Advertising Age has just published a state of the nation report on today's agency world. Specifically the fact that all the talent seems to be leaving.
In some ways it makes for depressing reading. At their best, agencies can be unparalleled creators of marketing success. They have some of the brightest people ever to have picked up a layout pad. And they are fun places to work.
But as the article points out, many agencies have lost the spark and attitude that made them special. If you want to work for one of the big agencies today, you'll ultimately be working for one of three or four holding companies. Of course, the story goes that within these groups there is enough diversity for everyone. But as a good friend of mine points out, these companies buy agencies for what makes them special and then relentlessly squeeze every last drop of it out in the name of process efficiency and profit margin.
Senior creatives face the classic issue of the Peter Principle. They are promoted beyond what they feel qualified to do. And more than this, they end up spending their lives in endless meetings rather than doing what they came into the business for. As the article puts it,
Generally speaking, people don't become copywriters or art directors because they want to someday sit in an endless rotation of endless meetings, hopscotch from airport to airport, handle clients, manage a profit-and-loss statement and only touch the work when it's time to put it on an awards submission reel. Those people got into the business because they want to make stuff.
For more junior people, joining a big agency is a dream. Yet as many of these agencies have become production houses for massive global accounts, the scope for real creativity can be incredibly narrow. Some years back I interviewed a team from one of the most famous agencies in London. I wondered why they'd want to leave to join a mid-sized B2B shop. Then I saw the endless page ads for the agency's largest retail account.
For their part, clients are increasingly looking for something different from their agencies. At worst, they want a supplier who can implement the stuff they can't do internally. They are happy to roll out their own email campaigns and manage microsites but they need some help with initial design and copywriting. Of course, for the most part, these internal campaigns do not deliver anywhere near the results that they could but they do enough.
At the other end of the scale are the clients who want a more strategic relationship with their agency. But this is more than simply wanting some campaign planning and message development. It is beginning to blur into more management consultancy type services. In a recent project with one of my clients, we realised early on the real issue was that the business model was unsustainable. This led into a brainstorm around other possible models and their viability. In this discussion, because we had the experience of so many other companies, we could bring real value to the conversation. This situation is a long way from the norm however.
The answer is yes and no. Yes, the traditional agency for the most part is on its way out. There will still be room for a few huge multinationals to manage international campaigns (although maybe not to create them in the first place). But with the wholesale move to project-by-project arrangements (versus agency of record deals), larger agencies will struggle to manage the significant overheads they carry.
However, there will still be room for the smaller, nimbler firms who have a good network of partners that can offer specialist services as and when needed. The truth is that once an agency has 20 people or so, there's little a large agency can do that they can't. And even below this, it is always possible to partner effectively to run even highly complex campaigns.
My prediction is that we will see an ever increasing number of smaller agencies who keep their costs down but who tie in the best people with equity in the company. The core differentiator will not be that they have some great new model for how to create success (prod any of the existing ones and they fall over pretty quickly) but rather that they offer exceptional understanding of where business objectives meet customer needs. It's not rocket science but it is in worryingly short supply.
If you are choosing an agency, consider the following: