Ready to Embrace Full-Service Agencies Once Again?

October 16, 2015

By AARM | Advertising Audit & Risk Management, Marketing Math Blog

"Back in the day" is a catch phrase that many of us who came up in the ad business during the full-service agency, 15% commission era are accustomed to using when discussing the state of affairs within the industry today.

Things were simpler then for both marketers and ad agencies. Agencies were valued strategic partners, with C-Suite access that were tasked with developing brand positioning architectures, target segmentation schema and the creation and stewarding of brand communications across customer touchpoints. Marketers managed one full-service agency to handle all of the "above the line" branding and activation activities and maybe one or two "below the line" shops to handle tasks such as sales promotion and yellow pages advertising.

Fast forward to the here and now and the concept of "generalist" agencies, as full-service shops are often derogatorily referred to, has given way to specialization. As a result, marketers have seen the depth of their agency rosters swell in number to represent several to several dozen shops, each responsible for some, but not every aspect of a brand's interaction with some, but not all segments of that brand's target audience.

In the current "specialization" model, the challenges for marketers, particularly for those with limited staff resources, that don't employ a full-service agency-of-record, are many. There are critical tasks and hand-offs which need to be addressed within the client organization and across their agency network, such as:

  • Who is responsible for marketing communications strategy development?
  • Who is on point for the integration and coordination of the communications program across touchpoints? Across media? Across target segments? Across geographies?
  • Who owns the agency relationships?

Factor in the challenges caused by evolving dynamics including organizational silos (i.e. digital versus traditional media), cross-channel marketing and attribution, big data and ad technology and the level of complexity, which marketers face grows to an almost dizzying height.

As to "who" is responsible, the obvious answer is that ownership of these tasks clearly resides with the client-side marketing team. This might help to explain why marketers are feeling stressed out, with many actually expressing a lack of confidence in their team's ability.

Two short years ago Adobe conducted a survey of 1,000 U.S. marketers and found that only 40% of those surveyed felt that their company's marketing efforts were effective. This same survey indicated that 68% of marketers were feeling "more pressure to show a return on investment on marketing spend" (ROMI). Earlier this year, Workfront surveyed 500 marketers and found that 25% felt "highly stressed" and 80% stated that they felt "overloaded and understaffed."

It should go without saying that this is not a healthy dynamic for marketers and doesn't seem to bode well for organizations seeking to optimize their ROMI.

One might realistically ask the question, are such organizational and or workload challenges impacting brand/ customer relationships? Some industry experts, such as Liz Miller, SVP of Marketing at the CMO council have suggested that consumers in fact have a disjointed perspective of certain brands, resulting in part from inconsistent experiences across touchpoints. In a recent interview with Marketing Daily, Ms. Miller suggested that the key issue facing marketers was delivering a "holistic, connected customer experience."

Thus it would seem that in this era of specialization, deep agency rosters, headcount pressures on both client and agency organizations, rapidly evolving ad technologies and an empowered consumer, with a wide array of choices a return to "simpler" times would be welcome.

In our experience, advertisers that are successfully navigating this complex, rapidly changing market have done three things that are contributing to their success:

  1. Reduced the size of their agency rosters.
  2. Deputized an Agency-of-Record partner to share in the responsibility for developing strategies and orchestrating marketing activities to deliver a holistic brand experience.
  3. Placed a high premium on effective, collaborative communications with their agency partners and internal stakeholders to gain buy-in to the organization's marketing communications efforts and to provide regular performance updates.

While a return to the "good ole days" may be nothing more than a fanciful wish, the concept of simplification remains a viable means of steadying the ship and allocating both advertiser and agency resources in a more efficient manner.

Source

"Ready to Embrace Full-Service Agencies Once Again?" Cliff Campeau, Principal; originally published on marketingmath.aarmusa.com, 8/24/15.

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