Buyer Behaviour in Advertising Industry

Executive Summary

In the advertising industry, the agency-client relationship recognises the association between an advertising agency and their client. The nature of this service is a high risk and high involvement purchase which makes the information search a crucial element of the buying process. Understanding the drivers of this buying behaviour will enable the agency to become more responsive to their clients needs and tailor their services to positively influence the relationship. The foundations for a successful agency-client relationship rely on understanding:
1. What are the key drivers of successful client retention?
2. Are these in line with the key success factors for new client attraction?
In response to answering these questions, our report aims to investigate segmentation and buyer behavior within the advertising industry.

The selection and retention criteria of advertising agencies can be described by three distinct elements:
1. Relationship Management: the chemistry between the client and agency and quality of account management.
2. Service Delivery: Technical and creative experience and the quality of the output.
3. Cost Management: Ability to manage client budget and justify spend through added value.
Using these key elements, an analysis of the frameworks discussed by Waller (2004) and Triki, Redjeb & Kamoun (2007) three viable segments have been identified and the concepts of these articles have been applied to gain a greater insight into their buying behaviour processes:
1. New Client, New Task: Agency Selection  Relationship Development  Agency Review/ Termination
2. Existing Client, New Task: Agency Evaluation  Relationship Development & Maintenance  Agency Review/ Termination
3. Existing Client, Existing Task: Agency Reselection  Relationship Maintenance  Agency Review/ Termination

The best determinant of agency-client success across the three segments was the relationship development and maintenance

References: Cunningham, M.T. (1986), “The British approach to Europr”, in Turnbull P.W. and Valla, J.-P. (Eds), Strategies for International Marketing, Croom-Helm, London, pp165-203 Cunningham, M.T Ghosh, B.C., & Taylor, D., (1999), “Switching advertising agency – a cross country analysis”, Marketing Intelligence & Planning, vol. 17, no.3, pp140-146. Grayson, K., & Ambler, T. (1999). “The dark side of long-term relationships in marketing services”, Journal of Marketing Research, vol. 36, no. 1, pp132-141. Neff, J. (2007). “‘Broken’ ad model holds big advantages for P&G”, Advertising Age, vol. 78, no. 10, pp1-2. Schiffman, L., Bednall, D., Watson, J., & Kanuk, L Triki, A., Redjeb, N., & Kamoun, I. (2007). “Exploring the determinants of success/failure of the advertising agency-firm relationship”, Qualitative Market Research: An International Journal, vol. 10, no. 1, pp10-27. Waller, D.S., Cusik, D.J., Matheson, H.D., Miller, M.K., (2001), “Advertising agency activities used to attract new clients in Australia”, Journal of Business & Industrial Marketing, vol. 16, no. 2, pp. 129-140. Waller, D.S West, D.C., & Paliwoda, S.J. (1996). “Advertising client-agency relationships; The decision-making structure of clients”, European Journal of Marketing, vol 30, no, 8, pp22-39. Wilson, D.T. (1987), “Mergind adoption process and organizational buying models”, in Wallendorf, M. and Anderson, P. (Eds) Advances in Consumer Research, Association for Consumer Research, Vol. 14, Toronto, pp. 323-6.