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The RightSpend x ISBA (Incorporated Society of British Advertisers) Future of Agency Remuneration Survey was conducted to explore the evolving landscape of agency remuneration among UK advertisers. The partnership brought ISBA’s deep knowledge of advertiser needs together with RightSpend’s Marketing Procurement analytics to provide visibility into brand perceptions around agency remuneration, both today and in the future.
The Future of Agency Remuneration Survey gathered responses from ISBA members and senior Marketing Procurement professionals to provide critical insights into how brands are approaching agency compensation models at a time when the marketing landscape is increasingly complex. The survey provides unique perspectives around agency remuneration across five core themes: Value, Influencers, AI, MarTech and Payment by Results (PBR).
As Marketing Procurement teams face increasing pressure across agility, cost, optimization and spend, the Survey’s results offer valuable guidance to help balance Marketing spend while maintaining agency performance.
Agency Relationships: A priority for brands and Marketing Procurement
The marketing landscape continues to feel the pressures of economic complexity, geopolitical conflict and market contractions. Across Marketing, Marketing Procurement and Finance, each team has a different perception and expectations when it comes to the brand’s engagement with agencies in terms of remuneration and value. The Survey highlighted how the majority of brands aren’t feeling as if they are getting value for money from their agencies, and as a result most are evaluating these relationships.
Marketing Procurement is looking for improved visibility and metrics to allow them to better balance remuneration and some of the key areas that emerged within the Survey were: innovation, diversity and value.
Innovation: Is it worth premium agency fees?
There has been a change in how brands perceive, and pay for, innovation. Brands are looking for specialised agency expertise and often agencies can command a premium for these skills, but the survey highlights that there is a shift in spend versus value when it comes to innovation.
Companies willing to pay more, are left with the question – does creative thinking deliver high returns on investment? The Survey tells a story of a changing landscape where Procurement and Marketing prioritise value from innovation but find that paying for the perception of innovation is no longer enough.
Diversity: Is it open for discussion?
Brands recognise the importance of diversity, and they expect agencies to do the same, without them having to pay for the privilege of a diverse agency. Diversity, Equity and Inclusion (DEI) is still a hot topic within the industry, but are brands prepared to pay a premium for an agency that invests in DEI?
It’s clear, agencies need to recognise diversity shouldn’t be a cost factor – it should come as standard. Diversity brings valued perspectives and creativity to the mix, adding value to both the agency and the brand. The Survey highlighted some interesting views on DEI and how this will shape brand investment in the future.
MarTech: Technology’s growing impact
MarTech accounts for a significant proportion of agency fees. The Survey found the majority of brands do have visibility into the technology their agency’s are using, the results also indicate that transparency remains important to brands – particularly Marketing Procurement as they want to know the cost of technology and how it’s being used.
Of course, no discussion around technology and the future of Marketing Procurement is complete without AI. It offers both an opportunity and a challenge, reinforcing the need for oversight into the types of AI being used, and how they’re being used, so brands have better understanding. Most brands know their agencies are using AI on their projects but there remains concerns around the details, the governance and actual usage that need to be addressed. It is possibly one of the biggest areas of agency remuneration that needs more clarification and understanding.
Agency Performance: Enhancing agency relationships
Brands are adopting different routes to assessing agency performance. The Survey found interesting percentages around those who review their agencies more than once a year, versus those who conduct annual reviews, or review their agencies every three years. It’s an interesting shift, particularly in light of the insight that a review provides and how this can be used to enhance agency engagement and performance.
The data can also be leveraged to improve metrics and measurements and how both brand and agency engage with these metrics.
That said, ensuring measurements are fair and relevant is key. The Survey found that Marketing leads when it comes to setting key performance indicators while Procurement’s influence remains high. There is certainly a growing awareness of the importance of collaboration across brand silos to assess and manage agency performance and plan ahead for the future.
A dynamic picture of changing expectations
Overall, the Future of Marketing Procurement survey paints a picture of an industry in transition. Marketing Procurement teams are balancing traditional value metrics with emerging considerations around technology, innovation and diversity. Success asks that there is a focus on creating more sophisticated measurement frameworks capable of capturing both quantitative performance and qualitative value elements.
There is also an emphasis on the critical importance of data-driven decision-making in modern Marketing Procurement. Access to the right data and tools is becoming increasingly critical to providing Marketing and Procurement with objective insights into agency performance, market rates and industry trends.
The research is indicative of how the Marketing Procurement landscape continues to evolve and how brands need to adapt their approaches to agency remuneration. To meet these changing expectations and evolving technologies, brands need to combine sophisticated measurement tools with regular, structured review processes designed ensure sustainable value creation for all stakeholders.
