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Survey: Nearly Four In 10 Advertisers Could Fire Their Agencies In 2023.

For brands and their agencies, breaking up is easier to do.

According to a study of more than 300 marketers conducted by SetUp, a company that matches brands with marketing agencies, 38% of U.S. advertisers say they are likely to sever ties with their current ad agency within the next six months. That's up from the 30% of clients considering firing their main agency within the coming six-month period in the company's spring 2021 survey.

SetUp's fourth such study, with respondents leaning towards those on the client side with a director-level-or-higher position, and those on the agency side identifying as a member of their agency’s executive leadership team, included brands such as Delta Air Lines, Warner Bros., Discovery, Coca-Cola and AbbVie, and employees of agencies such as Luckie, Bounteous, Dalton and Goods & Services.

According to SetUp's report, while both clients and agencies cite many of the same reasons for termination, the order of importance differs. From the agency side, cuts to the client-side marketing budget, shakeups in the client’s leadership team and dissatisfaction with the agency’s delivery rank 1-2-3, while for clients, a lack of strategic approach is the largest factor, followed by leadership changes, an agency’s misunderstanding of client business and dissatisfaction with delivery.

“Generally, clients are less satisfied with their agency partners, and more particularly, their primary agency partner, than they used to be,” SetUp founder and CEO Joe Koufman tells Ad Age. He cited a growing practice of agencies appointing junior employees who, he says, “lack strategic acumen,” to high-profile accounts to boost profit margins.

“There’s a team that pitches the client...but those aren’t the people that are spending time on the account,” Koufman says, adding that the rise of remote work since COVID may have also widened an existing communication gap. “The ‘talent wars’ for good quality marketing talent is real, and the agencies are definitely feeling that in a big way.”

Asking clients about their current primary agency relationships and advertising needs, the results show that 22% of client-side respondents say they’re actively working on bringing marketing duties in-house, compared to 16% of brands in 2021's survey. And 22% of brands also say they have too many agency partners. “In 2022, clients prefer working with fewer marketing agencies overall, and more generalist, rather than specialist, agencies,” the report says, suggesting that to reduce an agency roster, “it makes sense for a client to consolidate capabilities” into a single full-service agency instead of coordinating with a handful of specialized ones.

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