At the end of last year, the Association of National Advertisers reported that 35% of marketers have already brought in-house programs, a dramatic increase from the 14% reported in 2016 And this is only a beginning. Marketers are turning to a multitude of services, once assigned to their agencies: social media marketing, data management, strategic planning, message development, purchasing and media planning.
Right under our nose, it seems that the brand / agency relationship has undergone a complete transformation. What is going on? And is it a good development?
What motivates the interest?
To find out, I’ve spent the last few months talking with many brands and agencies, and we can say that we are experiencing a seismic shift in the ecosystem of marketing. As a result of these changes, brands and agencies follow two different paths.
Once, marketers have fully trusted their agencies and considered them essential partners in their success. Today, they are more likely to question the value that they get from an agency. However, many have no strategy to evaluate the real value they receive – because they have so many other critical things on their plate that they choose to leave the relationship. quiet, mainly because they do not see the value of fixing it either. There are exceptions, of course.
“The big agencies are doing their part by making the transformations of their operating structures necessary … However, brands must also change the way they engage in order to take full advantage of these changes.”
Agencies, meanwhile, wanting to maintain their business, surprise brands by positioning themselves as a one-stop solution for all their operations. This lets the traders scratch their heads. Marketing, advertising, ecommerce, and customer service are now under the trader’s bailout and, as a result, have become much more complicated than they once were.
This complexity further hampers the ability of brands to manage the relationship. This vicious circle has no end. No wonder marketers are skeptical of the demand for a one-stop shop. And this, in turn, leads them to wonder: what exactly is my agency? Without a clear view of the strengths of a given partner, marketers simply do not know how to insert their agencies into their internal workings.
In addition, the messages they receive from the industry in general are pretty clear: do more yourself. Technology makes it possible to bring everything in-house and give brands greater control over their operations and data. It’s a powerfully seductive message that’s hard to refute.
I’ve also talked to many marketers who feel that their agencies are too far ahead of them, offering new features like people-based marketing, customer-centric advertising and more. Other next generation ideas for their organizations.
This is a thorny problem because you will not find a marketer who does not want to put his customers first and develop his operations by proposing individual assignments. But these strategies require a fundamental change in the way their organizations operate, not to mention the technological investment, which all involves great risks. Marketers have the impression that their agencies do not really appreciate these risks.
Do agencies still offer value?
All these questions led the trader to believe that the agencies are no longer useful or useful. In my opinion, it’s completely wrong; marketers need agencies as much as ever, more so, in fact. But we must recognize that technology has profoundly changed the world, and this has changed the relationship between marketers and agencies. This means that the relationship must evolve to make it more compliant with today ‘s complex marketing ecosystem. “
Talking with Warren Zenna, EVP and Managing Director, NA at Mobext (Havas), he said: “The big agencies are doing their part by making the necessary – and in some cases late – transformations of their operational structures. However, brands must also change the way they engage in order to take full advantage of these changes – it is not enough for us to make adjustments. “
Many brands have hired agencies in the hope that they will correct this misalignment, but they will be frustrated when they realize that they are ill-equipped to take full advantage of this that agencies have to offer. That ‘s the dilemma I’ ve heard over and over again: I spend a lot of money on agency services, but I’m not sure I ‘ve got any value . But I did not take the time to think about the best way to use an agency, especially because I do not know where to start.
Marketers believe that the proper response to this misalignment is to take more and more marketing funnel internally, rather than evolve the relationship. But I propose that the best result is that the relationship between brands and their agencies evolves.
How to change the brand / agency relationship
Here are three ways I believe the relationship must change:
- Marketers must (and agree) that they can not do everything themselves and determine a division of labor that suits them. But accepting the role of an agency as an integral part of its marketing and advertising operations means that marketers need to trust their partners again. The key here is for each brand to determine what to keep and what to give. This is a very custom process because each brand has its own vertical and horizontal characteristics.
- For this to happen, agencies must evolve from the one-stop shop and be honest with marketers about what they are good at and where they can add value and differentiate themselves. The fear of a mission shift is real, and one often seeks outside counsel when there is a demand for specialized skills versus a set of skills encompassing everything.
- Brands need to better understand the new landscape in order to extract the right kind and good value from their agency relationships. There has been a lot of consolidation among the agencies, and many have emerged as leaders in specific disciplines. It’s up to marketers to know which ones offer the expertise they need.
The reality is that agencies will not disappear, and brands will still need to work with them. It does not make sense to bring the entire life cycle of advertising and marketing under their roof, and even if that was the case, where would they find all this staff to lead the operations? Rather than undertaking costly initiatives, marketers should have frank discussions with their organizations and determine how they could work better together.
The future state of the brand / agency relationship
What does internal brand transformation look like? As agencies continue to consolidate and become more transparent about their strengths, marketers can make better decisions about which tactics to follow internally and which ones to outsource. Understanding this division of labor will allow senior brand managers to hire and retain the best talent that clearly fits the needs of their internal team.
And most importantly, I predict that as the relationship evolves, advertisers will have a more holistic view of what is happening in their departments and will be better equipped to demonstrate the value that they bring to the superiors. The leading agencies will be those with a clear value proposition.
The evolution of the brand / agency relationship may require mediation, but I believe, from my experience and the conversations I’ve had, that it’s within range of hand.
The opinions expressed in this article are those of the guest author and not necessarily Marketing Land. The authors of the staff are listed here.