Agency 2020: Change makers discuss the threat landscape for agencies

Offering their views at the Chatham House Rules roundtable session hosted at The Riding House Café in London were: Fern Miller, global chief marketing officer at DigitasLBi, George Porteous, managing director at Accenture Interactive; Jasel Mehta, former international general manager at AKQA, Jonny Spindler, chief innovation officer at AMV BBDO, Laura Jordan-Bambach, D&AD president and creative partner at Mr President, Mark Lainas, chief innovation officer at Ogilvy & Mather, Matt Groves, former managing director at Edelman Digital, Nadya Powell, managing director at Sunshine, Neil Miller, CEO at POSSIBLE, Simon Wassef, executive strategy director at R/GA, Gareth Moss, managing partner of The Blueprint and Paul Doran, strategic partner at The Blueprint.

Agencies are constantly adapting and changing to meet client interests and expectations in what has become a rapidly-evolving entrepreneurial sector. During the last decade agencies have often been downgraded from the significant role they held as informant and interpreter often to a guide for clients who know how to speak the language, but simply want some direction. Hearing from those involved in the discussion, it appears to be a widely-held belief that the trust between agencies and their clients has worn thin in recent years.

Getting the discussion underway, one attendee suggested: “Clients are actually the biggest threat to agencies. Every client I know is hiring some of the best people in the industry and setting up in-house creativity/innovation teams. They're doing amazing stuff and they're doing it brilliantly because they're plugged into the business problem the client's got in a really meaningful way. The competition has always been there from all the agencies, but the clients used to really need an agency; it's getting less because they have got a team internally that they can now rely on.”

“I think we do spend an inordinate amount of time looking internally, which takes our eye off the ball in terms of what we're here to do, which is to help our clients and navigate on their behalf.” added another contributor.

Echoing this opinion, another agency leader stated: “I also think we've lost the trust we once had as agencies because we sell by output. If we go right back to the 1950s, agencies were a trusted business partner and because there were less vehicles through which to communicate the agencies did everything that they could to communicate. Now I think clients have become very savvy about how we sell by business models rather than output. I’ve definitely been guilty of that and think that has broken the trust a little bit.”

Despite the fact there is an identified factor contributing to the threat to agencies, there is some disagreement for the cause of this issue. One leading agency member blames the vision that clients bring forth and their own contribution to their marketing success.

“When I think about what are my biggest agency threats in 2016 and 2017, it's making sure that I can really demonstrate value for them. Some clients are much happier that the BBC have dissolved their in-house team so that talent is going back into the agency landscape, but for a lot of them, it's because they can do it all themselves.”

Being a specialist within your field and offering a personal service is extremely important when dealing with clients. This may seem obvious, but statements suggest that agencies are not focusing on this issue as much as needs be.

One attendee said: “The other really important thing I think for agencies is around being a specialist as opposed to being a generalist. We’ve got the full service model, very traditional and a lot of people did the same thing at the same time. We are big, all the way through, we do everything in digital and I do think that's often difficult for clients to get their head around.”

Another agency leader added: “I think the point around specialism and generalisation is really important because to a certain extent now everyone is after the same thing and can offer the same thing. So when you go to a meeting, everyone's around a table, everyone's fighting for the same thing, different shades of grey between all the agencies getting involved.”

In addition to client and agency relationships, an avant-garde approach to work also seems to be a growing concern. One contributor discussed how breaking convention in order to adapt to change within the industry can actually lead to a loss in profits.

“There are some opportunities we've had recently where we've broken the convention a little bit. We don't make as much money off it, but they get the innovation they want at pace. We're helping them to start on a problem in an entrepreneurial way, which really resonates and sticks, but that breaks the way we normally work. We don't land with the same kind of revenue.”

It appears that clients require a fresh and creative approach in order to engage interest. However, according to the conversation, going against convention and helping clients to remain entrepreneurial can result in over spending and loss of profit.

“We are actually our biggest threat. Look at some of the talent that we've got within the business that three years ago was considered exceptional and they're not any more. They work in a space that is now very commoditised. They're not worth the salaries we're paying them to be honest. When you grow to a particular size, it's a real burden, that's really tough and then when we've got a duty of care to our clients to produce this amazing work that the consumer falls in love with, that becomes very hard.”

In an ever adapting industry, is prioritising clients’ needs preparing for a loss in revenue?

The final issue that proved to be a threat is the fact that working in silos is causing clients to become confused when dealing with multiple agencies. This topic was hit home by one agency leader: “I was in a situation the other day where there were four agencies, a PR agency, innovation agency, cultural content advertising agency and media agency all in the room and the client was so confused. I just said ‘this is the bit I would really like to do, so how about I do this bit?’ There was one overlap area and we just broke it up and then we went back into the client and said okay, this is what your team's going to do. You have to have honest conversations and sit down with the agency team.”

“They always want to join things up, but then there's silos and politics further down the line. Usually you have marketing in one place and digital in another. So, the people that are doing marketing are stuck in a model that says drive messages at people through broadcast media and then someone else owns the website digital experience and they absolutely don't join up.”

These leading London agencies reiterate how vital communication is between client and agency. A lack of communication appears to be a key concern in many aspects of agency relationships, including the limitations that silo creates.

Like any industry there are many economic, political and social threats on the horizon for the agency sector, but it seems, in the eyes of agency owners, that poor communication between agencies and their clients about what they both need out of a relationship could be the biggest threat to how agencies develop in the years ahead.