Many are wondering about the future of agencies. The web was a huge game-changer and agencies never quite adapted. Agencies are losing market share and creative work is being pulled in-house. The agency model is anachronistic at best, and in many cases downright broken.
So what’s the trouble with big agencies?
First and foremost, agencies are set up to make ads. It’s not in the agency DNA to take advantage of the disruptive forms of media available today.
Modern advertising developed with the rise of mass production in the late 19th and early 20th centuries. From the industrial revolution up through the mid 1990′s, brands enjoyed a one-way communication channel to consumers via ad agencies. For decades the execution was limited to print, TV and radio. Those are now the minority of channels, and favored by aging demographics. The reality is, agencies no longer own the connection between brands and people.
The agency process for generating creative is out-dated and doesn’t suit today’s brand landscape. The process is a non-collaborative, top-down water fall from ‘Concept’ to ‘Execution’. The gatekeepers of the concept are often incognizant to the possibilities of web, mobile and social, bringing me to my next point…
Digital is an afterthought. During my own short time at a big global digital agency, the Executive Creative Director had zero digital footprint — not even a LinkedIn account. As Seth Godin recently pointed out: “It’s not enough to be aware of the domain you’re working in, you need to understand it.” Yet there remains a genuine lack of curiosity about digital at the executive levels of many agencies.
Lack of diversity hobbles creativity. So does a toxic culture. It takes forward-thinking, diverse teams to make compelling creative. Yet big agencies are notoriously homogeneous with a well-known dearth of female creatives. The environment is often cutthroat and burnout is built-in. Culture matters.
Talent isn’t king. Agencies are 5% creative muscle and 95% tacticians. Brands will spend most of their time speaking with a Client Partner who is neither. Before brands sign on an AOR, they see the work created by the 5%. Is the A-team talent on your account? Unless you command a sizable chunk of the revenue, the answer is “no”.
Money burns. Brands foot the bill for the broken process and culture. Instead of a diverse, passionate group of bright minds playing off the strengths of each other’s disciplines, there’s instead built-in disconnect between disciplines that must be bridged.
Where does this leave big agencies? On the way out. It’s challenging to imagine a reinvention of the model from within agencies. There’s just too much baggage.
There’s an alternative to the big AOR. Smaller teams that live digital and collaborate between disciplines are better set up to execute in today’s world. With smaller teams you get a direct line to the creative talent, and an honest read on the work and culture. These smaller teams may outsource media buying, but so what? If they make meaningful connections to your customers what does that matter? The truth is, the big agencies are farming out the digital, mobile and social initiatives to them anyway.
More reading on this topic:
Who says the future needs an advertising agency?
The Agency of the Future