Marketers May Seize Back Control But They Still Need Agencies

We’re seeing/hearing more recently about marketers bringing work in-house.

We’ve spoken to it on this blog and Digiday has a piece you should read titled Agencies see change ahead as clients take more marketing in-house.

The article kicks off with a striking declaration from the P&G marketing chief:

“We are now seizing back control”.

Oh my! It’s an odd quote-have the marketing folks there felt powerless at the hands of their agency overlords?

OK, on a serious note-P&G, obviously, has the resources to do it, and as the article points out, the outcome of the move could be disastrous to agencies’ bottom lines.

They really should have inserted “larger” before “agencies’ bottom lines”. Per the article, WPP Group’s share price, for instance, is down 14 percent from the start of the year.

A quote from Josh Kelly at Fine sums it up:

“This is going to shrink the size of the outside agency pie because agencies are often not set up to keep pace with the range of tactics and navigate organizations in the ways now required.”

The small to mid-sized agency is actually perfectly set up to keep pace and navigate organizations, or at least, should be.

The article goes on to cite a trend that we’re seeing with our own agency clients:

Client control will end up benefiting nimbler agencies over massive ones and project work over retainers.

Please excuse the self-promotion for a moment, but we’ve seen direct evidence of the trend in Q1 of this year, breaking a company record with 24 client wins.

The majority of those wins were project-based.

A thank you to Digiday, as they used a stat from our New Year Outlook Report to underscore this:

One winner: agencies that have a structure to accommodate project-based work. Agencies are already seeing an uptick in requests around shorter, specialized projects. According to a survey released in January from development firm RSW/US, 35 percent of 115 agencies surveyed said a majority of their assignments are now project-based, while 16 percent said over 80 percent of their work is now project-based.

Embrace this as a positive trend within your agency as you pursue new business.

This quote from the article also rings true:

Marketers believe specialized boutique agencies, which already thrive on individual assignments, will benefit the most from the in-house movement. “Brands will start looking toward niche agencies who really understand their craft and have deep expertise,” said Quynh Mai, founder at Moving Image & Content.

I know I’m preaching to the choir when I point out the cyclical nature of the industry and agency new business in particular, but this is a trend that’s not going away quickly, in my opinion.

So it means you have to hone your positioning to show your expertise, be open to project opportunities (that make sense) and make sure you’re actively driving new business-marketers are obviously spending right now-take advantage of it.

And I leave you with his final quote, which also rings true:

Chris Mele, managing director of creative studio Stink Studios, said building an in-house agency means brands will have more knowledge around the overall creative process, how much talent can cost and how difficult talent is to find and retain, which might just open their eyes to how much they need agencies in the first place.

Amen.