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When an individual or an organization employs an advertising agency to assist in undertaking promotional activities, a number of factors are involved to ensure that the agency–client relationship runs smoothly. However, for the advertiser, as the relationship develops there can be changes in attitudes toward the advertising agency. This paper analyzes the responses of 82 advertisers regarding different elements in the advertising agency–client relationship and compares them across 4 stages in the agency–client life cycle: (a) Inception, (b) Development, (c) Maintenance, and (d) Dissolution. The results of the survey provide some implications to assist in the understanding of agency–client relationships at different times of the life cycle.
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AgencyClient Relationship Factors across the Life-cycle Stages
Kim-Shyan Fam
Department of Marketing
University of Otago
P.O. Box 56, Dunedin
New Zealand
Tel:+ 64 3 479 7692
Fax:+ 64 3 479 8172
Email: kimfam@business.otago.ac.nz
and
David S. Waller
School of Marketing
University of Technology, Sydney
PO Box 123,
Broadway, NSW 2007,
Australia
Tel: + 61 2 9514 3976
Fax: + 61 2 9514 3535
Email: david.waller@uts.edu.au
ABSTRACT
When an individual or an organization employs an advertising agency to assist in undertaking
promotional activities, a number of factors are involved to ensure that the agencyclient
relationship runs smoothly. However, for the advertiser, as the relationship develops there can be
changes in attitudes towards the advertising agency. This paper analyzes the responses of 82
advertisers regarding different elements in the advertising agencyclient relationship and
compares them across four stages in the agencyclient life-cycle: (1) induction; (2)
development; (3) maintenance; and (4) dissolution. The results of the survey provide some
implications to assist in the understanding of agencyclient relationships at different times of the
life-cycle.
KEYWORDS: AgencyClient Relationships, Advertising Agencies, Life-cycle Stages
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AUTHOR INFORMATION
Kim-Shyan Fam BA, MBA (Stirling), PhD (Newcastle, Australia), Dip M (UK), Dip MRS
(UK)
Kim-shyan Fam (PhD) is an Associate Professor of Marketing at the University of Otago,
Dunedin, New Zealand. A marketer turned academic, he has taught in Malaysia, Australia,
Hong Kong and New Zealand. His area of expertise lies within the field of international
advertising and promotion. He has undertaken research in 16 countries in the areas of
advertising agency–client relationships; controversial advertising; Asian advertising and
promotion strategies of small businesses.
Dr David Waller BA (Syd), MCom (UNSW), PhD (Newcastle, Australia)
David Waller is a Senior Lecturer in the School of Marketing at the University of
Technology, Sydney, Australia. He has taught at a number of universities, including the
University of Newcastle, University of New South Wales and Charles Sturt University
Riverina. He has published numerous articles in local and international marketing journals.
His research interests include advertising agencyclient relationships; controversial
advertising; international advertising; and marketing ethics.
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AgencyClient Relationship Factors Across the Life-cycle Stages
INTRODUCTION
For advertisers, it is very important to develop and encourage a good partnership between
them and their advertising agency to ensure the smooth running of advertising/promotional
campaigns on their behalf. The breakdown and failure in an agencyclient relationship can lead
to major costs in time, money and effort, with this “burden of change” involving delays in
implementing new campaigns, time spent on the process of selecting a new agency, and the
development of rapport, trust and confidence in the new agency (Quinn, 1978; Michell, 1986,
1988a; Cook, 1988 Weilbacher, 1991; Buchanan & Michell, 1991; Mathur & Mathur, 1996;
Fam & Waller, 1999; Davies & Prince, 2005). In some cases it has been said that the process of
switching agencies and developing a new partnership takes up to two years (Michell & Sanders,
1995), so it is vital to understand the major elements that are associated with advertising
agencyclient relationships. However, as advertisers and their agencies can journey through a
number of relationship stages from selection to termination (Waller, 2004), the attitudes of
advertisers towards their agencies and the relationship can change over time.
Knowing one’s clients, and staying close to them, is essential if an agency is to be successful.
However, a strong relationship can only be developed and conducted over a period of time. In
addition, one must not forget that such a relationship is between people with different roles and
responsibilities, at different phases of their career and over different phases of the client-agency
life-cycle. According to Barnes (2001), genuine relationships are characterized by an emotional
attachment, a sense of commitment to the other party, and a shared sense of values and goals.
