The agency “model” is fading fast.
Lets think clearly here folks:
Would you invest today in a TV repair shop? Would you invest in an Encyclopedia printing company? Probably not. But 50 years ago this may have been a great profit center and a needed service.
Now, think like a consumer. When you need information do you go to an Encyclopedia? When your TV goes on the fritz what do you do? (assuming you even own a TV)
Now lets say you are on a sinking ship. Do you sit tight and hope the water will stop seeping in and the ship will magically regain its buoyancy?
Do you start bailing water in a panic but do nothing to plug the hole? Do you evaluate the leak and attempt to patch it before the ship (and you) hit rock bottom?
Or, do you set your emotions aside and make a decision to even abandon ship with the intention of building a new, better equipped, more modern ship ready to evolve and meet the demands of a changing environment?
I choose the latter and I am thankfully (now) not alone. Others are seeing this necessity and choosing to specialize, collaborate, and perform in a more product- centric service market.
If you are sailing on a traditional advertising agency and have yet to hit the hurricane, you are lucky (or oblivious) but it’s truly only a matter of time.
I saw this storm coming 10 years ago. And my clothes have already thankfully dried.
I’m rebuilt in a collaborative model and Clear Labs is successfully taking on the high seas.
The pop up storm
It shouldn’t really be a surprise when we think about it. Its been happening for years, all around us and we just chose to put our heads in the sand like ostriches rather than fearlessly enter it to take it on.
The biggest threat to the agency model is to think it’s actually “a model” at all.
We are (supposed to be) within an innovative industry. So, to see change as a threat is fatal. Instead, as an industry, we should welcome every curve in the road and seize the unending possibilities to create new systems, services, and ways to create a new sense of value for our clients.
So I said, lets put a big fat grenade up the ass of the “model” and just…. blow it up.
Let’s let her sink to the bottom of the deep blue sea to be evaluated by anthropologists in years to come who will marvel how an entire industry somehow managed to conduct business the way we do all the way into the 21st century.
Here are some things to consider in why the agency model ( while cool and nostalgic) is as antiquated and not worth fixing as an 8-track player in your dads conversion van:
1) Changing Relationship With Clients and Client with Customers
Clients used to want three martini lunches and fancy secretaries. At least that is was Don Draper depicts and New York City agencies still emulate. Now most clients just want fast service, a production shop to do what they are told to do, a quick conference call and they really hope you have low enough overhead to do it on their budget.
Combine that with the brand speaking to the customer and you have cut out the middle-madness-man.
Agencies once were an important intermediary to ensure the right message was crafted (and then broadcasted).
We now live in the age of real-time dialogue where consumer reviews and social opinions are more a more important pull than the big ad push. Because of this shift brands (your clients) are simply taking more ownership of that communication. And with the tools easily available for use by a talented but fresh out of college communications major who will work for cheap in a super tough job market- why not?
2) Creative Sophistication vs. “I got a guy”
Everyone is a creative today. The coffee shop barista down the street who does cute chalk board drawings. Your neighbor selling feathered lamps on Etsy. The guy who sends you linked in requests to make a white board video for you for a hundred bucks (we hate that guy right?)
Access to technology, social media, and on the go apps offering design tools have given everyone the tools to go into the business of creativity.
Problem is, agency clients have been enveloped in this culture. And they always have a guy who can do it for less. And really, between the offer to work for a thousand bucks or 100,000 bucks- the client just doesn’t know the difference.
Few clients recognize the difference between GOOD and GREAT.
3) Automation and Artificial Intelligence
Automation is by far a major threat that will continue to take down the traditional model. Natural language processing and algorithm-powered cloud technology platforms are super charging that threat. Ads that write, place, design, and optimize themselves according to predictive behaviors of consumers are making agencies absolutely ancient by comparison.
This makes me think of one of my favorite episodes on the TV show “The Office”. A show about (ironically) an antiquated business concept that sells paper and supplies directly to consumers, competing against big box stores and website ordering platforms. When Dunder Mifflin brings in an E-commerce platform, Dwight aims to prove he can outsell “the machine”. Of course, he fails.
While the premise is hilarious, those of us in the industry who are continuing to create ads the same way we did 5 or 10 years ago are just little Dwight’s trying to plug our creativity and convince the client its better because…..(sorry, I cant come up with a reason)
This isn’t just happening in ads. It’s happening in cross platform campaigns from emails to customer service technology. Virtually the entire presence of the brand.
