The Case for Change: The Post-Agency Marketing Era

It’s been strange to sit down and capture some history of the marketing profession only to realise that I have lived a lot of it.

I have been blessed in my career with a diversity of experiences. As a marketer I have led some of the world’s most loved and admired brands in global and local roles in developing and developed markets. In those roles I worked with the largest of network agencies and the hottest of hot shops. I remember my first meeting at the brand new ‘Mindshare’ after it had split from my agency J. Walter Thompson to focus on media services in the mid 90’s. I remember paying agencies 17.65% of media spend to cover all production, creativity and other costs. I’ve made campaigns for $10k and $10m. I am very lucky to have experienced all of this in some amazing places, with brilliant people on magnificent brands.

Then as an agency leader I have a walked a mile on the other side of the client-agency fence. I have led agencies in 6 continents, first with creative, production and influence agencies, then adding more recently media, data and business transformation for full-spectrum experience. The brief to me on the agency-side was to “make the agency I always wanted when I was a client”. I pursued this goal, via bespoke agency solutions, acquiring and merging specialist capability and trailblazing on creative approaches to pay-for-performance and compensation models.

All this has given me a perspective on what I’m calling ‘Post-Agency Marketing’.

This is the first newsletter that explores this topic, and we have a lot to discover and debate together over the coming weeks. It’s a view based on this experience, it’s a view from both of these 'sides'.

My objective is this: to inspire you to think differently about your go-to-market model, so that you can do things faster, cheaper and better.

This goes well beyond ‘in-housing’, which is just one of many alternatives that we will explore together, and to be clear, I expect you will be engaging agency partners in a range of capacities for some time yet, if you want to win.

Before we start to explore these new models, let’s reflect on how we got here.

Why did we start to “brief the agency”?

The analogy I like to think about is the corner store selling general goods and run by the owner at the start of the 20th century. She knows her customers, and what is going on in their lives. She remembers what they bought last, she remembered to order what they couldn’t find last time and she has a good idea of when they will be back and what they will need then. She introduces new products to her customers, she listens to complaints, and she gives a special discount when she knows what a positive difference it will make. This is marketing. Creating a market. Matching buyers and sellers.

She is successful and her retail operation thrives. Soon it is a department store. While the store embraces her way of working and her values, she no longer knows her customers, what they bought last, what they may buy next and why. She doesn’t tell them about new products they might like. This is the tipping point of scale at which enterprises partnered with agencies - even this example of a department store, and all the way up to Coca-Cola or Mercedes-Benz - to act in proxy for those customer relationships when it was just a corner store. Agencies were built to know where people were, how to reach them, what they were thinking and feeling, and how to speak with them to get a change in attitude or behaviour. The chances of a business knowing these things, throughout the 20th century, was tiny. There was also so much mystery in the industry - creative ideas, how to make advertising, how to buy media - and as I’ve always said “where there is mystery, there’s margin” so agencies carefully protected this mystique. But that has largely evaporated now.

I propose to you that this has now all changed, so much so that we are really back to the age of the corner store. No matter how big your brand or business, a marketer today has every opportunity to be like our successful providore of a century ago. Like her, you can know your customers, and people who may become your customers. You can know how they think and feel and therefore act. You can know what matters most to them and how you can be a relevant part of their lives, and not an annoying interruptive ‘ad’. By mastering approachable marketing technology solutions, you can know what is working, and you invest your marketing investment in the best possible returns. You will still have agency partners, because they add scale and capability where it matters, but you lead a wider span of the marketing value chain than ever before.

In many ways, we have come full circle. How did we get here?

The early 20th century witnessed the birth of marketing agencies, marking a significant shift in how companies approached marketing. Faced with the complexities of marketing tasks in an era of rapid industrialisation and consumerism, companies began to outsource these functions to specialised firms. This shift was primarily driven by the need for sophisticated advertising strategies, requiring expertise beyond what most businesses possessed internally.

By the mid-20th century, these agencies had evolved from mere ad creators to full-fledged marketing service providers, offering a range of services including branding, market research, and media buying. The rise of agencies was characterised by their ability to deliver three key elements sought by marketers: speed, quality, and cost-efficiency. This model of outsourcing to agencies became a habitual practice for companies seeking to launch high-quality campaigns quickly and without extensive in-house investment.

However, the proliferation and scale of the agency industry also brought its own set of challenges. As the industry expanded, so did the competition among agencies, leading to market saturation and varied levels of service quality. Furthermore, the advent of digital marketing tools and platforms began to disrupt the traditional agency model, posing challenges to their ability to adapt.

The 1990s were a pivotal decade that saw the internet's emergence as a groundbreaking platform for consumer engagement. The introduction of the first clickable web-ad banners in 1994 signalled a new era in digital advertising. The advent of search engines like Yahoo! and Google transformed business approaches to online marketing, heralding the age of SEO and turning the internet into a dynamic and competitive marketplace.

The early 2000s marked a significant transformation in the realm of digital marketing. The internet, which had initially been a basic source of information, evolved into a powerful marketing platform. The burst of the dot-com bubble, while initially disruptive, ultimately paved the way for the emergence of platforms like LinkedIn and Facebook, offering innovative new avenues for brand-consumer engagement.

This era also witnessed the dawn of the smartphone era, revolutionising marketing strategies. The introduction of the BlackBerry in 2003, followed by the groundbreaking release of the iPhone in 2007, ushered in a new age of mobile marketing. These developments led to an increase in social media usage, opening up unprecedented marketing opportunities.

