Funnel Study Highlights Growing Risks Facing Marketing Agencies and Opportunities to Adapt
STOCKHOLM, SWEDEN AND MASSACHUSETTS, USA, TUESDAY, AUGUST 27: Funnel (www.funnel.io), marketing intelligence platform and market analysis company Ravn Research (ravnresearch.com) today released a report on the state of the global marketing-agency relationship. You can download the report here: page.funnel.io/access-agency-acceleration
The report draws on quantitative and qualitative research from 327 in-house marketing professionals and marketing agency executives, examining the existential challenges agencies face. Funnel and Ravn found that marketing agencies face a triple threat: pressure from regulators and big tech companies, a lack of advanced analytics skills, and changing perceptions about the value of agencies themselves, with AI and automation replacing human labor in some cases.
AI is becoming increasingly present in marketing
Many in-house marketers say AI will invariably affect their relationships with agencies.
Main conclusions:
● 43% of marketers say AI will make their business less dependent on agencies
● Agencies, for their part, are not at all in step with this development: two-thirds of agency professionals expect their financial situation to improve over the next year, with AI having a net positive impact on their business.
● Less than a quarter of companies view the increasing insourcing of marketing functions, driven in part by the adoption of AI, as a major threat to their business
AI is starting to impact the marketing and advertising industry, but it is not expected to replace human and agency work in the near future.
Agencies face customer distrust
The future of marketing relies on sophisticated measurement models and vast volumes of data to be shared between clients and agencies. Closer partnerships are therefore necessary to succeed. Yet Funnel’s report indicates a general distrust of agencies and frustration with repetitive processes on the client side.
Key findings from the survey of internal marketers:
● More than half of in-house marketers don’t trust their agency partners, especially when it comes to controlling costs and delivering personalized, innovative solutions
○ 75% say their company’s outsourcing rates to agencies will decrease or remain stable over the next year
● Additionally, only 40% of marketers say their agencies are invested in the long-term growth and success of their business; only 47% believe their agencies communicate measurable results well.
Question: Do you agree or disagree with the following statements about your agency?
Marketers, however, noted that agencies were more effective at sharing honest feedback and setting realistic expectations.
“Our agency’s mission is to make sense of data analytics, AI, machine learning, language models, etc.,” explains Benjamin KellerHead of Data and Business Intelligence Chapter at Solar laboratory“What can be difficult is presenting it in a way that customers can understand and synthesize.”
A golden opportunity for agencies in terms of added value
As the last-click attribution method used to measure marketing impact is slowly eroded by regulatory and Big Tech data limitations, many marketers now face uphill battles to move toward advanced analytics and rely less on third-party data.
Innovations in advanced analytics used in marketing come in three forms:
● Marketing mix modeling (MMM) uses statistical models to measure the impact of marketing activities on business outcomes such as sales and return on investment.
● Incrementality testing estimates the additional impact of a specific campaign or activity by comparing the results of a test group exposed to the campaign with a control group that was not exposed to it.
● Multi-touch attribution deploys user-level and micro-level tracking to assess user journeys and the impacts of individual touchpoints
Key findings on the use and mastery of advanced analytics:
● Teams typically lack an advanced analytics expert to inform decision-making; for example, 69% of marketers surveyed say they do not have a clear, documented roadmap for adapting to the removal of third-party cookies
○ Given that their clients don’t have experts or roadmaps to track performance, most agencies (66%) therefore believe that offering advanced analytics represents a major opportunity for their organization.
● About 60% of marketers already use some form of data analytics to measure performance
○ But very few use the most advanced probabilistic forms, such as MMM tests (26%) and incrementality tests (26%).
● Few marketers (15%) plan to outsource additional advanced analytics services in the next 12-18 months, leaving the majority with limited visibility into the impact of marketing spend
Question: Does your marketing team do any of these tasks in-house?
While many in-house marketing teams need help from agency partners to implement new strategies, agencies themselves can spread the costs of domain experts across multiple clients, explain the methodologies behind their recommendations, and guide clients through the complex marketing landscape.
“This report comes at a critical crossroads for the industry,” said With CirilloMarketing Manager, USA, at Funnel. With the rise of AI, the decline in cross-device and web tracking, and marketing teams reevaluating budgets, it’s important to examine the relationship between in-house marketers and agency partners. We’ve uncovered some significant findings in collaboration with Ravn Research, including trust in agencies and emerging technologies, and a lack of preparedness among marketing teams for advanced analytics. Both sides need to innovate, and fortunately, there are better tools than ever to help make that happen.”
“Through our qualitative and quantitative research, surveying and interviewing over three hundred marketing and in-house agency professionals around the world, we’ve highlighted the unique challenges agencies face and captured the overall mood of the industry right now,” adds Clare McDermottFounder of Search on Ravn“These figures represent a wide range of countries, company sizes, sectors and functions, clearly indicating that the sector is undergoing significant changes.”
Demography
How many full-time employees currently work for your company/agency?
What best describes your level of responsibility within your company?
Survey respondents represented by region
Which of these types of agencies does your company work with?
About Funnel
Founded in Stockholm in 2014 by Fredrik Skantze (CEO) and By manufactured (CMO), Funnel (www.funnel.io) is the marketing intelligence platform trusted by globally recognized brands like Adidas and Sony. Funnel’s unique Data Hub powers marketing reporting for thousands of organizations. With its industry-leading platform, users can automatically collect, model, visualize, and analyze data from 500+ marketing platforms. The company now has 300+ employees and generated over $50M in ARR in 2023, consistently ranking among the FT 1000 list of the fastest growing European companies.
About Ravn Research
Search Ravn (ravnresearch.com) is a research services company founded by Clare McDermott in 2021, produce original qualitative and quantitative analysis and data journalism to help brands build authority, build connections, gain followers and tell stories.
Press contact details
Alex Gallo – alex.gallo@naracommunications.com+44 7762 984 690
