Looking back at my latest post in October, it seems like this subject keep coming again like some vampire after blood. Last Friday, Digiday published an article on the future of agencies, quoting some major companies CEOs on ‘how to find innovative ways to keep ad agencies relevant’ (read here). There is a lot of truth in their vision: the clients have gone smarter and the agencies have lost their legitimacy in some ways as to how to drive the strategy, the technology or simply their business. However, this doesn’t explain we got into this situation. I believe there are some deeper reasons for questioning our current ad agencies model.
Clients don’t choose Partners, Procurement select Suppliers
The trust is broken between client and agencies. It is no more question of working with the partner agency that can best deliver the campaigns or the strategy. Clients don’t go to the best agency anymore, but to the cheapest. Procurement has won the power to select the agency they will contract with, over the marketing director. As a result, budgets are smaller and smaller, timelines are tighter and tighter – despite the fact that the technology has gone smarter – and agencies staff is paid less to deliver more. Even publishers have tightened their lunches’ budget and tend to go direct to the client to close the sale (Google just to name one example).
Client Services are struggling to deliver
Client services are no longer leading the client. They are tyrannised between creative queens, production nazis and clients whims. I believe client services teams – to which I belong since I started in this industry 10 years ago – has a massive worry around the orientation agencies are taking. Despite our great records and knowledge, despite our seniority and the number of direct reports we have, it is time to admit that the current model is not working for any of us. We have become the soldiers you send to the front on the battle, and who rarely survive and come back. The Millennial Generation is very unlike to find any stability in companies where we change constantly: the management, the strategy, the client, the budget… The reality is that there is too much turnover to sustain the agency model.
There is no Talent Management and Retention
No, this in not linked to a lack of skills or to being too slow to adapt to the technology. We have the right talents in agencies but there is a total waste of them because there is no talent management as such. Human resources are nonexistent in providing ongoing training and support, even mentoring which is the new trend we are meant to buy in has no reality. As a result, we now train young prodigies to better let them go to our competitors. In brief, agencies struggle to identify, select and raise the talents of today to make them the starts of tomorrow.
Diversity in agencies is a utopia
We see 90% of women on the bottom of the pyramid while only 1% of them reach the board. Again, agencies have evolved with the technology but have failed to evolve with the way we live now, which is having more balance and flexibility. The old model is dead ; we need to review how we work together. With the explosion of digital over TV and print, it is clear that we don’t need to physically go to our office anymore to be able to deliver the work. Our clients have already adopted this, but we are still locking people to their desk and providing them with little options to manage their spare time or their families. Agencies have failed so far to keep women in the industry and to bring them to top management level, as a result boards have become a boys club where you can hardly enter unless you have sacrificed your born or to be born children.
To summarise, yes the current model of agencies is obsolete. Yet, advertisers still need agency to work with them and to bring this spark of innovation into their day-to-day work. It is for the senior management and CEO to urgently wake up and bring a real change to how they manage their staff and their clients. They have all the tools, but a lot of them lack leadership skills to bring Generation Y and Millennial to follow them. The new model is maybe emerging under increased freelancing and 1:1 consultancy work…