What is important to the client is not always obvious. Similarly there are many things that clients
feel are important that agency administrators have not even begun to think about. In addition,
different situations evoke different expectations and needs. Hence, agency administrators and
managers must realize that understanding what will deliver the building blocks of lasting client
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relationships is an extremely difficult and complex process. Barnes (2001) claims that “getting
to know clients and their likes and dislikes are fundamental to building relationships”.
The challenge facing an agency lies in understanding how the principles of relationship-
building can be applied in dealing with their clients. Morgan and Hunt (1994) attribute
“commitment and trust” as the key determinant of a successful relationship. Barnes (2001), on
the other hand, expanded the list of attributes, including:
Trust and ethics; Commitment; Reliability and attachment; Understanding and empathy;
Mutual goals; Shared values; Reciprocity; Respect and sincerity; Caring, affection and liking;
Dependability; Awareness of history; Two-way communications; Warmth and intimacy;
Interest in needs; Knowledge; Responsiveness; Keeping of promises; Social support and
community; and Competency”.
A relationship does not just happen. It is a commitment between two parties and it involves
the fulfillment of promises over the long term. Relationships are not static, either. Once a
relationship has been established, the parties have to make it start, make it work, develop it, keep
it in good working order and preserve it from going sour (Duck, 1991). Relationships also differ
across individuals and in different relationship stages. Different customers will want different
experiences and different treatment in dealing with a firm and/or in a different stage of the
relationship. The challenge to a management that wishes to create an atmosphere conducive to
the establishment and maintenance of positive customer relationships is to learn what is
important to customers. Hence, the objective of this study is to examine the criteria that are
important at each stage of the relationship. Specifically this paper aims to analyze the results of a
survey of 82 advertisers in Hong Kong to answer the following research objectives:
(1) to determine what are perceived to be the main factors for agency selection;
(2) to determine what are perceived to be the main factors for successfully working with an
agency;
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(3) to discover if the factors for agency selection differ depending on the stage in the life-
cycle; and
(4) to discover if the factors for successfully working with an agency differ, depending on the
life-cycle stage.
From the results, there are a number of issues that are important for the understanding of
advertising agencyclient relationships, indicating practical implications for the advertising
industry.
AGENCYCLIENT RELATIONSHIP FACTORS
When advertisers employ an advertising agency, the agency must possess certain attributes
and capabilities, and undertake certain activities to be selected and to maintain a good working
relationship. Numerous studies have examined these factors in general. Below is an outline of
some of the past research that was used to assist in developing the survey instrument for this
study.
Selection Factors
In the seminal article by Cagley and Roberts (1984), the authors found that the “people
factor” was an important criterion in the evaluation/selection process, with the main attributes
chosen being personnel quality, mutual agreement and understanding, reputation for integrity
and interpersonal compatibility (p. 28). As advertising agencies are providing a service, and
services are highly dependent on the people who provide the service (Parasuraman and Zeithaml
1983), Cagley (1986) confirmed this quite logical finding, comparing the attitudes of advertising
agency executives and clients. In another important study, Wackman, Salmon and Salmon
(1986) identified four sets of factors that can influence the success of the agencyclient
relationship. The factors are:
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(1) Work Product: the advertising and advertising plans;
(2) Work Patterns: the daily aspects of how the agency and client work together;
(3) Organizational Factors: including company policy, structure, and politics, and the
qualifications/experience of personnel involved; and
(4) Relationship Factors: the “chemistry” of the relationship, which includes the level of trust,
respect, rapport, and comfort between agency and client personnel.
Further, Wackman et al.’s study found that relationship factors were the most highly
significant predictor of a client's satisfaction with its agency, followed by organizational factors,
work pattern and then work product factors. Personal attributes like “good personal relationships
with the account people” and the “effectiveness of the meetings between the firm and the
advertising agency”, again relating to the “people factor”, were perceived as being vital in
agencyclient relationships.
Marshall and Na’s (1994) results supported Cagley and Roberts (1984), and identified that
the most important evaluative criteria were: cost-consciousness, interpersonal factors,
professional integrity, empathy, managerial skills and compatibility. These results were
confirmed by Na and Marshall (2001) in a cross-cultural comparison of New Zealand and
Korea. Dowling (1994) found that factors relating to how the agency understands the
product/service being advertised and the reputation of the agency were also important when
selecting a new agency. Fam and Waller (1999) identified eight selection variables: Agency
Resources, Reputation, Marketing and Strategy Development, Integrity and Shared Purpose,
Creative Ability, Interpersonal Relations, Quality of Account Team, and Agency Research
Capability. Ranking these factors by means found that Interpersonal Relations was the most
important factor, with Creative Ability ranked as the second most important factor in winning
new clients.
