TL;42*
Announcing the death of AORs may be an exaggeration, but the change is really real. The traditional agency model is losing ground to smaller, remote, nimble in-house teams supported by tech specialized partners that can tackle the tactics to execute creative strategy.
For a long time Ad agencies were the thing. An essential part of our companies’ lives. Forces of creativity and business acumen that helped us scale the ladder of success.
A brand would be so proud of its Agency of Record that it was a major PR event to announce a new long-term retainer. However, the death of AORs has been shouted from the rooftops of Forbes, AdAge and every major advertising and marketing publication for the past ten years:
The "agency of record" concept is just about dead, and so are the retainers that funded them.
Michael Farmer, AdAge, 2015
Like most death rumors, it has been greatly exaggerated.
There are enough arguments for a change of paradigm, though.
Big, expensive agencies lost dominance because:
- Most of their work became commoditized over time.
- They ended up hiring smaller agencies for siloed deep expertise.
- Media means much more than it used to do and there’s so much to learn it became inapprehensible.
- Sales downturn led to firing talent, which, in turn, led to the loss of advanced expertise, particularly on tactical delivery of technology (advertising or martech).
- With remote work being mainstream, talent is no longer tied to the local, regional or even national reach of the Big Shot Agency gravitational force.
- Small marketing teams delivered similar creative value at a fraction of the cost.
- Prices are nuts and returns are scarce.
So it kind of is dead, isn’t it?
Like with most things, the answer is it depends. Most big companies still find more reassurance on similarly large agency partners. There are notable exceptions, like Liberty Mutual appointing a 15-people team as their exclusive Creative Partner.
For mid-market, however, old school AORs make no sense anymore. The future takes shape as a completely different structure. One that’s more modern, competitive, nimble and daring.
Long live the In-House creatives.
The times they have a-changed. Brands no longer have to pay a huge team to pile up hours against your account to thrive. Smarts can go a long way, particularly for companies growing into the mid-market.
This is very hard to refute:
- There are oh-so-many channels and touchpoints in your customer journeys that it’s very hard - and terribly expensive - to find one single team with enough expertise.
- Highly performant and creative visionaries prefer to work in places where they feel they can make a difference, instead of becoming just another cog in a massive machinery.
- A team of three skilled people that make good decisions and truly understand the story they have to tell is enough to institute an in-house team. That’s why these are on the rise.
- Small and mighty in-house teams need partner agencies to help them sort reality, particularly from a technical perspective.
The new agency role and what it means for your company
This is happening. Today:
- Artificial intelligence is consistently mediocre at most things, but it’s extraordinarily successful at being mediocre. It will replace every subpar agency in the world. There’s no more room for teams doing generic, cheap, cookie cutter work.
- Mid to big teams doing excellent work across many disciplines will be slowly acquired and consolidated into larger agencies until these dominate again.
- Those of us with a “T” shaped skill set – enough generalist knowledge to be useful, plus a specific expertise that runs deep – have a shot at staying independent and relevant.
This will breed a new generation of “agencies of”:
- Agencies of Visibility. The ones to whom you delegate paid advertising, SEO, Inbound and other performance marketing work.
- Agencies of Media. Chances are you’ll have in-house production too, but these are the ones that step up when you need to scale production quality and reach, and act as a more traditional advertising agency, including media buying.
- Agencies of Influence. In-house influencers are a thing, and the ideal scenario if your industry and brand allows it. These agency partners are the ones in charge of making noise, creating hype, setting trends and turning heads.
- Agencies of Ecosystems. Agencies like ours that deal with the unbearable quantity of available tactical choices in technology, helping you choose your tools and making all the moving parts work. This of course includes website, ecommerce, and martech.
And the list can go on. An era of smaller egos and better teamwork. It’s a Hollywood model on steroids where you – through your in-house team – call the shots and keep the strategy on the right lane.
1202 (twelve oh two)
The unforgettable afternoon of July 20, 1969, as Apollo 11 began its descent into the Sea of Tranquility, all hopes were interrupted by an unexpected mission-threatening event. A critical 1202 Error Code popped out repeatedly on the flight computer.
The cause: Executive Overflow. The computer had more tasks than it was able to process.
I tell my wife I’m on “1202 mode” when my backlog is so long that I can no longer think straight, and I either freeze and procrastinate, make dumb decisions, or both. When there’s so much to do, learn, decide, examine or approve that I have no idea where to start. When everything becomes a priority simultaneously.
Back to the story before I digress. NASA’s legendary smart Mission Control team told Aldrin and Armstrong to simply ignore the alarm. No panic. Just focus on what they could control and do best. Their team back on Earth would handle the rest. As you very well know, the story had a happy ending. The two astronauts used their irreplaceable skills, guts and instincts, and made history.
Risks and radical decisions, even of this magnitude, are easier to embrace when you’re no longer interrupted by annoying tech issues.
The corny moral is that if you want your brand to make a lasting mark – your footprints on the moon – you can use an agency to solve the day-to-day stuff so your irreplaceable, talented team can focus all of their strengths and efforts into making a superb landing.
In short:
- Empower your team to operate as an in-house agency. Chances are they’re doing it already.
- Free your company from long term contracts and old fashioned agency dominance.
- Delegate the tactical stuff (to someone who gets it, and preferably, cares)
- Choose to control what’s strategic.
Soon enough you’ll be walking on the moon.
Until next time,
