Marketers, Agencies Differ on Spending Changes in 2016

RSWUS-Anticipated-Change-in-Media-Spending-Jan2016More than 6 in 10 senior-level marketers in the US and Canada anticipate their marketing spending to increase either somewhat (53.5%) or significantly (8.2%) this year, reports RSW/US in its latest annual “New Year Outlook Report.” That’s well above the enthusiasm shown in earlier iterations of the report dating back to 2011, in which no more than 51% of marketers had anticipated increased spending. For the first time, it’s also a greater level of change than expected by agency respondents.

Indeed, this year just 49% of agencies surveyed anticipate their clients’ marketing spending to increase either somewhat (46.9%) or significantly (1.8%). That’s the first time this decade that only a minority of agencies have expected their clients to increase their spending.

Interestingly the disparities don’t end there, as marketers and agencies also have somewhat different viewpoints when it comes to media spending changes, particularly pertaining to traditional media. Indeed, 34% of marketers expect to increase their traditional media spending somewhat or significantly, almost twice the share of agencies (18.9%) who expect their clients’ traditional media spending to increase. Overall, while the data suggests that marketers anticipate their traditional media spending to remain relatively flat this year, agencies are more likely to see it decreasing than increasing.

Meanwhile, although agencies appear more pessimistic about traditional media’s prospects than marketers, they’re more bullish about digital spending this year:

  • 91% expect their clients to increase spending on digital marketing/media, versus 79.6% of marketers who expect to do so;
  • 68% anticipate increased spending on mobile marketing and media from their clients, against 54% of marketers who anticipate a rise in spend; and
  • 71% forecast an increase in their clients’ social media spending, versus 61% of marketers who foresee an increase.

Those are not huge differences, to be sure, but they speak to a potential gap in expectations when it comes to traditional and digital media spending. The RSW/US report notes that in its open ends: “Marketers expressed strong concern about what they perceive as Agencies downplaying the importance of traditional media, and moving too far into newer media channels.” The authors further comment that “Agencies may indeed by leading Marketers in the right direction, but if so, Marketers aren’t understanding why. Or, it could be that Agencies are being too quick to leap on new media channels without adequately quantifying beneficial effects.”

For context, respondents to Duke University’s CMO Survey have consistently forecast a slight dip in traditional media advertising spend, at the same time projecting double-digit increase in digital marketing budgets. Still, various studies (such as this one from Nielsen, or MarketingCharts’ own primary research) support the continued efficacy of traditional media advertising channels.

Meanwhile, in other results from the RSW/US survey, marketers tabbed creative (55.4% choosing among top-3) as the most important service their agency or agencies will provide them this year, followed by digital marketing development/management (42.1%) and brand strategy (33.9%). Agencies also pointed to these as their most important services, but in a different order, with brand strategy (59.4%) topping the list, followed by digital marketing development/management (56.4%) and creative (55.4%). Notably, agencies (51.5%) were far more likely than marketers (19.8%) to say that marketing strategy was one of their top 3 most important services offered, an interesting result given 2013 research suggesting that strategic insights are crucial to agency selection.

About the Data: The 2016 RSW/US New Year Outlook survey was completed by 165 senior level Marketers and 115 Marketing Agency executives during December, 2015. The agency sample came from the RSW/AgencySearch database of over 5,000 marketing service companies in the U.S. and Canada ranging in size from under $5M in capitalized billings to over $100M. The disciplines of each Agency varied from full service advertising, to digital, to PR, to marketing consultancies. The marketer sample came from the RSW/US database of over 100,000 marketing decision maker contacts in the US and Canada. Company size, location, and size varied.