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Working with Agency Factors
After an advertiser selects an agency, they then both have to try to work together to develop
and maintain the relationship. A number of factors are important for a successful agencyclient
relationship, otherwise dissatisfaction in the relationship will lead to agency termination and the
process of selecting another advertising agency. Hotz, Ryans and Shanklin (1982) suggested that
agencyclient problems could be reduced by better communication between the parties, as well
as better compensation, morale, training, resources, and reducing the levels in client approval
and formal agreements between clients and their agencies. Beard (1996, 1997, 1999) suggested
that clear communication of information and role-clarification is important for the successful
maintenance of an agencyclient relationship. West and Paliwoda (1996) also claimed that
communication is an important factor in continuing client maintenance.
In studying the reasons for the agency–client relationship breakdown, Doyle, Corstjens and
Michell (1980) and Michell (1986) found that the clients rated “dissatisfaction with agency
performance” as the most important factor for switching, while the ex-agencies rated “changes
in client policy” as the most important reason. The study suggested that the process of
relationship breakdown consists of “creeping disenchantment” preceded by signals of
vulnerability, and that agencies are less sensitive to these signals of dissatisfaction. Michell,
Cataquet and Hague (1992) and Durden, Orsman and Michell (1997) continued to replicate
Doyle, Corstjens and Michell (1980) and while the studies tended to support each other, the
intensity of clients’ disaffection with their advertising agencies appears to be deepening across
the three studies. Dowling (1994) identified four main areas of conflict: (1) a creative issue
style of campaign; (2) a success/failure issue campaign effectiveness; (3) a cost issue cost of
a campaign; and (4) an interpersonal issue client service. LaBahn and Kohli (1997) analyzed
working relationships, through agency performance and client disposition to the agency, and
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found that as the agency performance increases, so does the client's level of trust and
commitment, while conflict decreases the level of client commitment and the agency’s creative
quality. Lace (1998) identified five key performance measures: contribution to the achievement
of client marketing objectives; contribution to the standing of client product(s), services or
brand(s); creative output; value for money and service quality.
Henke (1995) found that criteria for selecting an agency are different from criteria used to
decide whether to keep the agency. For example, the role of creativity diminishes as the agency
client relationship evolves. This study confirms the existence of a changing relationship and
points out that change can occur quickly, which the agency should prepare for and respond to
appropriately. Changes can also occur very quickly in a crisis, or when there is controversy from
an advertising campaign. Bennett (1999) observed the issue of agency termination by analyzing
a survey of charitable organizations, and found that the main reasons for dissatisfaction were
with creative design, the agency's staff were not paying enough attention to the client's account,
and the failure to meet deadlines. Therefore it can be seen that there are a number of factors
involved in the successful workings of an advertising agencyclient relationship. These studies
were used to present a number of items in the questionnaire for this study to determine factors
important for a good working relationship.
AGENCYCLIENT RELATIONSHIP STAGES
According to Henke (1995), the advertising agencyclient relationship literature has aimed:
“to define the agencyclient relationship, to compare client perceptions to agency perceptions, ...
to identify factors that lead to agency selection or to a good agencyclient relationship ... (and)
to identify specific reasons for agencyclient splits” (p. 24). A number of studies have observed
agencyclient relationships, indicating three or four different stages. Wackman, Salmon and
Salmon (1986) presented a agencyclient life-cycle with four stages or phases: (1) Pre-
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relationship, (2) Development, (3) Maintenance and (4) Termination. However, in their
discussion of the literature, the “Development” and “Maintenance” Stages were combined, as
the “literature on these two phases of the agencyclient relationship does not differentiate
between the two” (p. 23). Wackman, Salmon and Salmon (1986), therefore, reviewed three
areas relating to agencyclient research: (1) Pre-relationship, (2) Development/Maintenance and
(3) Termination.
Wills (1992) divided the agencyclient literature into three topics: (1) criteria for selecting an
agency; (2) developing the dimensions of the agencyclient relationship; and (3) factors that
cause problems in agencyclient relationships. West and Paliwoda (1996) also divided the
agencyclient literature into three key topics: (1) “attributes” (for agency selection), (2) “client
dissatisfaction” and (3) “termination”. Davidson and Kapelianis (1996) discussed agencyclient
relationship in South Africa and presented a similar model of agencyclient relationship with
“three distinct, yet interrelated, stages”: (1) pre-contracting stage, (2) contracting stage, and (3)
post-contracting stage. Finally, Waller (1999) classified three stages in an agencyclient
relationship life-cycle: (1) “agency evaluation/selection”, (2) “relationship development and
maintenance”, and (3) “agency review/termination”.
