SCOPEN has just finished a new wave of their AGENCY SCOPE Study in collaboration with R3, a renowned global marketing consultancy in China. COVID-19 has accelerated processes, with one of the most relevant changes being marketers’ commitment to Innovation and Digital Transformation. “Being closer to Digital Platforms will help agencies to be perceived as companies better prepared to work with brands” says César Vacchiano, president and CEO at SCOPEN, ”Competition is high, and all strategies that help marketers to reinforce the position of their brand and connect with their audiences, will help enormously when it comes to retaining clients, and winning new accounts”.
AGENCY SCOPE CHINA 2021/22 is the ninth edition of the study in the country, which is also conducted in 11 other markets, enabling us to include global benchmarks in key criteria. In this edition, we interviewed 396 professionals from 208 leading companies that operate in the Chinese market with 670 client-agency relationships analyzed. The fieldwork took place between August and December 2021.
The primary value of AGENCY SCOPE is to provide subscribing agencies, and other communication partners, with first-hand information regarding the needs of their existing and prospective clients. This report provides them a unique tool to improve and supply new services as it covers the main findings and trends in the communication and marketing sector and more specifically, the perception and image of their company in comparison to all other agencies and communication partners that Chinese marketing professionals work with.
87% of marketers pitch to select a new agency
‘Pitching’ is the most frequently used method to select a new agency/partner (87% -decreased more than 5 percentage points when compared to 2020) and has a higher importance than in any other country where this study is carried out. In other countries, such as India or Spain, ‘International decisions’ are higher than the global average when selecting a new agency.
‘No Pitch’ (global decision) is in second position (8.4%), followed by ‘Workshop / Chemistry Session’ (7.4%). ‘Selection by credentials’ (5.9%) and, ‘Help of external consultants’ (3.0%) are less mentioned.
When marketing professionals identify decisive criteria used to select a communications agency, the 3 most mentioned attributes are: ‘Integrated Services Offering’, ‘Strategic Planning’, and ‘Creativity-Innovation’. Less decisive factors when selecting an Agency, are ‘Agency rankings’, ‘Awards won by the Agency’, and ‘Multiple locations of the Agency in China’.
The marketer-agency relationship model is mainly based on projects
More than half of marketers have a relationship model with their current communication agencies based on ‘Projects’ (54.4%), followed by a ‘Framework Contract’ (42.1%, new in this edition of the study), ‘Annual Retainer’ (14.3%) and ‘By Commission’ (2.0%). If we make a comparison with the last edition, there are more marketers that work with agencies based on Project based relationships (46.0% in 2020).
The marketers’ remuneration model with creative agencies in China is different from the global sample. China is above the global average in the number of ‘Project based’ relationships (China: 51.1%, Global: 36.4%) as it also occurs in Argentina, Spain, UK, and India. On the other hand, we find that Brazil, Chile, India, and South Africa are markets with a higher percentage of client-agencies remuneration based on a ‘Framework contract / Annual Retainer’ model.
Client satisfaction with creative and media agencies still has to improve
The NPS index (Net Promoter Score) for creative agencies in China in 2022 is negative (-6.2). However, it has improved from the previous edition (2020 NPS= -10.6). China is placed in 8th position in the NPS index ranking among the 10 countries where the study is carried out (global NPS= +10.6).
Regarding media agencies, the average NPS index in China is -14.5 (in 8th position among 9 countries analysed). The global NPS average for media agencies is +9.7.
China is the most demanding market in terms of client’s satisfaction with its agencies. Even though NPS index has increased in the last two years, the number of detractors is still higher than that of its promoters. The complexity and higher competition of the market means those agencies need to offer more added value (new services, specialties, alliances with other partners …) to achieve higher levels of client satisfaction.
The level of satisfaction with the service provided by the IMC agencies in China has also increased in the last two years (2020 ‘very satisfied or satisfied’: 63.4% vs. 2022: ‘very satisfied or satisfied’: 66.2%), while the international satisfaction benchmark stands at 77.1%.
72.7% of interviewees have no intention to change their current IMC agencies (66.9% in 2020) but in the last two years, the intention to change agencies has increased (‘definitely’ will change or ‘probably’ will change) and is similar to the global average (11.6% of Chinese marketers are thinking of changing their IMC agencies in 2022 (6.3% in 2020, and global benchmark is 13.9%).
Focus on the consumers and the changing digital environment, the main industry challenges
For marketing professionals, the most mentioned challenges are investing in ‘Tools / Measurement / Data / Big Data’ (23.8%), ‘Improve internal resources / Processes’ (20.3%) and being capable of ‘Anticipating trends / Adapting to current times’ (17.3%).
As a global trend, ‘Understanding consumers’ is key in brand strategy as they are better informed and have developed new habits. ‘ROI’ and efficiency are also listed amongst the top challenges for marketers, which can be attributed to a review of budgets, especially in these uncertain times caused by ‘COVID-19’. Data Protection Laws are also of greater concern.
When compared to the previous edition, four concepts have increased dramatically: ‘Tools / Measurement / Data / Big Data’, ‘Improve internal resources / Processes’, ‘Anticipate trends / Adapt to current times’, ‘Branded Content / No intrusiveness’, and ‘Understanding Digital transformation’. Meanwhile, two ideas have been included as new: ‘Better understanding of Digital Transformation’ and ‘Achieving good relationships with more and different partners’.
The desire to differentiate from competitors through creative and innovative campaigns is also a global trend in 2022.
When we ask marketers to identify the main challenges for their agency partners, they mention their need to improve ‘Market knowledge / Understanding consumer needs’ (22.3%). In second place they think they need to provide more ‘Innovation / Creative ideas’ (21.8%), followed by being able to ‘Anticipate trends / Adapt to the environment changes’ (20.3%).
You may also be interested in reading: AGENCY SCOPE CHINA 2021/22: Marketers’commitment to innovation and digital transformation is changing the agencies’ ecosystem in china