Expert Engineer or Specialised Tool?

A polarised future for the 2020’s agency

?“I want an agency that is not like a Swiss Army knife. An agency who has a very, very sharp weapon which does one thing extraordinarily well.” - Rob Bullough, Director of Global Brand Marketing, Electronic Arts

“A Swiss Army model is best. But just don’t use all the blades at once.” - Mat Goff, Joint CEO, adam&eveDDB

Which view is right? Well, the easy answer is both, at different times and for different reasons. The harder answer is knowing which one will best ride the pendulum of possibility over the next decade.  

Those were just some of points debated during an Institute of Practitioners in Advertising (IPA) Business Growth Conference panel of experts I chaired yesterday. As well as Rob and Mat mentioned above, Cheryl Calverley, CEO, Eve Sleep and Louise Twycross-Lewis, PHD UK’s Head of Insight joined me to explore the findings from our The Future of Brand and Agency Relationships report, revealing the consumer needs, trends and business strategies shaping the 2020’s marketing landscape. 

?Five business models define the decade

The Report uncovers the five business models which will optimise the marketing industry’s future. 

Best viewed as sitting on a pendulum rather than on a static spectrum, the five models work across a sliding scale of integration and specialism – from one agency meeting all the clients’ needs, to a coalition approach, a combination of in-house client services and external agency services or fully in-house. Each of them has their own strengths and weaknesses and varying degrees of growth potential. At both ends of this spectrum, two polarised visions of the future agency emerge. 

An industry divided – which model works best?

Nearly one in two (42%) ranked the Engineer model as being most likely to grow significantly in the live audience poll - perhaps unsurprisingly, given that most tuning in were agencies. This is where the overarching marketing strategy is developed by a single external body, while the execution of the strategy is undertaken by a multitude of agencies. 

However, the model seen to offer the second highest potential for growth sits towards the other end of the spectrum. A further one in five (21%) of the audience opted for the Hybrid, which combines in-house client and external agency services to develop and execute the marketing strategy. 

Our Report predicts both models to have significant growth potential. adam&eveDDB’s Mat Goff agreed, seeing potential across all, as long as agencies worked hard to create a business partnership with their client, delivering growth together regardless of the business model. 

But, as with the industry experts interviewed in our Report, the IPA panel was divided on which model should be adopted. Should a single agency have the remit and capability to help brands respond to their challenges? Or should they focus and specialise on one specific marketing function? 

Both debated whether the all-service-encompassing Titan agency was realistic, although it was pointed out that there are lots of examples of holding companies who deliver it well. Brand experts were anxious about ceding so much control, while agency leaders warned of potential relationship and creativity fatigue. 

Agreement on consumer change drivers 

Although our panel and the experts interviewed in our Report differed on the future agency role, there was broad agreement on the macro challenges, such as increased consumer centricity and more multi-dimensional marketing, driving the need for change and agility. And, at the heart of effective marketing will be the need for a more holistic understanding of the 2020’s customer.

 PHD UK’s Louise Twycross-Lewis shared that their own tracking showed a third of UK adults trust brands more than the government when responding to the coronavirus. Brands took the lead first by rewarding key workers and more vulnerable members of society with dedicated opening hours. There’s a window of opportunity for brands to create a deeper, empathetic conversation with their customers which they must deliver on if they want to stay relevant.   

Turning right on the path ahead 

When choosing the best agency business model for them, brands need to understand how complex their needs and aspirations are. Where are their capability gaps? Is the C-Suite aligned?

Eve Sleep’s Cheryl Calverley pointed out that, although the brand marketing team was responsible for defining and protecting the brand, ultimately, the CEO needs to be fully aligned and responsible for its health. 

Meanwhile, agencies should ask where their ambition and ability currently sits on the data/tech/creativity spectrum driving marketing over the next decade. Do they want to be generalists or specialists? A partner or a supplier? Which client capability gaps can they fulfil? The answer to these questions will determine which of our five business models they follow. Whatever model they decide on, agile business operations, talent and internal processes will be key, so they can move fluidly from model to model on the pendulum – and seize any opportunity on their way. 

Let me know in the comments how you think the agency/brand relationship will change and which models you see working for you. To find out more about the key consumer drivers underpinning the report, read our latest blog post. To access the full report in full, please contact the IPA here.