Marla Kaplowitz has spent a long career at ad agencies, and now as CEO of the 4A’s (American Association of Advertising Agencies), she is helping her members navigate the constantly changing agency world. She sees her role as ensuring that agencies remain relevant, compete successfully, and have the resources to flourish. Today, she anticipates how events in 2024 will impact the business, interprets the milestones of the past year, and shares several insights from critical 4A’s research and recent reports.
She believes that 2024 will be a year of “discovery and exploration”— not only through the continued investment in technology, but in new business models and even sustainable behavior.
From regulatory concerns and measurement challenges to the risks and rewards of Gen AI, Marla easily balances agency needs with their achievements. For example, she understands issues regarding talent and training from both her years of experience and from listening carefully to her members. As a result, she believes that clients need to better understand how to manage agencies to encourage their best work, while agencies would do well to develop their middle management to drive innovation, teamwork, and staff longevity.
A CODE OF CONDUCT
A passionate advocate for the value of ad agencies, she is not afraid to place some blame on the marketer. Under the category of what she calls, “Clients Behaving Badly,” she cites how client-agency relationships were particularly strong in 2020 and 2021 as teams joined together during a global pandemic; however, she says, “the after-effects are now pushing behaviors to the opposite end of the spectrum.”
She has called for a Code of Conduct, so that clients and agencies can align on expectations, behaviors, and shared ethics.
THE COST OF THE PITCH
An outgrowth of better understanding the dynamics of client and agency relationships was a 2023 milestone for both the 4A’s and the ANA. The two organizations combined forces to uncover the real impact of agency pitches and reviews in new research called The Cost of the Pitch.
While both organizations understood that there were tangible costs to new business pitches or to the defense of an account in review, there was little information on the exact dollars and cents. After 300+ interviews with US-based client-side marketers and agency executives, The Cost of the Pitch proved that the expense to both marketers and agencies is significant.
- An incumbent agency spends, on average, over $400,000 to participate in a revenue.
- Interestingly, clients also spend roughly that amount to conduct a new review.
- Remarkably, if a pitch has three finalist agencies, the average cost of a review is around $1 million.
These numbers do not account for the work disruptions, campaign delays, and time-consuming process of all involved.
There will be a follow-up to The Cost of the Pitch report to be released this spring that will focus on cost/price vs. value and the benefits of long-term relationships.
To learn more from Marla Kaplowitz and her perspectives on the current state of the ad agency business and how the marketing industry needs to move forward in 2024, watch the video interview on Internationalist Marketing TV (IMTV) on YouTube by CLICKING HERE.
In our conversation, we discuss the following:
- Would you outline what you see as the greatest strides agencies have made recently?
- The 4A’s Cost of the Pitch Report made headlines last year. Would you talk about it and some of the results you’ve seen?
- Without doubt, there’s been a lot of personnel changes in agency management. Many marketers also talk about the greater need for talent both on the client side as well as the agency side. Do you agree? And how does the 4A’s help?
- One can’t have a conversation about today without mentioning two letters— AI. Do you have any comments on Artificial Intelligence—in terms of how it may relate to advertising, creativity, procurement, or other aspects of data…
- What are the most urgent items are on your 2024 agenda?
- How would you characterize client-agency relationships now?
- Jared Belsky’s latest book, You Get the Agency You Deserve, states that “Marketers are unwittingly causing their own destruction. The 18-month average agency tenure triggers an economic destruction that few executives appreciate or understand how to solve.” That is a powerful statement. Do you think he’s right?
- If you had a wish list for the industry and limitless budgets, what would you do?
- Do you think the role of agencies has changed in our post-COVID world?
- Is there a word or phrase you believe will characterize the coming year?
Bringing over 30 years of industry experience in marketing, media and communications, Marla joined the 4A’s (American Association of Advertising Agencies) in May 2017 as the President & CEO to help define and shape the future focus for the association. Under her leadership, the 4A’s works to improve the health of the industry through the power of collective experience, expertise, and impact to help empower success for its members across business transformation and talent needs.
Prior to joining MEC (now Wavemaker, part of WPP) where she was CEO of North America from 2011 – 2017, Marla spent 12 years at MediaVest (now Spark Foundry, part of Publicis). She began her career at DMB&B before moving to Ammirati Puris Lintas.
Marla serves as a director on the Board of Penn Entertainment and is the Committee Chair for the Nominating/Governance Committee and a member of the Compensation Committee. In addition, she is a member of several non-profit Boards including The Ad Council, BBB National Programs (includes Audit & Finance and National Advertising Review Board Committees), Digital Advertising Alliance (DAA). Trustworthy Accountability Group (TAG) and MediaVillage.