Andy Penfold
Andy Penfold 11 February 2018

Efficient and effective – fixing the broken agency model

Recent research from ISBA has found that nearly two thirds of advertisers are shifting towards stronger relationships with fewer suppliers, favouring agencies with a broader scope of services.

Andy Penfold
Andy Penfold 11 February 2018
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Recent research from ISBA has found that nearly two thirds of advertisers are shifting towards stronger relationships with fewer suppliers, favouring agencies with a broader scope of services.

Over two thirds are frustrated with how long it takes for agencies to deliver. There is a clear desire for greater speed and agility, improved cost efficiencies, collaboration and operational control.

Taking all of this into consideration, it’s no surprise that just under half of brands now have, or are thinking about establishing, on-site or in-house capabilities.

We are seeing the rise of the onsite creative agency; with ‘in-house’ no longer being viewed as ‘second rate’ by default. This represents a significant shift in the dynamic of traditional brand-agency relationships.

There is a broadly held belief that in-house is cheaper. After all, why pay an agency to do something you could do yourself? But the critical question is whether you can effectively deliver your marketing strategy with what is likely to be a limited pool of local resource and talent.

Brands need to carefully consider what aspects of their marketing they have the skills and resource to manage themselves, versus where they would benefit from external support.

 

The need for speed

Technology has given us the tools to go from idea, through design and production to deployment, quicker than ever before. But as a result, marketers feel under pressure to deliver faster, looking to adapt campaigns as soon as insight is gathered.

As such, more and more brands are weighing up the potential of, and are choosing between, either an on-site or an off-site agency model.

 

In-house, on-site or off-site?

We are seeing a polarisation in approach around which model is best – local, or external and centralised. However aren’t we missing an obvious point? Surely there’s validity in, and learnings to be had, from both?

By way of example, the study states that its agency partner’s approach of ‘building and operating on-site agencies is its sole business model’. Whilst the full service ‘one-stop marketing shop’ on-site is genuinely appealing – a ‘better inside’ strategic conceptual agency integrated with your business and brand in your own building – the question remains: are you really going to be able to attract and retain the best creative and planning talent?

Since they’re often isolated in a regional location within a relatively small on-site team, are they staying creatively fresh and motivated? And are these high-value roles going to be fully utilised on-site every day? Surely only leading global brands with extensive and wide ranging marketing communication volumes are going to have a fighting chance of sustaining such a model, such as Omnicom and McDonald’s ‘Unlimited’ project?

We’re not talking about challenging a brand’s lead agency relationship, we’d rather work collaboratively. The fact remains that traditionally below-the-line agencies are charging inappropriately high rates for design ‘implementation’ and production – despite such activities being neither their primary focus nor their specialist skillset.

Many lack the investment in production technology to reduce risk and increase speed to market, which also means the client sees their production activity as fragmented. This then restricts visibility and decreases efficiency and brand control.

What if brands could reap all the benefits of both approaches? Seamlessly combining those on-site teams with more substantial hubs would harness the inherent benefits of both models whilst also nullifying weaknesses.

 

An alternative approach

It’s perfectly possible to achieve this through the adoption of new ‘hub and spoke’ methodology – a model providing on-site teams backed up by dedicated and shared off-site agency resources. Brands get the immediacy and intimacy of an in-house team with flexible and agile access to an extensive agency skill set.

An on-site team offers dedicated, focused resource, and integration with the brand’s marketing teams allows for the absorption of expert brand knowledge. With your agency metres (not miles) away, closer communication leads to more ‘right first time’ results.

The agency ‘hub’ overcomes the challenges experienced by on-site teams, giving flexible access to a broader range of skills, experience, services and technology, whilst helping to maintain creative ‘freshness’.

Importantly, it also mitigates the level of risk associated with a smaller, isolated team, helping avoid single points of failure and narrow pools of brand knowledge. The model fully accommodates the peaks and troughs of a brand’s varying workload over increasingly short timescales.

 

Step into the future

AAR believe that ‘the current model is creaking around the seams, if not already broken’. Continuing to deliver what clients need means agencies have to evolve in the way they work. It is unrealistic to expect the client-agency model to remain static – agility and flexibility are the new ‘musts’.

All said, there are exciting new models emerging, and at KMMS we’re working closely with our clients, implementing and continually developing these models, offering brands increasing effectiveness, efficiency and savings on a global scale.

For any brand, this emerging way of working is worthy of investigation – after all, forging the right partnership could be transformational.

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