The Agency is Dead, Long Live the Agency

Posted: October 4, 2010 in Agencies, The Marketing Industry, Trends
Tags: , , ,

There has been a lot of talk over the last couple of years about how the “agency model is broken”. While a sexy headline for marketing trades, and a great scapegoat for clients, I find this phrase a gross misrepresentation of what has been happening in the industry.

Lovers Quarrels

First – there is truth to the client-agency relationship changing – often uncomfortably. Sometimes it is the agency’s fault for over promising, staffing non-strategic thinkers at the helm of account strategy, not fostering proper collaboration, not nurturing a culture of discovery and innovation – and sometimes the client’s fault for having unrealistic expectations, pushing agencies to do too much more with less, and not taking the responsibility to understand their own business better. But truth be told, the client and agency need each other and they both know it. Agencies need to learn how to say “no” and set realistic expectations of the new labor intensity, costs and resources required to accomplish the objectives of a client. This does fly in the face of the “old agency model” of saying “yes” first and figuring out how to execute and manage the work later. The recent resignation of the sizable Home Depot account by MRM is a a prime example of an agency forced to take a stand to ensure a profit from their work. I say kudos! Of course I don’t know if the account was improperly scoped in the first place (a common agency blunder in the over-eagerness to win an account).

MRM New York managing director Corey Mitchell wrote that “for reasons based on a fair exchange of services and a mutual inability to arrive at realistic expectations, we are choosing to walk away from our relationship with The Home Depot completely.”

Embracing Change

Undoubtedly, the only path to success on the client or agency side is to understand the seismic shift in the way we communicate with consumers,  the fragmentation of the distribution channels where we reach them, and the desensitization to marketing in general. Strategy used to be about the creative platform and how to inspire, motivate and tap into consumer passion. While these   creative and messaging objectives remain prerequisite components of an increasingly difficult task of  influencing consumers, the strategic emphasis has actually shifted to understanding how and where to reach consumers and the mechanisms  and marketing attributes that influence them. Agencies have been focusing on reintegrating services and capabilities – to a degree creating jacks of all trades, while they should be focusing on integrating strategic planning, analytics and modeling  while allowing for the growth of specialized units for the disciplines that are increasing in specialization. It’s not a silo’ed approach if the head (strategy & insights) and the tail (analytics and modeling) are driving and fostering collaboration. IPG just announced such a restructuring of their digital agency assets. Of course agency announcements and intentions sometimes vary from actual practice and proficiency.

The Good, The Bad & The Ugly

Since leaving the agency world in 2007, I have been working with Laredo Group, training agencies of all sizes, including some of the largest media shops in the industry. I have seen firsthand the challenges faced and how some agencies overcome these challenges while others struggle. Additionally, I have been consulting clients and agencies, including leading client  agency reviews and selections for clients of various sizes. Big agencies get a bad rap sometimes from pundits. I must say that I have seen some impressive agencies who are embracing  and leading the charge of change, innovation and growth. I have also seen a lot of complacency, mediocrity, arrogance with resistance to change, ignorance with a desire for change, and in a couple of instances, even straight up cluelessness. It’s tough running an agency when margins are being eroded by the complexities of the marketplace and the world is evolving faster than your staff can keep up with. It’s also tough for clients who are looking to lean on their agencies for thought  leadership and executional prowess when you keep hearing how the “agency model is broken” and agencies are the bad guys.

It’s All About The Talent

The Stylistics and Michael Jackson got it right – “People Make The World Go ‘Round”. An agency IS its people. The best agencies have developed a culture that attracts and retains top talent. To a client, agencies are as good as the weakest team members assigned to their account. This is often where the biggest perception of “broken” lies. Clients – be sure to request to meet the actual team assigned to your account before working with an agency. If already engaged with an agency, take the team out to lunch, get to know them better, empower them and make them want to kick ass for you. Often times they are unappreciated and overworked. But keep an eye open for the weaker links – hey, everybody has to learn sometime – just make sure they aren’t on your strategic planning or analytics teams!

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Comments
  1. Rich Edelman says:

    Big agencies just don’t get it. The agency model IS broken – how can you even defend these big inefficient agencies?

