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NEWS: Agency work increasing

Seventy-six per cent of clients and agencies say the volume of work going through agencies is increasing, according to new research by AAR.

This additional activity is being seen most clearly in the transport, energy, retail, financial services and FMCG sectors. Among agencies, a whopping 92 per cent say clients are asking them to take on more work.

Some 77 per cent of clients believed agencies often set an expectation that is rarely delivered on in pitches, while 90 per cent of agencies say this about clients. And, when clients do appoint an agency, many are disappointed afterwards, citing problems such as the ‘agency not costing ideas fully at pitch’, the ‘agency over-promising on their capabilities’ and ‘agencies not foreseeing problems with the ideas pitched’.

The research also showed marketers are more confident this year than in 2013 and are increasing their budgeted marketing spend. Almost all (93 per cent) of clients say things have ‘picked up’ for marketing in 2013 with 74 per cent saying that things will continue to pick up in 2014.

However, marketers still face challenges. The three biggest challenges facing agencies at the moment are an increase in competition (72 per cent), downward pressure on profit margins (49 per cent) and recruiting talent (45 per cent).  

Meanwhile, the three biggest challenges clients face is an increase in competition (63 per cent), understanding consumers’ requirements (55 per cent) and low budgets (53 per cent). 

Kerry Glazer, CEO of AAR, said: “We are gradually emerging from five years of austerity, and consumer confidence and spending power is beginning to return. During a recession, marketing is one of the first budget lines to be cut but when the economy improves, it is one of the first to come back.

“Our study is good news because it shows that marketers are thinking about the right changes to make in response to the increase in consumer confidence. There is, however, still the challenge of obtaining approval for more budget from their board and it’s important to note that while we are seeing pockets of confidence, this is not a UK-wide scenario.”