Agencies flourish despite market uncertainty
Paul Snell reveals the stand-out findings from this year’s annual B2B Agencies Benchmarking Report, which quizzes industry players for their views on the market
The overarching finding from this year’s Agencies Benchmarking Report is that B2B agencies have had another year of strong performance, despite darkening clouds on the horizon.
The average UK gross income of B2B agencies saw consecutive double-digit growth, rising by 14% to £5,475,964. In addition, the average UK gross income per agency rose by 27%, which will have been boosted by a healthy rise in the number of new entrants to this year’s league table. The average headcount was also up slightly from 75 in 2016 to 80 this year.
However, for the first time in four years, the number of agencies that deem the current market as challenging has hit double figures, rising to 13%. While still a comparatively low number, this is a significant increase on the previous three years, during which it has hovered around 3–4%.
Agencies find themselves buffeted by twin winds. As we explain in the B2B Agencies Benchmarking Report, client expectations have changed significantly over the past few years, and this could be the first indication of their impact on agencies. In addition, we know many clients are using the continued economic uncertainty to fundamentally review their relationship with agencies and ensure they are future-proofed. As a result, many are terminating long-standing relationships, or at least forcing agencies to compete for business.
Yet, it should be pointed out that almost half still described market conditions as good, a similar proportion to last year’s findings. A further 31% reported they were strong, up 5% on the previous year. This demonstrates that agencies, on the whole, remain positive about the circumstances.
The usual frustrations
Slow approval processes, too much inward focus and the lack of a clear brief – agencies’ frustrations with clients had a familiar ring to them as ever.
Too short-term a focus was another widely expressed complaint, but many agencies refused to put the blame on clients – recognising they too are at the mercy of current tough market conditions.
“Clients are under such pressure to work tactically and not given proper time to develop work that’ll benefit the brand in the long-term,” said one. “Is it their fault? No, it simply reflects the pressures they face in their own organisations. However, the outcome is the work, in the short-term, is less robust, creative and effective, and often needs to be redone as a result.”
Another said: “[The biggest frustration is] being tasked to deliver long-term goals against short-term campaign KPIs. Marketing teams are all too aware of the need to develop brand awareness and credibility, but are often pressured to deliver against short-term CPA goals that stifle any long-term growth opportunities.”
This is an abridged version of an article in The B2B Marketing Agencies Benchmarking Report 2018. Download the full report here to read the article in full and for more topical analysis from the industry.
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