It’s no secret the agency business model is in disarray. Brands are investing in digital media, marketing and content more than ever. This means agencies need to adapt much quicker.
Digiday spoke with a brand planning director at a creative agency in the United Kingdom about how the agency business model breeds inefficiencies and how more established agencies promise everything under the sun and frequently fail to deliver.
Where are you seeing the biggest inefficiencies at agencies?
There are lots. Many start at a strategic level, with leaders who are living examples of the Peter Principle – promoted one level beyond their competence. This leads to poor business planning and unrealistic goals. This is often compounded with poor senior hires. As hiring people is a specialist skill, there’s no logic in thinking people who’ve never had to make senior hires are going to be able to do so.
But account management is the killer, mostly. I see a lot of agencies who’ve bought into rhetoric about “we shouldn’t have a head of X. Those skills should be ubiquitous.” So they’ve got rid of the specialists but then not done anything to either their training or recruitment programs to compensate. As a result, they employ generalists or people with limited skills who are then asked to execute specialist activities.
And the result?
They then either spend a large amount of time researching how to do something or just do a poor job. This leads to bloated time allocations to jobs, which effectively means the client is paying well over the odds for a substandard job.
Are agencies in trouble of being disintermediated?
They should be more than they are. The only way to disintermediate agencies from the marketing process is to have an effective in-house marketing department – and while some companies may manage this, many will not.
Are old school agencies doomed to irrelevance?
I wish they were. But old school marketing still has its place. TV ads still deliver for the right project, as does direct mail or CRM programs. Where it goes wrong is when those kind of agencies think they are now, say, “digital” because they made a load of money resizing press ads into banners.
Then what happens?
Then they use old-school thinking to direct digital projects, things like starting a website build with a creative brief or thinking “build a microsite” is a purely executional instruction. You either end up with beautiful-looking websites which don’t do anything or websites that have a dreadful user experience because nobody knew that would be an issue.
Then they say “we can do that” to every client request. Blogger outreach? Community management? Persona development? Sure! How hard can it be? And we’re back to clients getting ripped off for substandard delivery. I could name a very large company who are currently paying top dollar for expert community management across multiple social presences. It’s being done by a single intern with precisely zero experience.
Whether or not they become irrelevant is down to two things: either they realize they’re terrible and change or the client realizes they’re terrible and changes agency.
Thoughts on media agencies?
I try and stay away from media agencies — don’t know about your side of the pond, but over here they are the worst of the lot. They should be all about buying real estate cheap, but they make such a fuck ton of money out of it they feel the need to “add value” with all kinds of BS.
I especially love their two-hour econometrics presentations. The one variable the software can’t compute? Whether the creative is any fucking good.
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