For this study the respondents were asked to classify what stage of the relationship they were
currently in, which resulted in four distinct stages: (1) Inception, (2) Development, (3)
Maintenance, and (4) Dissolution.
METHODOLOGY
To answer the four objectives, we undertook the following tasks. First, we sourced the items
on agency selection factors from previous studies, adding modifications to the items to suit the
purpose of this study (see Fam & Waller, 1999; Cagley & Roberts, 1984; Wackman, Salmon &
Salmon, 1986). We used a total of 33 items representing eight factors to determine agency
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selection criteria, and we asked respondents to rate how important (1 = not important, 7 = very
important) each item is in relation to selecting the services of an advertising agency. Second, in
order to determine the perceived main factors for successfully working with an agency, we
presented a total of 68 items to the advertisers. We obtained these items, representing 19 factors,
from various studies relating to working with an agency and again modified them to suit the
purpose of this study (see Armstrong & Yee, 2001; Boyle, 1997; Bennet & Gabriel, 2001;
Hausman, 2001; Kumar, Scheer & Steenkamp, 1995; Nielson, 1998; Sharma & Patterson, 1999,
2000; Selnes, 1998; Wong & Sohal, 2002; So & Speece, 2000; and Yau et al., 1999). For this
section, we asked the respondents to think of a recent promotion campaign on which they have
worked with their present advertising agency and then indicate to what extent they
agree/disagree (1 = strongly disagree, 7 = strongly agree) with these relationship statements.
Third, the questionnaire included an item relating to the company’s stage (inception,
development, maintenance and dissolution) of relationship with its advertising agency. We
provided a description of each stage to ensure the respondents understood its meaning. As the
study intended to secure the marketing (including product, brand or communication) manager’s
opinion on client-agency relationship, the questionnaire included a check item relating to the
position of the respondents within the company.
We mailed the questionnaire randomly to 600 (every fourth name on the list) selected
advertisers in Hong Kong, having obtained addresses from the Hong Kong Directory of
Advertisers. We made no prior contact with these advertisers, although their chairpersons
officially informed them at an annual meeting. Besides the 92 undelivered questionnaires, we
received 82 usable responses, representing a response rate of 16 percent at the end of a four-
week wait. This is a typical response rate in busy Hong Kong, where respondents are reluctant to
participate for fear of revealing too much to a competitor or they simply do not have any
inclination to participate in the study. Of the 82 replies, 60 were at manager level and 22 were
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senior managers of various organizations, including grocery, insurance, banking, clothing/shoes,
hardware, transport, telecommunications and real estate organizations.
RESULTS
Criteria Used for Agency Selection
Table 1 shows the factors relating to what are perceived to be the main factors for agency
selection. Based on the mean scores, the factors perceived to be important for agency selection
are: Interpersonal Relations (mean = 5.44), Creative Ability (5.38), Quality Account Team
(5.27), Integrity & Shared Purpose (5.25), Agency Resources (5.17), Marketing & Strategy
Development (5.13), Agency Experience (5.03), and Reputation (4.65). These results answer
objective 1. The findings further confirmed earlier studies (see Fam & Waller, 1999; Dowling,
1994; Marshall & Na, 1994) that the people factoris an important criterion for selection on the
part of advertisers.
Place Table 1 Here
Working with the Agency
To determine the perceived main factors for successfully working with an agency, we
forwarded 68 items representing 19 factors to the advertisers. A list of the factors with the
individual items and the group means and α reliability scores are presented in Table 2. Based on
the mean scores, the factors perceived to be important for agency selection are: Trust in
Agency’s Honesty (mean = 4.85), Client Dependence (4.61), Expertise/Knowledge (4.57),
Reciprocity (4.52), Commitment-Affective (4.44), Bonding (4.37), Trust in Agency’s
Benevolence (4.30), Satisfaction (4.21), Agency Dependence (4.21), Closeness (4.20),
Understanding/Empathy (4.18), Information Exchange (4.18), Commitment Continuance (4.15),
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Relationship Strength (4.10), Communication Effectiveness (4.06), Joint Working (4.04),
Benefits (3.96), Conflict-handling (3.85), and Social Activities (3.05). This answers research
objective 2.
