The state of marketing agencies
I am the host of a Marketing podcast called ‘Everybody hates your brand’ which covers everything from CRM to Customer Experience to Brand to Behavioural Science.
I also interview some fascinating guests and in some cases, agency leaders. Whenever I have someone like this on, I like to ask the same question:
The agency model it seems is beset from all sides — from clients taking work in house, the large consulting firms moving into creative, the move from retainer to project work, etc. Given that context:
- have these started to impact you at all?
- if so, how are you fighting them?
I thought it would be an interesting exercise to pull together the varied responses I’ve been given. Here’s how the agency leaders we spoke to answered that question.
Role when interviewed: General Manager and Chief Strategy Officer of Havas CX Helia North America.
I think the the move from retainer to project speaks to me but I don’t know if it’s about fighting it for us. We’re finding a competitive advantage in it. It’s the size of the team but also recognising that we need to adapt the staffing model. We need to adapt the business model to really thrive in this project environment.
I think project work is the way of the future. When we think about what clients are in-housing, it’s a lot of those areas of expertise that they can rinse and repeat. Things that they can plug and play and and do kind of in perpetuity.
They are hiring us for projects because of the aggregate of our skills and experience and I think that that stuff’s really hard to bring in-house. It’s really hard to find a diverse team of people with these viewpoints after working on such a variety of different projects and clients.
So I actually think it’s a really interesting advantage that we bring to market and for me specifically coming from kind of that tech background I look at it as let’s convert projects into Annual Recurring Revenue (ARR). Let’s not think about retainers.
How do we think about annual recurring revenue in such a way that we’re not doing the same work next year that we did this year? And if we are doing the same work over year over year and we’re not really progressing them, then to me that that doesn’t speak to an evolution of a relationship that makes us really crucial to the to the business.
So I like the project model. I think it’s it’s definitely worked to our advantage and we’ve been able to adapt and pivot to to make sure that those projects do turn into ARR and that we’re able to grow alongside clients.
Role when interviewed: CEO of Catorce (14) in Barcelona.
I describe it as an industry that’s lost its mojo a little. I’ve started to feel like culturally, we’ve lost our edges that we can’t attract the most creative people. So therefore we’re a bit lacking in the magic you know?
There’s a conservatism that kind of strangely crept in and kind of made us a bit safe and lacking in confidence. Maybe even as a result of all this complexity.
Do we have a real expertise in that place? Are we kind of making it up and winging it? So I think our foundation got a bit wobbly and we started to compromise.
And so I’ve felt that we’ve kind of lost lost our energy, lost our spark as an industry and that’s been something that I’ve been really determined around. I think you can gain that back through your people right? If you’re attracting really varied types of people.
You know this is where diversity becomes kind of crucial. It creates a super creative experience and hopefully product. I’ve been really intrigued and surprised and impressed by the the creative ambition of clients in putting it into their own businesses.
You know we don’t have an ownership on creativity and I think when clients recognise its power and have a go at it themselves then I’m impressed by that because that’s a great ambition. And I think in some cases they’ve been more creative and more successful at that than some agencies.
It just proves if you make that a real choice i.e. Creativity — that no matter what business you’re in there are benefits to creating the conditions for that to happen.
I don’t think there’s any right or wrong way. I just believe that to be genuinely creative you need to take risks. You need to have a culture that allows that to happen. You need different points of view. You need to collaborate.
Role when interviewed: Managing Director — Australia for Track Customer Marketing
The big change has been how we work with clients. So agencies used to be this black box where the magic happened and clients would throw briefs over into that box and expect a rabbit to pop out.
Now the way we work with our clients is so different. We’re forming agile teams that we’re a part of and that our clients are a part of. So there is a lot of information and value exchange that happens through projects that we deliver together.
We need to be dynamic. We know that our clients aren’t going to work end to end with every department in our agency and every everything that we offer. They will pick and choose what they feel is lacking inside their business.
I think we help them to get to a transformative position a lot faster by leveraging off the experience that our people have working with multiple clients and multiple systems. And having a formula for getting it done.
So in short the big change has been embracing being an extension of our clients team. One of the key pieces of value that our clients get from working with us, or at least I hope a piece of value that they get from us, is the capability that they receive from their team as a result of working with us. It allows them to then replicate that on ongoing projects maybe with less help from the agency over time.
Role when interviewed: CEO and Co-owner of Armadillo — a CRM agency based in the UK
Those forces are definitely out there. We’ve seen a mixed bag. We’ve got clients that use different mixes of all of the parts of our proposition that we offer. Some of them use all of it. Some of them use this bit and that bit. I think part of the key to that for us is developing an operating model that allows us to give clients all of it or bits of it that still works financially for us as well as delivering them with what they need.
I think being able to flex around what our clients are already good at is important. I don’t see the point in trying to sell clients a service they don’t really need.
Does being independent help with that flexibility?
It does because we still have the luxury of being able to work for clients where it’s just that the work is exciting and motivating.
But also, actually, I think we’ve worked very hard in the last year to make that model a lot more scalable because it does give us a competitive advantage in truth.
The Bottom Line:
A real range of responses from a real range of leaders. Largely driven by their ethos — whether someone borne in creative agencies like Nicole Taylor or tech like Liz Roche.
The future of agencies is ever changing and I’ll continue to ask this question where relevant. It’s certainly a fascinating and tumultuous time.
I am a Senior Marketing Consultant at with over 20 years of experience across both client and agency side specialising in CRM, CX and Loyalty. I have applied my knowledge across brands as diverse as Vodafone, McDonald’s, Volkswagen, Westpac, and GAME.