The agency of record is dead, but that's cool

We hear it every week. Clients are squeezing us too hard. There’s no way to make money as a small/medium/large agency. The whole business is either going up in smoke and/or the sky is falling over Madison Avenue. But advertising’s always been this way. Changing, that is.

For years, we’ve seen our clients try to get more marketing done for less. For awhile, that meant consolidation. Then it meant developing rosters of agencies so they could work with the best in an expanding array of marketing disciplines. All the while, clients placed less value on long-term relationships. Well, so what?

These trends aren’t Madison Avenue’s death knell. No more than yesterday’s trends were or tomorrow’s trends will be. Instead, they represent something incredibly valuable: an opportunity to do better. As AOR-relationships evaporate, agency models need to evolve. Those who can, will. And they will win.

It’s not 1985 or even 1995. Clients want more, better ideas faster, and it’s up to us to make that happen—even if it means we have to change the way we work.

Yes, the AOR is rare—near mythical—these days. Much of the big, steady budgets we once salivated over have been converted to project-based funding. And so workloads are uncertain. And so forecasting has become a dark art on par with necromancy, or really good latte art.

But luckily, agencies work alongside an industry whose staffing model is designed with our “new normal” in mind. Production companies never had AOR-type relationships, and yet, all the senior producers and directors on staff still get to drive their Teslas/Porsches/Hovercrafts to Santa Monica every day. How do they manage this? By keeping a core team of senior folks on staff and hiring specialized day-players for each job.

That’s how RSL + Crew is designed. Most agencies are making ads, but selling hours. We’re doing something different: Treating advertising more like a product than a service. Selling outcomes. Leading our clients on how we can provide value. And we’re not alone. Shops like V&S and Fearless, both of Boulder, are also operating in harmony with this trend.

Project-based funding renders the traditional model irrelevant, so we can’t staff our ad agencies with the towering organizational pyramids of yesteryear, or even yesterday. But this doesn’t mean the sky is falling: We’ll still build brands, and we’ll still get paid to do so. Talented specialists and generalists will both see their market values rise as a new marketplace vies for their talents (are you on yet?). And as most any freelancer will tell you, the extra money more than makes up for having to buy your own health insurance and retirement.

If anything, our model allows us to provide even more full-service solutions to clients. When we have a new project, we call in help from our curated list of hundreds of marketing and advertising specialists. Amazing, senior ones. We’ve created digital, social, video and broadcast content for Yelp under this model. Video and print for Quiksilver. Other projects are in the works. And “works” is the exact right word here, because it’s working.

Traditional agencies make more money the more people they put on an assignment. But we noticed that better work gets made when you put fewer, better people on that same task. Especially when you get to cherry pick the best talent for each task.

And we believe that all that better work will get us to the “more money” part. See? This isn’t a crisis, it’s just a marketing challenge. Some foretell an industry implosion; we see an explosion of opportunity.

John Reid is the creative lead and a co-founder of RSL + Crew

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