Then more recently, the rise of platforms like TikTok and Instagram Reels exemplified the necessity for content that is both engaging and succinct, capturing the essence of the fast-paced digital environment, and the powerful role that influencers play in the decisions of consumers.

Marketing agencies, instrumental in guiding brands through the early stages of advertising, faced challenges as digital technologies evolved. The transition to the digital age necessitated faster adaptation and a more integrated approach to data and creativity. This transformation has been complex and expensive for the industry, with varying levels of success. As a result of that what we are seeing today is a bifurcation of the marketing services industry. At one end we have the integrated partners that offer full-spectrum services to help their clients grow with a digital-first mindset. Examples of this include Publicis, who are arguably at the front of the pack, Accenture and MediaMonks. At the other end of the spectrum are niche specialist agencies for which there will always be a market because of the rarity of the skills. Today these would include VR/Metaverse agencies, sports sponsorship agencies, brand NFT curators to name just a few. These too will be normalised and integrated over time and new specialisms will emerge. And in this bifurcated industry I’m reminded of what Margaret Thatcher said “in the middle of the road, you get hit by traffic going both ways”… so if industry players are not successfully transitioning to the industry ‘poles’ there are a lot of pedestrian accidents for the middle ground to come.

Now we are ‘Post-Agency’.

In recent years, these same technological advancements that agencies have grappled with have empowered marketers to take more control over their strategies and executions, a shift often referred to as 'in-housing.' However, what I term 'Post-Agency Marketing' represents a more fundamental change. It's a comprehensive approach that goes beyond merely bringing marketing functions in-house. It's about rethinking the entire marketing paradigm, leveraging advancements in digital technology, data analytics, and AI to create more personalised, efficient, and impactful marketing strategies.

'Post-Agency Marketing' represents a philosophical and practical shift in how companies approach their marketing efforts. It's rooted in the belief that no one understands a brand better than those who live and breathe it every day. By in-housing marketing functions, companies can ensure greater alignment with their business objectives, foster closer collaboration among different departments, and respond more swiftly and effectively to market changes.

Prominent marketing leaders like Nike, PepsiCo, and Unilever exemplify the successful transition from agency-dependent marketing strategies to robust in-house operations combined with specialised agency partnerships. For instance:

Nike has significantly scaled back its reliance on traditional advertising agencies, investing instead in building its in-house capabilities. The brand focuses on digital marketing strategies leveraging data and technology to engage directly with consumers. This has in particular been evidenced in the supremacy of their CX online.

PepsiCo has developed its own content creation studio, moving significant portions of its marketing in-house. This shift allows PepsiCo to produce high-quality, timely content while maintaining greater control over its brand narrative. Sure, one of the worst examples of in-housing was from Pepsi (hello Kylie Jenner car-crash of a tone-deaf ad) this may have been the crisis they needed to lift their game.

Unilever has enhanced its internal expertise, particularly in digital marketing and data analytics. By developing in-house capabilities, Unilever has improved its ability to launch targeted, data-driven campaigns, enhancing its global marketing efficiency and effectiveness.

These examples illustrate a growing trend among global brands: taking control of their marketing activities. This shift not only ensures greater brand consistency but also realises cost efficiencies and fosters innovation, aligning marketing efforts more closely with overall business strategies.

While the post-agency model presents numerous advantages, it also poses significant challenges. The transition requires investment in technology and talent, a rethinking of traditional workflows, and a culture that fosters innovation and agility. Companies must balance the creative flair typically associated with external agencies with the data-driven insights gleaned from in-house analytics.

Moreover, the shift to in-house marketing demands continuous adaptation to emerging trends and technologies. Brands must stay ahead of the curve in areas like AI, programmatic advertising, and personalisation to remain competitive in an increasingly digital marketplace.

As we stand at the forefront of this new era in marketing, we face an exciting opportunity to redefine our strategies and create deeper, more meaningful connections with our audiences. The journey to post-agency marketing is not just about bringing functions in-house; it's about reimagining our approach to marketing in a rapidly evolving digital world.

I invite you to join me in this transformative journey. Share your experiences, insights, and thoughts as we collectively navigate the evolving landscape of marketing. Let's embrace the challenges and opportunities of this new era together.

In the next newsletter specifically we will look at rise of post-agency marketing models. We will explore the concept of three waves of disruptive change that have washed through the industry. The first wave was the rise of digital marketing. The second wave is the rise of big data and the ability to build first-party knowledge of your customers. The third wave, washing through the industry now, is AI and how it affects ideation, production, personalisation and many other aspects of marketing. In combination, these three waves have enabled the ‘post-agency’ world and that’s why the next newsletter will focus on them.

Beyond that next newsletter, we will continue to explore various facets of this transformation. Topics will include the integration of emerging technologies, the balance between creativity and data, strategies for managing the transition to in-house marketing, how to attract, develop and retain talent and much more. We will delve into how these changes impact not just marketing strategies but also the broader business landscape.

Join us as we uncover the nuances of post-agency marketing that will help shape your approach in this new era. If you have enjoyed this, please share it. If it sparked an idea, let me know below (even better if you disagree - as one of my bosses once said to me “If you and I agree all the time Justin, then one of us is unnecessary”). And lastly, if you haven’t yet subscribed, please click here .

Thank you, Justin