This essay is Part 1 of our “What even IS an agency” series. You’ll find Part 2 here.
The news that WPP consolidated its agency roster again hit me right in the feels a few weeks ago. The names J. Walter Thompson and Young & Rubicam just won’t exist anymore. I mean, they’re businesses, so who really cares, but Y&R turned 100 this year. JWT was even older. Two of the most storied and valuable brands in the history of advertising are now just gone, for reasons that can’t be clearly communicated.
Every year is a watershed moment in the agency world, partly because agencies are really good at saying “everything is different this year!” But 2023 actually felt like a real watershed moment. Not one but two 100-year-old agencies are gone. And other legendary agencies have been on the retreat. Droga is owned by the consultants. S&S US is basically a one-client shop. R/GA won a bunch of awards last year, and then this year laid a bunch of people off and hired them back as part-timers. Adweek’s Breakthrough Agency of the Year just announced they were bought by a B2B tech consultancy. Lots of others have a pharma client to pay the bills, and are otherwise underwater.
The vibes are off, and they have been for a while.
The death of traditional TV campaigns and AOR retainer budgets has gutted the large agency model. But the response by the ad industry has been to crawl further up their own assholes. Agencies want to be consulting firms now. Innovation experts, disruption drivers, business model theorists. They’re going after Accenture and Deloitte, even as Deloitte and Accenture are trying to reposition themselves as full-service agency partners.
[Sidenote: It will never not be hilarious to me that the brilliant business consultants were like “what if we got into the agency business?” right as the industry was shifting toward high-touch projects with lower margins. Jump right in, the water’s freezing!]
On the creative side, the creatives and brands are in hunker mode, and everyone knows it. Layoffs across the industry breed insecurity, insecurity breeds caution, caution breeds dullness.
On the strategy side, 2023 was weird and it’s going to get even weirder. The funnel is as non-linear as it can get, the ecosystem of media and social channels is fractured (possibly forever), and the hottest online hangouts are closed communities that brands can’t get into.
The past is gone, the present is chaos, and the future is in flux. Smaller, non-traditional, and nimbler agencies should be absolutely psyched about all this. We’ve never been more needed by our clients, or had more advantages over our larger competitors.
I’ve tried to distill those advantages into a few clear areas where brands and flexible agency partners can win together. Here are four…
Creative Execution
“I just need a partner who’s going to do things to help my business.” It’s the most common phrase we hear in new-biz pitches. And they aren’t talking about creating decks, they’re talking about creating actual audience experiences.
Creative execution is the massive gap in the industry. Who’s actually making the shit that audiences are going to love? Where does it live? How does it perform? Some of this is getting taken in-house simply because so many agencies have proven themselves to be inept and expensive at it. We’ll get to that in a minute.
But the truth is, a shiny deck of insights will not save a struggling brand. The world moves too fast, audiences are too impatient. The doers are winning, the thought leaders are losing, and I think that’s a huge reason why smaller, high-touch shops and production houses are doing so well right now.
Marketing problems aren’t usually solved by deep thoughts, they tend to be solved by making cool shit.
Instigation
In a world of budget cuts and headcount reductions, where marketers are scared of their own shadow, an outside partner can bring the bold solutions that brands need to break through and thrive.
This is another common theme we hear from prospective clients in our pitch meetings: “I’m not getting proactive ideas from my agencies or my internal teams.”
And I get that. The world is complicated, ideas are tough to sell in, and the channels where brands want to play require a higher level of expertise to navigate. A good agency is built for those realities, giving you fractional access to expertise and creative resources that are hard to develop in-house.
And that’s why instigation and execution are two sides of the same coin. The entire marketing industry is geared toward the idea that a brilliant strategy deck is a mystical, valuable, scarce treasure. In our experience, this simply isn’t true. Even creative ideation decks are a dime a dozen. The rarest thing in this industry is a team that’s willing to challenge the client with a differentiated idea, and then dig in and do the day-to-day execution at a high level.
Integration
The funnel is non-linear, and channels are blurring like crazy. The way forward is for PR and content and social and ATL advertising to work together as a single integrated program, but very few companies are nailing this. It’s hard to do, and involves getting different stakeholders and different agencies to collaborate closely together.
This is another space where a good agency with an execution mindset can be a lifesaver, creating the trackers, change-management plans, calendars, and production bibles that internal teams need so they can pull together and act in a coordinated way. Agencies can step on toes, navigate (or ignore) the office dynamics that keep teams in their corners, and escalate to keep projects running smoothly across all the necessary stakeholders.
Price
And here’s the kicker: Agencies should be delivering all that value at a budget that beats what a client can do in-house.
Codeword has only been around for 10 years, but we’ve already seen a couple cycles of in-housing trends in the industry. It doesn’t often work, because it isn’t optimized for the execution, instigation, and integration that’s necessary to build a great brand.
And I’ve seen a lot of brands respond to that by increasing the size of their org, and hiring more specialists, thinking that it will speed up their processes and improve their ideas. But growing an internal team doesn’t make it faster and bolder, it tends to make it slower and more cautious, with more bureaucracy, approvals, internal projects, and stuffed calendars that stand in the way of the work.
Agency teams, on the other hand, give you expert fractionality. You can have pieces of the world’s top experts instead of having to find and hire them in-house, and we’re optimizing for utilization and output. Who decides internally if a video director, a digital producer, a data analyst, or a writer, is “fully scoped”? Agencies are really good at that… it’s kind of our whole thing.
So even in a world of downsizing and budget cuts, it’s hard to beat a good agency for sheer value.
If this sounds like a hard sales pitch, it’s really not intended to be one. It’s just so easy right now to look around and see doom and gloom everywhere. Our industry is in a full-blown recession. This is a moment of chaos, and it’s not ending soon.
And yet, chaos can be a ladder, and for both in-house marketers and their agency partners, the ones who get stuff done will climb to the top.
This essay is Part 1 of our “What even IS an agency” series. You’ll find Part 2 here.