Place Table 2 Here
Agency Selection Based on Life-cycle Stage
To discover if the factors for agency selection differ depending on the stage in the life-cycle,
a comparison was made of the eight agency selection factors across the four life-cycle stages.
The results are found in Table 3. Generally there was agreement across the stages, although
there were two factors where there were significant differences: Market Strategy and
Interpersonal Relationship. In particular those in the Maintenance Stage perceived Market
Strategy as a lesser factor for agency selection, while Interpersonal Relationships were perceived
as being a more important factor by those in the Dissolution Stage. This answers research
objective 3.
Place Table 3 Here
Working with the Agency Based on Life-cycle Stage
To discover if the factors for successfully working with an agency differ depending on the
life-cycle stage, a comparison was made of the 19 working with the agency factors across the
four life-cycle stages. The results are presented in Table 4. There was some agreement across the
stages, although there were eight factors where there were significant differences. Those in the
Dissolution Stage did not perceive Commitment-Affective, Commitment-Continuance,
Satisfaction, Conflict Handling, Agency Dependence and Relationship Strength as important
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when working with an agency, while those in the Inception Stage did not perceive Closeness and
Bonding as important. This answers research objective 4.
Place Table 4 Here
DISCUSSION
This study analyzes the relationships Hong Kong advertisers have with their advertising
agencies, allowing comparisons to be made across the relationship cycle, and to highlight which
factors are valued as most important at each stage of the relationship. At the selection stage, our
results support earlier studies that the “people factor” is valued as the most important factor by
advertisers. This factor includes Interpersonal Relations, Creative Ability, Quality Account
Team and Integrity. The results suggested clients in very early stage of the relationship have
higher ratings of who is responsible for their business rather than what the agency can do for
their business. This is quite natural, given that the clients are the ones who fork out large sums of
money for a campaign. Agency management should, in the selection process, emphasize to a
potential client upfront who will be responsible for its account and, if possible, ensure that the
nominated person/s handles the account accordingly. These four factors are similarly valued
across the four stages of the relationship cycle and more so in the dissolution stage. The higher
mean values for this stage could be interpreted as how much the client values this “people
factor” and that the client is prepared to dissolve the relationship when there is a void. Again, the
agency should not be complacent with what it does. It needs to be vigilant at every stage of the
relationship.
The second important finding is the importance of trust and honesty. This suggests that the
development of trust and faith should be a fundamental component of any marketing strategy
that is intended to lead to the creation of genuine customer relationships. The customer must be
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able to feel that it can rely on the agency; that the agency can be trusted. Following trust and
honesty, factors like Client Dependence, Expertise/Knowledge, Reciprocity and Commitment-
Affective are highly valued by clients. We can collectively identify these factors as commitment.
Rusbult and Buunk (1993) claim commitment is “a psychological state that globally represents
the experience of dependence on a relationship” (p. 180). Barnes (2001, p. 121) claims that:
“Commitment represents a long-term orientation to the relationship, including a desire to
maintain the relationship, both in good times and bad”. The findings reflect these descriptions in
that Hong Kong advertisers expect their agency to depend on them for business, to share their
marketing expertise, and to repay kindness. These traits, according to Morgan and Hunt (1994),
represent key factors in determining success of a relationship. The authors claim that
commitment and trust are key because they encourage marketers to (1) work at preserving
relationship investments by co-operating with exchange partners, (2) resist attractive short-term
alternatives in favor of the expected long-term benefits of staying with existing partners, and (3)
view potentially high risk action as being prudent because of the belief that their partners will
not act opportunistically (p. 22).
Correlating these factors across the relationship cycle provides a much richer insight into how
clients value (higher mean) trust, honesty and commitment. Clients valued these factors highly
in the Inception, Development and Maintenance phases. These three stages are the “working
stage” in which most activities take place. Hence it is natural that there is trust, honesty and
commitment between the two parties. Clients want to feel that the agency working on their
account can be trusted, that their business is valued and that the agency actually cares about
them. In fact, trust, honesty and commitment can be seen as the backbone of the relationship.
The next group of factors that clients value (higher mean) in the Development and
Maintenance phases includes information exchange, joint working, understanding,
communication effectiveness, conflict-handling, satisfaction, benefits, and relationship strength.
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During this stage, what the clients want is an understanding of their business, sharing of
information and results. Agency managers should take the perspective of their client. Satisfying
clients involves a great deal more than giving them great campaigns. They are interested in
greater exchange of information, such as sharing technical know-how and/or research
information and would also like to get involved in the development of a campaign. To address
this, agency managers should accord their client a helping hand, get it involved in the
development and planning of a campaign, and share with the client any accolades they have
achieved. Delivering extraordinary service is another way in which an agency can endear itself
to its clients, such as defending the client when it is being criticized or readily adjusting business
objectives to meet the client’s unforeseen needs. Finally, the group of factors that clients value
(higher mean) at the Dissolution stage is closeness, bonding and client dependence. This must
not be seen as a lost cause. Clients value these factors, as presumably the dissolution of the
relationship might not have eventuated had the agency paid more attention to their needs. The
concept of closeness has considerable value in relationship marketing. In a study of predictors of
advertising client-agency relationship dissolution, Hardy (2001) found the “breakdown of
interpersonal relationships”, and “priorities” as primary reasons for termination. Although the
conventional wisdom is to get closer to the customer, agency managers should be interested in
the closeness of their customer relationships and should set out to measure and manage that
closeness. If prioritization of work is needed, then they should explain it to the client. Similarly,
if there is a need to charge the client for services beyond the call of duty, they should by all
means explain to the client why such charges were laid. Clients are more likely to feel close to a
company that makes regular, meaningful and honest contact, regardless of the frequency.
Whenever possible, making face-to-face contact with the client would certainly boost the
client’s feelings about the human content of the service. In conclusion, closeness to customers
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has many advantages, such as having more business with that company, as well as the company
being more likely to refer other customers to the agency.
CONCLUSION
This study has examined the perceived main factors for agency selection and what the factors
are for successfully working with an agency. The results indicate the people factor as the
primary criterion for agency selection. Even though we conducted the study among Hong Kong
advertisers, the findings support earlier studies in this area. For successfully working with an
agency, the study found that trust, honesty and commitment are conducive to building a long-
term relationship. When correlated with relationship cycle, we found that trust, honesty and
commitment are more valued by clients during the working stage. At the dissolution stage, we
saw closeness, bonding and client dependence or rather, the lack of it, as forces driving the
relationship failure. Nevertheless, the findings should be treated with caution due to the small
sample size and the fact that we based it in one particular region.
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23
Table 1: Criteria Used for Agency Selection
Interpersonal Relations
(α = 0.74; mean = 5.44)
Compatibility of Agency and client personnel
Degree of chemistry/synergy between agency and client management
Creative Ability
(α = 0.87; mean = 5.38)
Need for agency personnel to thoroughly understand characteristics of advertisers business
Strategic planning ability (including proprietary software)
Overall strength of creative product
Willingness of agency to interact with client when developing a creative strategy
Agencies creative philosophy
Quality Account Team (α = 0.70; mean = 5.27)
Quality of agency people assigned to the account
Extent of top management participation in client service
Agency personnel pitching for the account are those who will be assigned to the account
Cost consciousness of agency personnel
Integrity & Shared Purpose (α = 0.71; mean = 5.25)
Willingness of Agency to make recommendations and to object to advertiser decisions when agency
perceives them to be wrong (reputation for integrity)
Complete agreement between agency and client on goals and objectives
Evidence of agency initiated projects that have come to fruition
Agency Resources
(α = 0.82; mean = 5.17)
Agency can provide full range of marketing and communication services
Agency resource in all areas including account service, creative, media buying, print production,
electronic production, sales promotion, direct mail etc.
