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July 7, 2015
The Relaunch of the Agency Model
 
There is no doubt that agencies are facing a hostile environment. Agencies not only need to prove why they are needed, but they also need to perform on a higher-than-expected model in order to prove their value.

Not an easy position to be in.

The question is, then, what can the agency do to provide the value needed to convince brands that they are viable and necessary partners?

We can suggest three potential arguments for the revamped agency model.

1. Expertise
2. Speed of Cycle (concept to execution)
3. Economies of Scale

Expertise
Agencies were initially created because newspapers and magazines, in the beginning, did not allow brands to run the same ad in more than one issue. The agencies assisted in creating multiple ads and helped with the placement.

As you can see, the model that was followed in the 1800s has not changed that much.

Agencies have a wealth of expertise that can be used in creating ads and campaigns and much more. Informed opinions of market trends, consumer thinking, market strategy, and product development can come of agency personnel. Use the agency not just as a content machine, but as a think tank, too.

Speed of Cycle
Typically, brands outsource material when it can be done better or faster than keeping it in-house. Agencies have, in general, not delivered well in this area. With the promise of more agile business practices, agencies can turn this negative into a selling point once again. Sometimes marketing departments can get bogged down with other materials, or simply don't have the manpower to orchestrate a worldwide campaign, and need an extra hand in taking the campaign from conception to  execution.

Agencies also have the ability to create a streamline for different campaigns. They can be extremely effective and efficient. Let's bring those best practices back.

Economies of Scale
This argument lies beneath our advocacy for the AOR model. When a strong partnership is built between an agency and a brand, the partnership can benefit all parties involved.

The brand has a clear indication of the costs involved and does not need to waste time interviewing multiple agencies for different activities and trying to piece together a cohesive creative vision. The agency has a consistent stream of revenue, which means that it can dedicate a special team or department to the brand, which will create a consistent look and feel for each campaign. If the brand wants a different look, the agency can go through its ranks and create a different team.

As the campaigns go on, and additional responsibilities are given to the agency, the brand should see the costs of each campaign spread out; or, it can reassign different activities to its internal staff to be more productive.

Conclusion
It is easy to jump to the conclusion that agencies are no longer effective, and therefore the cord should be cut. That solution is overly simple and miscalculated. Dedicating time and energy to actually make the partnership stronger and more worthwhile is by far the better answer.

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Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.
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