4) Client access to data
Clients have more access to data but actually share less of it with agency partners than ever before. It’s like they are testing us to see what we know- or challenge us to challenge them rather than work as partners. Because we aren’t partners. We are their overpaid agency.
Or maybe they just don’t know what to share. Whatever it is, the landscape of the outsource agency (outsiders) vs. the in-house (living and breathing product knowledge team) affects the strategic product, which in turn affects the quality of a brief, which can lead to creative products that miss the mark. It’s a snowball effect that starts with a lack of meaningful insight.
Agencies that are evolving with the development of robust business intelligence units that can obtain data and analyze it in a way that aids strategic decision-making and planning may survive. If they can overcome the rest of the issues in this
5) Client expectations AKA “Oh look, a Unicorn!”
As a result of tools and data and the way they view the overall creative process today, clients have a rather unrealistic expectation of what we can do.
Have you ever had a client ask you to create a “viral video”?
Essentially this is just them asking you to create a successful campaign concept right- I mean, that is what we all strive for. But the fact they are now asking for agencies to craft these experiences with a true expectation of these guaranteed social results says a lot about the client mentality and their perspective on the advertising to consumer landscape.
They want more, for less, quicker, and better. And if you can’t or wont do it for them, they will ask the intern down the hall with a Go Pro.
6) Full service (for most shops) is just a lie
At the risk of sounding like my grandfather, back in the day, there were maybe 30 agencies that ran the world of commerce.
And yes, in some ways those 30 still exist, some with more initials, some with merged initials, but ultimately they all are owned by only a couple of major companies. This powerful conglomerate is the last major dinosaur of the industry.
But today, we have what was unthinkable in 1950. We have millions of tiny shops. 1 head, 10 heads, even 100 head shops that call themselves an agency.
Whatever they call themselves, the biggest crusher of all is the “full service” lie.
Sure you may get digital tools and know how to design a WordPress site or craft a logo or even run an experiential promotion. But the reality of it is, if we are all willing to be honest, none of us are really “full service”.
When you go to a full service gas station (yes those still exist) you get what you expect. A full tank of gas, a check of your oil, a wipe down of your windshield and a smile. Simple to deliver and most of the time- expectation met.
When you walk into to a full service agency these days, you would literally have to meet a team capable of fulfilling hundreds of services with proficient and up to date knowledge of thousands of systems, data platforms, technologies, media delivery systems, AND be creatively talented with a strong business acumen to boot.
It’s not that there aren’t very talented small shops out there- its just that it’s impossible for them to truly be “full service” while delivering the best to the client.
And so, clients who know this are hiring dozens of micro agencies (agency partners) with specialty skills to work together in collaborative form. They are also turning to freelancers and outsource contract-based teams more than ever before requiring less literal face time and more use of Facetime technology to get business done.
That makes the once considered necessary brick and mortar investments border on extravagant for some small shops and it puts full service agencies up against a hard game of chess competing against the honest players who admit their weaknesses and invest in their strengths.
The culture needs of your team
Millennials ask questions. They want more. And they believe they can get it elsewhere if you wont give it to them.
How dare they think for themselves….right?
Actually, this is the good stuff that is leading to awesome innovation that we are faced to compete with but this article is about that being good and our need to figure it out so I’ll leave it at that.
But here is something you should know. The average Millennial will stay with you for less than 2 years and have over 20 different jobs (employers) in their lifetime, that is unless they open the next big thing themselves.
Millennial overwhelmingly consider themselves “entrepreneurs” even those who have never started or failed a real business. They are just waiting for the right opportunity.
But with this, they don’t want the 9-5 that mucks up their creative inspiration. They don’t even necessarily want to come to the office- even sometimes- ever.
They want to colabr8 and create in a free environment.
And frankly, this is where you get the most from your paid talent anyways. The thinking. Because everything else, is probably readily available in data or an app.
What are you really selling?
At the end of the day, an agency today needs to stop and think.
What are you really selling that clients and brands are willing to buy and need to buy so much so that they can’t do it without you.
Service still matters. No one can dispute the value of a trusted relationship, friendship and “go to” partner. But that is rarely enough to sustain the paycheck.
The ability for any agency, small shop, or specialty marketer to differentiate themselves and plug themselves into a niche is more important than ever before. And further more, their ability and resources to pull that together in a collaborative group to form the ultimate powerhouse of service for a clients needs is critical for the successful navigation of an otherwise sinking ship.