Clients are taking back control of their relationships with agencies, who must adapt to being flexible and determined to succeed.
Top brand-side marketers such as TSB’s CMO, Pete Markey, welcome independent agencies and the “new blood” they have brought in to the industry, because they have been quick to see brand marketers want a more committed, close relationship.
Modern agency relationships can’t afford to be distant because brands need partners who, as he puts it, “get in the trenches… and roll up their sleeves and get involved and help drive a step change in performance”. This means placing driving commercial growth over billings and so poses agencies, particularly the large holding groups, with a quandary.
“The challenge for the big networks is how do they respond to that competition [from independents] – do they buy into it, do they challenge it or do they evolve?” Markey asks.
“Too many businesses we’ve all looked at, whether it’s Blockbuster or Encyclopaedia Britannica, have refused to change because ‘this’ is our business model. The big agency networks have the same challenge – to move with changing client needs and evolve, otherwise they will be slowly eaten away by the independents.”
“Avengers Assemble” to serve clients flexibly
Phil Edmonds, Managing Partner at Oystercatchers, could not agree more. He reveals that modern, digital-savvy brands are taking the lead not just in the agency they work with, but in how that agency needs to mould itself around the client to deliver its strategy.
He describes the modern process as akin to the film ‘Avengers Assemble’. Rather than being passive, a brand will expect to be involved in pulling together a crack team of experts in all the fields required to deliver on its strategy to reach its audience digitally and in real time.
“The days of picking up a global brand and just dropping them in a holding company’s network are gone,” he says.
“It’s no longer about adding a bit of print to TV. Brands want to interact digitally with consumers in real-time and they need bespoke agencies with specialist skills built around their strategy. This real-time marketing means they need so much content in so many formats for different channels that many are finding they need to in-house some creative because an agency cannot sign off hundreds of pieces of work remotely in the right time frame.
“The big agencies are having to act as if they are small and nimble. Those that cannot do this will struggle.”
Brands controlling their data
In addition to digital marketing prompting brands to consider in-housing staff, or requiring agencies to be more transparent and build super-flexible teams around their needs, there is the issue of technology.
With so much of digital marketing revolving around analysing customer data to bring the right message to the right customer at the right time, there is a growing trend for brands to look at developing their tech stack.
This is being driven by the need to control customer data as well as brands wanting more control over the agency relationship, as explored by Rebecca Sentance in her article: How can agencies compete in the new data privacy landscape?
As Fiona Spooner, Business to Consumer Global Marketing Director at the Financial Times explains, when the business news brand felt the elements of its marketing technology ‘stack’ were not working in unison, it took the bold step to take control and build its own platforms around its bespoke requirements.
This has been central to how it now works differently with agencies, taking control over its own data which generates customer insights that are shared with agencies, not the other way round.
“We’ve built our own marketing automation tool, our own email service provider and multi-variant testing tool because what we were using wasn’t quite what we needed. We built and developed our own tech stack so it can all talk to each other,” she says.
“It’s so fundamentally important to us, we try to do as much as we can ourselves, so it’s all linked to the data we have in-house which we then share with our agencies.”
Transparency shifts focus to shared goals
It would be fair to say that given the current trends for in-housing or for agency teams to be moulded around the client’s needs, both sides can agree with Kerry Chilvers, Brands Director at Direct Line Group, when she says the days of “set and forget” are gone.
The company recently renewed its media agreement with MediaCom at the start of the year, having nailed down a new way of working together in which transparency and mutual benefit were the guiding principles.
To get to the bottom of where payments go in the digital advertising supply chain, Chilvers believes it is vital to have an adult to adult conversation rather than a full-blown argument. This, she insists, can keep the relationship strong and allow a client and agency to work to shared goals which, when hit, push up an agency’s renumeration.
“We prefer to work with an agency because it gives us access to their global expertise, technical knowledge and strategic questioning that stops us slipping in to ‘group think’,” she says.
“But we need shared objectives so we know what we’re seeking to achieve and the agency needs to know they will be paid more if they hit targets. It ensures for us that the agency put their best people on our account and ensures we get the best quality media possible so we all win.”
Five trends smart agencies are embracing
Digital marketing is clearly in a period of major transition and there are many instances of agencies understanding the flexibility required by brands. A good example would be Publicis Emil, formed to offer Mercedes Benz a bespoke service. So too would Red Fuse, set up by WPP to offer a dedicated team for Colegate-Palmolive.
Digital marketing is clearly in a period of major transition and there are many instances of agencies understanding the flexibility required by brands.”
For executives looking to tap into this new direction for more flexible relationships, here are five crucial trends to bear in mind.
Brands want ownership of the data their digital marketing campaigns generate. This allows them to take responsibility for compliance, avoids losing customer insights if they switch agency and empowers them to be faster and more responsive online.
In-housing for speed
To get as near to real-time digital marketing as possible, providing content across multiple channels at speed, clients are increasingly starting to move content and design teams in-house.
The agency relationship thrives when shops tap into a new demand from brands to build a team with hand-picked experts from each required discipline in place, all dedicated to delivering on a strategy drawn up together in partnership.
It is now essential to be clear on what proportion of the budget goes on media, and which part goes to the agency and digital advertising partners.
Strategy and big ideas
The client-agency relationship is still thriving; it is just shifting towards brands having more of a say in how it works. Brands can self-serve in some areas but they still need an agency’s expertise.