Integration of media function into agency planning process
Employee stability of agency
Agencies general structure and handling of accounts - the reporting and accounting systems in place
Flexibility of agency to tailor remuneration method to client requirements
Marketing & Strategy Development (α = 0.80; mean = 5.13)
Agency can provide client with assistance in the development of marketing plans
Agency can provide assistance in long term business development/strategic direction of client business
Agency can provide commentary and information on current global market trends
Agency Experience (α = 0.65; mean = 5.03)
The size, range and balance of the agency’s account portfolio
Amount of agency experience with other advertisers that produce similar products
Ability of agency to handle all market research for the client
Ability of agency to integrate research with creative and media work
Reputation
(α = 0.79; mean = 4.65)
Agency has international affiliations
Degree of business growth and record of agency performance
Awards received by the agency
Response of past or existing clients as referees
Previous accounts lost and reasons for break-ups
24
Table 2: Working with Your Agency
Trust in Agency’s Honesty (α = 0.91; mean = 4.85)
My present advertising agency can be relied upon to keep promises
My present advertising agency can be trusted at all times
My present advertising agency is honest
My present advertising agency has high integrity
I can count on this agency to be sincere
Client Dependence (α = 0.77; mean = 4.61)
Besides the present advertising agency there are other advertising agencies who could provide us with comparable service
Our total costs of switching to another agency would be minimal
It would be easy for my company to replace the income generated from the promotion campaign produced by this
advertising agency
Expertise/Knowledge = 0.91; mean = 4.57)
My agency has knowledge about the market and market trends
My present advertising agency is able to answer my questions
My present advertising agency knows his/her competitors
My present advertising agency is competent
Reciprocity (α = 0.81; mean = 4.52)
My present advertising agency and I always fulfill our promises
My present advertising agency and I always repay each other’s kindness
My present advertising agency and I always regard caring and sharing as our business/relationship motto
Commitment-Affective (α = 0.82; mean = 4.44)
Even if I could, I would not drop this agency because I like being associated with it
I want to remain a member of this agency’s network because I genuinely enjoy my relationship with it
My positive feelings towards this agency are the major reason I continue working with it
Bonding (α = 0.90; mean = 4.37)
My company’s achievement builds on our reliance on the present advertising agency and vice-versa
I keep in touch with this advertising agency constantly
I work in close cooperation with this advertising agency
My present advertising agency and I try very hard to establish a long-term relationship
Trust in Agency’s Benevolence (α = 0.88; mean = 4.30)
When making important decisions, my present agency is concerned about my company’s welfare
When I share my company’s problems with this agency, I know that it will respond with understanding
I can count on this agency to consider how its decisions and actions will affect my company
Though circumstances may change, I believe that this agency will be ready and willing to offer my company assistance
and support
Satisfaction (α = 0.91; mean = 4.21)
I am very satisfied with this advertising agency
If I had to do it all over again, I would re-engage this advertising agency
I feel good about my decision to put more efforts into working with this advertising agency
Agency Dependence (α = 0.84; mean = 4.21)
In my opinion, the present advertising agency could easily find another client/advertiser to replace their sales and profits
our promotion campaign currently generates
In my opinion, the present advertising agency would incur minimal costs in replacing us with another client/advertiser
There are other clients/advertisers that could provide my advertising agency with comparable business
Closeness (α = 0.87; mean = 4.20)
I have an extensive working relationship with this agency
Other personnel in my company have spent a lot of time working with the present advertising agency
Other personnel in my company have developed close working relationship with the present advertising agency
Understanding/Empathy (α = 0.89; mean = 4.18)
My present advertising agency and I know how each other feels
My present advertising agency and I always see things from each other’s view
My present advertising agency and I care about each other’s feeling
25
Information Exchange (α = 0.82; mean = 4.18)
My present advertising agency sends research data/publications to me on a regular basis
My present advertising agency willingly provides important strategic, technical and operating information if needed for the
promotion campaign’s success
My present agency willingly provides proprietary information if needed for the promotion campaign’s success
