CMOs Say Agencies Failing to Challenge Clients and Push for Innovation

Posted by John Lee on August 3, 2011
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Future for Integrated Agencies Looks Promising: CMOs Want Results from Fewer, Smaller Agencies, According to New Study by Horn Group and Kelton Research

NEW YORK -- August 3, 2011 -- Horn Group, Inc., a top digital communications agency, and Kelton Research, a leading market research and strategy consultancy, today released findings from a survey of close to 300 senior marketing executives. In the study, entitled "The CMO Challenge," marketing executives reveal that they're longing to be challenged by their agencies, but only 3% say agencies are actually leading the charge for innovation.

"One goal of The CMO Challenge was to find out what CMOs really want. And it's clear: agencies need to be more disruptive in presenting bold ideas and driving change," said Shannon Latta at Horn Group. "We also set out to better understand the skepticism and enthusiasm that coexists around the integrated agency model. Marketers love the idea of maintaining a cohesive, breakthrough voice for their brands, but they haven't seen enough agencies deliver on the promise of the integrated agency to do that under one roof."

Execution Trumps Reputation, Cost
When hiring an agency, CMOs say the ability to execute is seven times more important than reputation and twice as important as cost. Collaboration is also highly valued, with over two-thirds (68%) of marketing execs saying they prefer to work with small agencies (less than 50 people). (See: "What CMOs Want In An Agency" infographic.)

"It's one of the ways the world changed in recent years; now, CMOs know they've got to perform rapidly. They hold partners to the same criteria pushing their best agencies for more, more, more," said Tom Bernthal, CEO and Founder of Kelton Research. "Companies are made up of people. And when CMOs need results, they don't need a name on the door, they need a team of partners that is sharp, creative and dedicated." 

CMOs Debate Integrated Agency Model, But Cite Internal Challenges 
While 70% of marketing executives say they'd eventually like to work with a smaller roster of capable firms, 60% of CMOs have found it difficult to find an integrated, full-service shop to meet their needs. 

"The ideal agency would be highly strategic, understand our business, help orchestrate our integrated communications efforts and deliver measurable results," said Gannon Hall, EVP of Global Marketing at KIT Digital.  "Agencies should take a more dynamic approach to delivering results and de-emphasize specialized services.  I'm interested in building awareness, demand and revenue – not in social media, PR and messaging."

Over half of marketing execs (55%) attribute internal, not external, factors as a bigger roadblock to leveraging an integrated approach.  Making matters worse is that many of today's businesses feel painfully behind the times with the most important kinds of integration.  More than two-thirds (68%) feel their companies are behind the curve in digital/interactive media integration, while another 71 percent have not caught up to social media integration.

Regardless, The CMO Challenge study found that agencies are expected to be more valuable in the years to come (according to 72%), as marketing executives foresee more integration and, therefore, partnerships with fewer firms.  Over three in four (78%) marketers also believe that integration will be more important and 64 percent think agencies will be more interactive by 2016.

Methodology
Kelton Research conducted an online survey in May 2011 of 265 Americans ages 25 and over who work in-house as marketing directors or chief marketing officers and have been in their position for a minimum of 5 years. Kelton also spoke at length with seven CMOs from various companies to gather their opinions and experiences with agencies. In this particular study, the chances are 97 in 100 that a survey result does not vary, plus or minus, by more than 6 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.

To download The CMO Challenge report in its entirety, visit: http://www.horngroup.com/cmochallenge.

About Horn Group, Inc.
Horn Group is a digital communications firm specializing in public relations, social media and interactive design. It represents established brands and hot start-ups in enterprise technology, SaaS, digital media and consumer Internet sectors. The Holmes Report named Horn Group the 2011 Technology Agency of the Year. The company has also been recognized as a best mid-sized agency for five consecutive years in PRSourceCode's annual Top Tech Communicators survey; has won several awards for interactive web design and video production; and is frequently noted as a Best Employer and Best Place to Work. The company was founded by Sabrina Horn in 1991 and is based in San Francisco and New York.

Contact:
Shannon Latta
Horn Group
shannon.latta@horngroup.com
+1.415.297.1488