How Is The In-House Agency Trend Affecting Your Firm?

Marketing Charts released an article on our latest 2019 New Year Outlook Survey titled Agencies’ New Business Worries Spike. While we always appreciate the press, it is a bit gloom and doom.  They quote our stats around agencies thinking it will be more difficult to win business this year, in-house agencies increasing and marketers consolidating agencies, all of which are (obviously) trending, but what I wanted to posit in this post is that it isn’t all gloom and doom.

Especially when it comes to the in-house agency trend.  I’ll knock on wood as I type this, but overall, we’re not seeing it affect small-to-mid-sized firms in the same manner as the larger agencies.  I am speaking anecdotally, as a large majority of our clients fall into that size range, as well as a good portion of the agencies and firms I talk to on a daily basis.

To provide some perspective from your peers, I reached out to several agencies in that size range to get their take, and three of their quotes are below:

Agency Owner #1:

My take on agency new business challenges is probably similar to that of other agency owners. More and more for us, the new opportunities come up because of changes in leadership at the prospect companies. A good share of those changes are the result of private equity firms buying up established brands and then pressuring them to hit new financials in a short time frame. Getting fresh marketing support is sometimes a fallout of that . . .  we worked very hard on a 6-month project and were successful in helping the client win additional business at Dick’s Sporting Goods. Now that project is done. The CEO who called us in originally is already on to another turnaround assignment. I guess your key takeaway from the above is that leadership changes can lead to agency changes – win or lose.

Agency Owner #2

Over the years we have seen the trends you mention and certainly been impacted at times. However, in the past year or so, our client relationships have been very stable and – fortunately – not experienced any consolidation- or in-house agency-related losses. I suppose that actually supports your thesis.

Agency Owner #3

We are actually seeing a LOT of reorganization on our client’s side the last 3 months and this is really what’s causing any uncertainty for us but overall we are seeing clients continue to look for a handful of “trusted advisors” as they strive to balance their agency resources.  We’ve had 3 major clients leave their organizations over the past 3 months and this will definitely impact our business this year ahead and into next if we do not replace them immediately.

While only a small sample, these quotes are representative of what we’re seeing agencies face.  It’s not so much fighting the in-house trend as it is consolidation, and even more so, leadership changes.

Viewing it from a new business angle, the silver lining here is the possibility of working with that individual wherever he or she lands. Suffice to say, that should always be a part of your new business strategy.

As an agency owner, you obviously can’t control client consolidation or leadership changes, but you can control your new business strategy to ensure these changes don’t negatively impact your firm.