation with the perceived benefits of process ownership.”
Adapting to consumer behavior changes
For Anheuser-Busch, which launched in-house agency DraftLine in 2018, in-house capabilities benefited the world’s largest brewer during the pandemic—but it still has strong working relationships with outside agencies like Wieden+Kennedy.
A strong majority (81%) of agency professionals surveyed said clients have shifted budgets or team resources to account for changes in media buying in the past year. But, according to Paolo Provinciali, head of U.S. media at Anheuser-Busch, that was sorely needed as consumer behaviors and habits were upended by the pandemic.
“Our media strategy follows a people-first approach, and as we see consumer behavior changing, we adapt our tactics,” Provinciali said.
“In the past year, we have seen fewer people commuting and the need of greater flexibility, so we have shifted some of our traditional OOH buys to digital OOH to allow for more agility, targeting and contextual relevance. Similarly, we have seen people watching less TV and streaming more, so we have increased our focus on CTV and digital video.”
The post-cookie world remains a foggy one
Less than a third of respondents (30%) said they have a “very clear” understanding of the impact of third-party cookie deprecation.
That’s “unsurprising,” said Ben Hovaness, svp of marketplace intelligence for Omnicom Media Group North America. “It’s a technically complex topic that touches many areas of media, including planning, investment and measurement.” To address that education gap, Omnicom launched an education series for clients around the topic to help them better navigate the new landscape.
As a result of cookie deprecation, 57% reported using the “walled gardens” of Facebook and Google more often in the past year, and 54% said they’ve used first-party user data more.
The opportunities post-cookie
Still, the death of the cookie offers an opportunity for marketers, according to Dave Gaines, cofounder and CEO of Media by Mother.
“Cookies made everyone lazy. Money is thrown into the internet and we allow a piece of code to tell us where it should go. Half of an adult’s digital time is spent in apps and they never had cookies,” said Gaines.
“Yes, walled gardens, differing identity types and questions around how much cooperation across the industry make it hard to predict what will be the next third party solution to commit to,” he added.
“But the interim solution is for marketing teams to make the generation of first-party data a bigger part of advertising activity, rather than relying on cost-per-action ads. A bit of effort, iterative learning and some math and statistics, and we may all just find we don’t really need the next universal ID as much as we thought we did.”
Moving forward, shifting to first-party data will only serve brands well considering current trends in favor of ecommerce, according to James Townsend, global CEO of ForwardPMX.
“A performance approach that puts customers and first-party data at the heart will enable better experiences that can drive positive brand sentiment and set businesses up for success coming out of COVID,” he said.
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