China agencyScope 2014: Marketing Services Agencies General Report

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    23-Jan-2015

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China agencyScope 2014 is research study on the trends of the Marketing Industry in China. The study also gathers data on the perception and performance trends of Creative, Digital, Media, and Marketing Services Agencies in China. R3 Worldwide and Grupo Consultores have been doing this study since 2006 in China. In this edition, the field study was done between August 2013 to December 2013 by conducting 40 minutes to 1 hour interviews with Senior Decision Makers in China's biggest companies/organisations. In this presentation you will get a glimpse of what are the general trends of the Marketing Services Industry in China.

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  • 1. 1 CHINAagencyScope 2014 A research study conducted by Grupo Consultores and R3, since 2006 2006Grupo Consultores 5th Edition, 2014 , 2014

2. 2 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS CLIENT-AGENCY TRENDS INTRODUCTION, METHODOLOGY, & TECHNICAL DATA ADVERTISERS AND THEIR RELATIONSHIPS WITH AGENCIES THE AGENCIES OVERVIEW 1 2 3 3. 3 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS INTRODUCTION,METHODOLOGY, & TECHNICAL DATA 1 4. 4 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS 1978 2008 2011 2003 2009 2013 2012 2010 2006 2005 2009 Introduction agencyScope Globally 5. 5 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS 2014 report is the fifth edition of the Study in China. Only Senior Decision Makers were Interviewed. Face-to-face and telephone, 40min-1 hour interviews. Fieldwork: August - December 2013. A tool for taking action. Introduction 2014 401 20138 201312 Introduction 6. 7 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS IMAGE STUDIES # RELATIONSHIPS Marketers on Marketing Services agencies 157 Marketers on Advertising agencies 314 Marketers on Digital agencies 243 Marketers on Media agencies 230 Methodology Base: 425 Interviewees from 285 Companies (343 brands) 285343425 7. 8 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS Base: 110 interviewees in 2014 2014110 13.6 11.8 1.8 12.7 8.29.1 0 42.7 Below 40M 41 - 100M 101 - 200M 201 - 500M 501 - 1B Above 1 B Does not spend DK/NA / Average ( Million RMB ) : 372.38 : 372.38 Technical data Marketing Budget (%) 8. 9 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS Technical data Budget Split (%) (%) 45.5 35.9 18.6 Above-the-line (ATL) Below-the-line (BTL) 45% of budget goes to above-the-line campaigns, 36% to below- the-line and 18.6% to Digital. In the UK investment in Digital goes up to 22.5%. 45% 36% 18.6% 22.5% Base: 261 interviewees in 2014 (CMOs for agencyScope) 2014261 9. 10 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS Technical data 2014 84.5 11.8 3.6 MULTINATIONAL STATE OWNED LOCALLY OWNED Base: 110 interviewees in 2014 2014110 Technical data Type of company (%) (%) 10. 11 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS Technical data Companies interviewed (59% that agreed to share their name) (59%) 11. 12 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS ADVERTISERS & THEIR RELATIONSHIPS WITH MARKETING SERVICES AGENCIES 2 12. 13 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS AGENCY SELECTION 13. 15 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS Good image/Prestige in the market/They are the best Creativity / Innovation Know the agency/My personal experience with agency Work done in the past / Good agency presentation Structure / Size / International Network Strategic Planning / Marketing understanding Good Service / Professionalism Good image / Prestige / Creativity / Innovation / Know the agency/personal experience / Work done in the past / Structure / Size / Strategic Planning Good Service BENCHMARK BRAZIL CHINA MEXICO UK Agency selection Criteria used to create a Short List of Marketing Services Agencies 14. 16 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS 82.9 38.2 35.5 25.5 10.0 10.8 Pitch Trial assignment / Project / Selection by credentials Workshop / Chemistry session Direct appointment/ global decision / Consultants Base: 110 interviewees in 2014 2014110 Agency selection Selection methods (prompted) / (%) 15. 17 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS MARKETING SERVICES AGENCIES - CLIENT RELATIONSHIPS 16. 18 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS 3.80 4.20 3.23 3.96 China has shorter relationships than any other market. Clients in the UK and Brazil work with their agencies for more than 6 years. 6 Agency-Advertiser relationships - Duration of the relationships (average) () BENCHMARK BRAZIL CHINA MEXICO 17. 19 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS TYPE OF AGENCIES # AGENCIES 2014 2014 # AGENCIES 2012 2012 Average number of Marketing Services agencies 2.31 5.5 Average Number of Advertising agencies 2.22 3.5 Average number of Digital agencies 2.48 3.3 Average number of Media agencies 1.20 2.0 TOTAL AVERAGE OF AGENCIES 8.21 14.30 Agency-Advertiser relationships - Number of Agencies by client (%) 18. 20 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS AGENCY COMPENSATION 19. 21 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS 32.8 4.2 59.9 20.6 8.8 77.9 2014 Mix (fee+commission): 0.4% 2014(+): 0.4% 2012 Mix (fee+commission): 2.9% 2014(+): 2.9% Fee / Retainer Commission Project based Agency Compensation Compensation methods (%) (%) Base: 110 interviewees in 2014 and 87 in 2012 2014110 and 201287 2012 2014 20. 22 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS 46.1 14.5 27.0 15.9 38.8 68.0 77.6 2014 2012 2010 Marketing Procurement Both DK/NA/ Agency Compensation Who leads compensation process (%) (%) Nowadays in only 39% of cases Marketing leads the negotiation process. Figures have changed dramatically since 2010. In 46% of cases Marketing and Procurement lead the process jointly. 39% 2010 46% 21. 23 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS CHANGING MARKETING SERVICES AGENCIES 22. 24 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS Changing agencies Business Growth (%) (%) Base: 110 interviewees in 2014 2014110 18.8 21.0 9.7 15.6 17.8 6.4 9.6 10.5 6.4 81% to 100% 50% to 80% 11% to 50% Up to 10% All clients Multinational Locally owned Clients in average in China believe marketing services agencies contribute to their business growth in 28.7%. 28.7% Average (0%-100%)28.70 27.81 41.00 23. 25 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS 4.8 6.8 5.4 2.2 11.1 9.1 13.0 86.3 80.7 80.5 97.8 Satisfied Indifferent Dissatisfied DK/NA / Changing agencies Satisfaction Current agency (%) (%) BENCHMARK BRAZIL CHINA MEXICO 24. 26 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS The Marketing Services Agencies Overview 3 25. 27 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS HIGH PROFILE CAMPAIGNS 26. 28 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS Most respected Companies 1 2 3 4 5 6 7 8 9 10 27. 29 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS 1 2 3 4 5 6 7 8 9 10 High profile Campaigns 28. 30 AGENCY RELATIONSHIP + REMUNERATION + REVIEW CONSULTANTS sabrina@rthree.com vera@rthree.com cvacchiano@grupoconsultores.com THANK YOU www.rthree.com www.grupoconsultores.com