ADVERTISER PERCEPTIONS OF FAIR COMPENSATION, CONFIDENTIALITY, AND RAPPORT

Advertising agencies have witnessed a steady erosion of their share of their client's marketing budgets over the past 20 years. In shifting their budgets away from advertising agencies, clients are indicating t hat full-service agencies cost too much for the market impact they del iver. This paper explores how advertising agencies can use client serv ice to strengthen agency-client relationships. Specifically, this stud y shows how advertising agencies can improve client perceptions of fai r agency compensation, agency confidentiality, and rapport by behaving cooperatively and attending diligently to problems that arise within their relationships. Alarmingly, when the client observations of agenc y service were compared to the perceptions of their advertising agency , rather large discrepancies were found. The risk seems to be that, wh ile there are numerous ways agencies can improve their relationships, many agencies may incorrectly believe that they are already doing a su perb job.