Determinants of Client Commitment in Advertising Agency-Client Relationships

Previous research on advertising agency client relationships has focused on specific outcomes (relationship termination) as opposed to the underlying exchange processes. The authors extend theory and empirical findings on inter-firm commitment by testing a model that examines how agency behaviors (accessibility and assertiveness) and client behaviors (accessibility and indecisiveness) influence the working relationship (productive interaction and conflict) and agency performance that, in turn, influence client trust and commitment. Survey data collected from 194 advertisers show that agency anJ client relational behaviors influence productive interaction, conflict and creative quality-implementation. Results further indicate that creative quality-implementation increases client trust and commitment. Trust and productive interaction also increase client commitment, whereas conflict decreases client commitment. INTRODUCTION The term “relationship marketing” has been used to suggest that commitment and trust operate in a broad array of exchange relationships (Morgan and Hunt 1994). These include supplier, lateral (competitors and governments), buyer (intermediate and ultimate customers) and internal partnerships. While the need for firms to engage in relationships with committed business partners has been a major theme in the channels literature (Anderson and Weitz 1989, 1992; Ganesan 1994; Morgan and Hunt 1994) few studies have examined a firm’s other important exchange relationships. Bucklin and Sengupta’s (1993) study of co-marketing alliances and Moorman, Zaltman and Deshpande’s (1992) study of research provider-user relationships represent pioneering research on some of the many important exchange relationships for a firm. In a similar vien, we look at advertisers’ relationships with their advertising agencies. Despite concern by agencies and clients for relationship performance and continuation (Brandweek 1992; Michell 1987) highly visible relationship outcomes and considerable marketing expenditures, surprisingly few studies have examined advertising agency client relationships. Existing research on advertising agency client relationships focuses on the dysfunctional behaviors (Hotz, Ryans and Shanklin 1982) and reasons for relationship termination (Doyle, Corstjens and Michell 1980; Michell 1987; Michell, Cataquet and Hague 1992) with little attention to the processes underlying successful on-going relationships (Wackman, Salmon and Salmon 1986). When client satisfaction has been the focus, satisfaction has been attributed to either superior agency creative performance (Verbeke 1989) a amicable working relationships (Wackman, Salmon and Salmon 1986). The first purpose of this study is to expand understanding of interfirm exchange relationships by focusing on client commitment and trust in relationships with advertising agencies. Specifically, client commitment and trust is proposed to be determined by both agency performance and the working relationship. The second purpose of this study is to empirically test the influence of several agency & client behaviors on the working relationship and agency performance. Most of the previous studies of business relationships have emphasized only one participant’s behavior as responsible for the outcomes experienced. For example, Crosby, Evans and Cowles (1990) show that sellers’ relational behaviors increases relationship quality in services selling. Similarly, &mar, Scheer and Steenkamp (1995) show that manufacturers’ efforts to use fair procedures and achieve equitable outcomes increases distributor commitment and relationship quality. In the context of advertising agency-client interactions, it seems likely that client behaviors will affect the relationship (Hotz, Ryans and Shanklin 1982). Unfortunately, very little empirical research has addressed the consequences of client behaviors. Evidence that clients are partially responsible for poor agency performance and working relations may not be welcomed by some clients; however, it likely to appeal to clients interested in maximizing agency performance. The paper concludes with a discussion of the results as they apply to agencies, clients and future research. CONCEPTUAL FRAMEWORK We begin by defining client commitment and trust. We then discuss the influence of agency performance and working relationship on client trust and commitment. Then, agency and client behaviors are hypothesized to influence agency performance and the working relationship. Figure 1 illustrates the relationships between the constructs examined in this study. ____________________---Insert Figure 1 here ____________________---Client Commitment and Trust The commitment-trust theory of relationship marketing suggests that commitment and trust