Commitment Continuance (α = 0.56; mean = 4.15)
I expect my relationship with this agency to last a very long time
If it’s between my company and agency, I do whatever I can to please my present advertising agency first
I regard my present agency more as an important business partner than a service provider
Relationship Strength (α = 0.87; mean = 4.10)
My relationship with the present agency is based on ‘cooperative effort’ rather than ‘arms’ length negotiation’
The continuation of the relationship with the present advertising agency is very important to my company
The relationship my company has with the present agency is something I intend to maintain indefinitely
I would defend this advertising agency if others criticize it
I have a strong sense of loyalty to this advertising agency
There is an efficient working relationship between my company and this advertising agency
The present advertising agency is flexible in response to requests made by my company
The present advertising agency can readily adjust its business objectives to meet my company’s unforeseen needs
Communication Effectiveness (α = 0.86; mean = 4.06)
My present advertising agency keeps me very well informed about what is going on in his/her company
My present advertising agency does not hesitate to explain to me the pros and cons of the promotion campaign objectives
My present advertising agency never hesitates to give me as much information as I like to have
Joint Working (α = 0.90; mean = 4.04)
My company and present advertising agency jointly decide on the goals and objectives of all promotion campaigns
My company and present advertising agency mutually agree before making major strategic, technical and operating
decisions for a promotion campaign
My company and present advertising agency solve the promotion campaign’s technical and operating problems as a joint
effort
Benefits (α = 0.92; mean = 3.96)
As a result of the relationship with this advertising agency, we have substantially increased our market share
As a result of the relationship with this advertising agency, we have increased our volumes and revenues
As a result of the relationship with this advertising agency, we have substantially increased our total profit
Conflict Handling (α = 0.85; mean = 3.85)
My advertising agency is good at solving disputes before they create problems in our working relationship
My present advertising agency makes sure that problems do not arise in our working relationship
My present advertising agency has the ability to openly discuss solutions when problems arise
Social Activities (α = 0.93; mean = 3.05)
I regularly invite this agency to non-business related social activities
I regularly make courtesy visits to this advertising agency
I regularly invite this agency to breakfast/lunch/dinner
I regularly organise seminars/luncheon presentations for this agency
26
Table 3: Importance of Agency Selection Criteria across the Agency-Client Life-cycle
Inception
Stage
N=16
Development
Stage
N=25
Maintenance
Stage
N=33
Dissolution
Stage
N=8
Χ2 sig
* 0.05
**0.01
Agency
Resources
5.2 (0.60)
5.4 (0.65)
4.9 (0.98)
5.2 (0.33)
ns
Reputation
4.5 (0.97)
5.0 (0.80)
4.5 (1.12)
4.5 (0.46)
ns
Market
Strategy
5.2 (0.88)
5.5 (0.73)
4.7 (1.30)
5.7 (0.43)
0.007**
Integrity
5.4 (0.46)
5.3 (0.67)
5.1 (1.07)
5.6 (0.46)
ns
Creative
Ability
5.5 (0.58)
5.5 (0.72)
5.1 (1.16)
5.9 (0.43)
ns
Interpersonal
Relationship
5.4 (0.87)
5.4 (0.87)
5.2 (1.23)
6.5 (0.66)
0.025*
Quality
Account Team
5.3 (0.68)
5.4 (0.71)
5.3 (1.07)
6.0 (0.62)
ns
Agency
Experience
5.0 (0.75)
5.3 (0.67)
4.9 (1.01)
5.6 (0.40)
ns
27
Table 4: Importance of Working with Agency Factors
across the Agency-Client Life-cycle
Inception
Stage
N=16
Development
Stage
N=25
Maintenance
Stage
N=33
Dissolution
Stage
N=8
Χ2 sig
* 0.05
**0.01
Trust Honesty
4.7 (0.84)
4.8 (0.96)
5.1 (0.70)
4.4 (1.07
ns
Commitment
Affective
4.2 (1.09)
4.7 (1.01)
4.6 (1.00)
3.5 (1.50)
0.050*
Commitment
Continuance
4.0 (0.82)
4.5 (0.95)
4.3 (0.84)
2.88 (1.00)
0.000**
Trust
Benevolence
4.2 (0.80)
4.2 (1.26)
4.4 (1.01)
4.15 (0.88)
ns
Expertise
4.5 (1.11)
4.3 (0.95)
4.9 (0.89)
4.3 (0.93)
ns
Information
Exchange
3.8 (1.05)
4.1 (1.24)
4.5 (1.23)
3.8 (0.99)
ns
Closeness
3.5 (1.11)
4.2 (1.16)
4.5 (1.25)
4.4 (0.85)
0.033*
Joint Working
3.6 (1.66)
4.1 (1.24)
4.3 (1.34)
3.7 (0.93)
ns
Bonding
3.7 (1.11)
4.4 (1.27)
4.7 (1.16)
4.1 (0.82)
0.032*
Understanding
3.9 (1.21)
4.0 (1.28)
4.6 (1.03)
3.7 (1.04)
ns
Communication
Effectiveness
3.9 (1.15)
3.9 (1.25)
4.3 (1.12)
3.8 (0.93)
ns
Satisfaction
3.9 (1.09)
4.2 (1.01)
4.7 (1.05)
3.1 (1.14)
0.002**
Social Activities
2.8 (1.32)
3.1 (1.35)
3.2 (1.34)
2.7 (1.52)
ns
Conflict
Handling
3.6 (0.94)
3.8 (1.18)
4.2 (0.95)
3.1 (0.69)
0.043*
Agency
Dependent
4.7 (0.82)
3.9 (0.67)
4.4 (1.23)
3.3 (0.99)
0.010*
Client
Dependent
4.9 (1.05)
4.4 (0.76)
4.5 (1.21)
5.2 (0.91)
ns
Reciprocity
4.4 (0.85)
4.3 (1.00)
4.7 (0.83)
4.3 (0.73)
ns
Benefits
3.5 (1.40)
4.1 (0.94)
4.1 (1.20)
3.9 (0.77)
ns
Relationship
Strength
3.7 (0.74)
4.1 (0.85)
4.4 (0.84)
3.3 (1.00)
0.003**
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