China’s marketers have the world’s shortest relationships with their agencies due to their partners’ poor digital capabilities, a new report by R3 has found.
According to the consultancy firm’s biennial Agency Scope Study, the average agency relationship lasts just 2.9 years. At the same time, clients are increasingly turning to ‘all under one roof’ agencies and reducing the number of roster partners they work with.
Marketers are currently working with 5.84 communications agencies, down from 6.45 in 2016 and 8.2 in 2014, the report stated.
Digital accounted for 40 per cent of marketing and communications investments for Chinese marketers, rising dramatically from 2016 when it formed just 25 per cent of marketing budgets.
The study, which covered more than 400 senior marketers and 740 agency relationships, also showed an increasing propensity towards working with locally-honed agencies, as opposed to legacy networks.
Asked about the reasons for working with local players, nearly 60 per cent of marketers cited quick response time as very important, followed by strong execution, simple and flexible structure and more localised insights.
“Chinese consumers are very digitally savvy, and their desire for brands that are equally as savvy is driving digital marketing budgets up every year,” says Sabrina Lee, managing director of R3 China. “This trend is posing unique challenges to both marketers and agencies alike, as they have to quickly adapt and build up the capabilities that will help them to meet the consumer demand.”
In addition, local brands are becoming more admired by China’s marketers, with brands like Alibaba and Huawei sitting alongside Coca-Cola in the country’s top three most revered brands.
“It’s clear that building a marketing career in China is not something that’s the exclusive domain of multinational brands,” Lee added.