  2. Jason Heller says:

    Rich, making a blanket statement like that is akin to a stereotype. Sure there are some big agencies that are inefficient and not digitally proficient, but there are plenty of digital agencies that I can same the same thing about. The client-agency relationship needs improvement – some on the agency side and some on the client side.

    Truth be told – big agencies used to fit the stereotype that you put them in. Many years ago. Since then, many smart people have climbed the ladders and now there is experience and talent at most of the big shops. However, to a great degree, the level of work a client receives comes down to the individual team members on their account. Every agency has A, B and C teams, so to speak. Of course the process, hierarchy, tools,s system and supports infrastructure also play into the equation. That said, there is also an argument that a big agency has more resources and more technical capabilities than smaller, nimbler, and leaner shops that simply don’t have the resources.

    It can go both ways…

  3. Jeff Holly says:

    Both good points. As someone on the client side, I will also point out that often the size of the account is what determines the outcome of the relationship. Smaller clients get handled by junior staff who lack the experience. It’s a rock and a hard place for any but the biggest clients who can spend enough to keep their agency’s attention. It can be frustrating. On one hand our budgets are big enough and campaign difficult enough for us to outsource to an agency, on the otherhand the better agencies seem to either not want our business or hand it to their C team as you accurately pointed out.

    • Jason Heller says:

      Unfortunately that is a tough spot to be in. It all depends on the definition of “small” versus “big” budget – and the labor intensity of the account. One man’s trash is another man’s treasure. Depending on the budget you may be able to find a smart nimble agency who is willing to give you the service you need. There are also many consultants and freelancers out there. Email me if you want to discuss, I may be able to point you in the right direction jason-at-jasonheller.com

  4. Tom Cunniff says:

    Having been both agency-side (as employee and owner) and now client-side, it’s clear to me why there’s so much dysfunction.

    Too often there’s a mutual lack of trust, respect and loyalty. These three things are fundamental to any relationship. When they’re missing, there is no relationship — there is only a series of transactions.

    Marketing today is far more complex and requires more strategic rigor than ever. Clients need serious talent on their business, but — they also must be willing to pay for that talent.
    And agency personnel need to understand that their individual specialty — no matter what it is — is NOT the center of the universe. It is part of an overall mix of specialties that are needed to make communications work. Less arrogance and more service-orientation are both sorely needed.

    Today agencies and clients need mature leadership. But too often, we are only willing to pay for inexperience on both sides. We are getting what we fail to pay for.

    • Jason Heller says:

      Hey Tom – Great to hear your perspective.

      “Too often there’s a mutual lack of trust, respect and loyalty. These three things are fundamental to any relationship. When they’re missing, there is no relationship — there is only a series of transactions.”

      So true and unfortunate!

  5. Warren says:

    Hey Jason

    This made for a very good read (and subsequent discussion) as I’m about to issue an RFP for an agency. I’ve had the benefit of working with both large and small agencies and what has always made an impact on me is the passion that they’ve shown for the account – I guess I’m lucky in that respect. But you’re so right to raise the unrealistic expectations that some clients have when it comes to their agency. The true “partnership” would be achieved when both sides constantly communicate and strategize instead of one requesting a “job” and the other “delivering” – both parties must be able to manage expectations and keep each other in check.

    • Jason Heller says:

      Hey Warren –

      Great to hear clients chiming in on this! The concept of both client and agency approaching the relationship with the intention of a true partnership is the starting point for “the agency model” not being broken.

      Passion, as you point out, is definitely an attribute that you want in your agency. It must ooze from the culture – from management on down to the day to day teams that are working behind the scenes. Of course I’d point out that their are plenty of passionate agencies that lack the strategic proficiency in certain vital areas. But generally with true passion on the management level comes an agency product that strives to exceed for their clients.

      Today’s business climate puts a lot of pressure on both sides, but I think that agencies have been marginalized and almost commoditized over the last 5-10 years. I sometimes wonder if the era of the client-agency partnership of yesteryear is gone for good.

      Good luck with your RFP process. Feel free to reach out if you need some help on the digital side of things!

  6. Scott Paley says:

    “The level of work a client receives comes down to the individual team members on their account.”

    This is exactly right and I expanded on this very point here – http://blog.abstractedge.com/2010/07/do-you-know-whom-youre-sleeping-with/

    I also think Tom hits on a key point in the comments.

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