Agencies and advertisers in an unhappy marriage

As if life on Madison Avenue is not challenging enough, the results of a widely followed annual survey show that many aspects of the relationships between agencies and their advertiser clients continue to be rated at or near historic lows.

The survey, to be released today, strongly suggests that significant differences still prevent advertisers and agencies from working together more productively. That is a concern because campaigns created when both sides trust, respect and understand each other tend to be more effective in selling products, and help to dispel perceptions among marketers that the money they spend on advertising is wasted.

"This has not been a great year," said Nancy L. Salz, president of Nancy L. Salz Consulting in New York, which has sponsored the Salz Survey of Advertiser-Agency Relations since 1986.

"A lot of the major indicators are down and it's a struggle to get them to improve," she said.

The results "are a real reflection that the industry is in a huge state of flux," Salz said, as advertisers and agencies scramble to keep up with the seemingly continuous changes in consumer behavior, media choices and categories ranging from automobiles to packaged foods to telecommunications.

Even so, "as different as things are becoming," Salz said, "this is still about an old-fashioned concept, people communicating with people." And "there's still a huge opportunity to improve sales just by working better together," she said.

When advertisers were asked in the survey to predict the effect on sales if their agencies were always able to do the best work possible, the respondents estimated an increase in sales of 22.4 percent. While that was somewhat lower than the response to the same question last year, when the advertisers estimated a sales gain of 23.7 percent, it is still higher than the response in 2003, 20.8 percent; and 2002, 20.4 percent.

But the survey indicates a widening gap between the two sides.

When asked to assess the level of teamwork that exists in their relationships, 59 percent of the advertiser respondents said there was more teamwork but only 25 percent of the agency respondents agreed. That gap of 34 percentage points is the second largest since the survey started, behind only a 35-point gap in 1992, the first year the questions were asked.

When advertisers were asked whether there were more, fewer or the same amount of hassles (to use the survey's term) in the relationships with their agencies, 35 percent of respondents said there were more. It was the highest that number has been since the survey began asking that question in 1998.