Tight budgets, less resource, more channels, more devices, a need for agility, the requirement to drive business growth, managing the consumer experience across the whole customer journey beyond just the marketing function – this is the reality of the modern marketing function.
To manage this complexity a CMO needs to determine appropriate team structure, ways of working, capabilities, talent and behaviours. And then there is the issue of what is the appropriate roster model for the external partner agencies and suppliers to support the business.
There isn’t an obvious answer, no ‘one-size fits all’ solution.
Based on discussions we are having with our clients it seems the sentiment, if not the current reality, is swinging back towards an integrated model to help provide some structure and framework to the very complex world of consumer engagement.
In deciding the appropriate roster model the decision must be based on a number of factors – the business and marketing objectives, the global / local balance, the maturity, skills and capabilities of the Communications, IT and Procurement teams, and the available choice and skillset of potential agency partners.
The natural evolution of the agency landscape
The term agency landscape implies some form of structure and solidity to the Agency world. The reality is, agencies are in constant ebb and flow – continually evolving and reshaping themselves through acquisition, development of new skills and disciplines, the movement of key personnel and even an office move which can help change the culture and ways of working in a team.
Beyond individual agencies there seems to be a cyclical pattern of reforming and restructuring the whole Agency landscape.
In the 80’s the media discipline broke away from the full service Agencies, which triggered other disciplines, such as direct marketing and sales promotion to set up as specialist agencies too.
The Communications and Brand communities became increasingly obsessed with specialisation, with silo’d activity led by those who claimed the deepest knowledge in their particular Communications channel.
There simply was no longer one place you could go and get it all and if Agencies claimed you could under an ‘integrated’ banner they simply weren’t believed.
But by the 00’s things had moved on again. Brand teams had less time to manage the pressures and complexities of a roster of ‘best-in-class’ specialist Agencies. This combined with budget pressures at the latter end of the decade meant that any duplication of resource amongst a roster of Agencies was hard to justify. So a desire for more integrated agency rosters emerged.
In the last five years the number of agencies on rosters has expanded again to incorporate a plethora of specialist content and digital agencies to service the consumer-centric engagement model.
Already the larger network agencies and integrated marketing Agencies are incorporating these Specialists into their businesses and the trend is moving back to the integrated roster model, in many cases incorporating ‘guest’ Specialist agencies delivering unique expertise when required.
Interestingly integration is being approached from different ‘directions’. The traditional ATL marcomms agencies are absorbing and developing digital and content marketing capabilities to create their integrated agency model. And from another direction some of the business consultancy or digital transformation experts are acquiring creative and communications skills to create an alternative integrated model. So the landscape has evolved once again.
The mechanics of roster modelling
At Roth Observatory we guide many clients in defining their new agency roster model. We’ve seen clients with 500+, 600+, 700+ ‘agencies’ on their roster. Of course they are not all agencies, there are many sub-suppliers, production companies and service providers – such as catering or logistics. But they have crept onto the roster and are complicating the vendor management programmes. But even once these have been reallocated there are perhaps 200-300 ‘specialists’ left. What we find is enormous overlap in the services and capabilities provided – creating significant inefficiencies for the business. And it is also where we get the most resistance from within the organisation. Apparently some of these suppliers are “the only people that can do this”, or “I can’t deliver my campaign without them”! But undertaking these rationalisation exercises is only half the battle. Managing change within the organisation to ensure rationalisation works is key.
In order to really define and build an appropriate roster model it is necessary to understand the current and future Scopes of Work, what the core objectives are for the business and across the customer journey – because the need for agencies extends beyond just the Marketing function, the level of in-house / out-sourcing required, spend and budget allocation across different agency disciplines and capabilities and the central / regional / local structures if appropriate.
The benefits of agency roster rationalisation and modeling are significant at various levels:
Enhancing the skills and capabilities of the marketing team: involvement in the process of reviewing current practices and processes, and helping to frame a new roster enhances the skills and capabilities of the team and gives them a clearer perspective of their role in the marketing process – which in turn improves moral and motivation.
Great value from the agencies: greater Brand and messaging consistency, with fewer briefings and clearer understanding leading to better work ultimately. The greater stability and clarity of the roster enables deeper, longer relationships that reinforce understanding of the Brand and markets.
Simplified processes and efficiencies: for the Marketing team less time is spent pitching very small items of business and more time is focused on strategy and marketing and functional coordination. On the Procurement side there is a reduced cost and effort in managing a vast vendor portfolio plus increased purchasing power.
Reduced costs to the business: our experience has seen savings of 10% upwards in agency fees and production expenditure.
The argument for an integrated roster model
At the recent ProcureCon conference in London the view was presented that the CMO’s trust in their agencies is diminishing. The root cause of this, it was argued was due to the increase in suppliers on the marketing roster (agencies, production houses, freelancers, consultants, etc.). This fragmentation was leading to a dilution of responsibility and a feeling by CMOs that they lack trustworthy partners to help them achieve their objectives.
A similar perspective was articulated by Keith Weed, the Unilever CMO at the Cannes Lions. “Now we have specialist individual agencies handling mobile, data, social and whatever’s just around the corner. The issue is that each of these specialists is channel-focused, optimising the best solution for the channel – the best mobile activation, the best use of data, the most interactive social-media campaign. What I need is the perfect combination that works best for the brand. We need “always on and “always on-brand”.”
Sir Martin Sorrell of WPP has argued: “Clients, especially in times of caution and financial conservatism, value the economies of scale and efficiencies that come with working with a large group. The primary attraction of the model is that it offers a much simpler route to a much broader range of talent, services and resources than dealing with a large number of unconnected agencies.”
And in their recently published report – ‘The Future of Agencies’, eConsultancy in partnership with Adobe, describe a new style of full service agency emerging from, and in, the middle ground of creative agencies and business transformation consultancies. These new ‘agencies’ provide integration from front end marcomms through data and analytics, the customer experience, digital transformation to technical and business consultancy.
So there are a number of industry ‘heavy-weights’ arguing for the integrated model (although at least one of them has a vested interest).
What therefore is the argument for specialists?
There are a number of key dynamics driving an on-going requirement and viability of Specialists:
- the sheer size and pace of change in technology, channels and consumer engagement mean that new capabilities emerge all the time which give birth to new specialist agency disciplines
- some clients want the best-in-class specialist-focused capability rather than what they see as generalist integrated agencies
- the continued focus and attention on Content Marketing which by its nature covers multiple “disciplines” e.g Digital to print
- many companies are achieving business growth and transformation through innovation – whether that is through NPD, packaging, retail experience or differentiated communications channels – these disciplines generally require specialists brought in from time to time rather than on a retained basis.
- even within an integrated model, there is a requirement for specialist skills in some key areas, and it enables the roster to flex as the Scope of Work changes – particularly as planning and implementation cycles shorten in a consumer centric engagement model
There seems to be a natural cycle in the agency landscape moving from integrated to specialist and back again. In contrast, the tendency for Brands and companies is to see their agency roster gradually expand until it becomes hard to manage and counter productive. Contraction doesn’t happen without deliberate intervention. Therefore from time to time a roster review and re-modelling is essential.
And enormous commercial benefits can be achieved with a roster review – lower costs, more consistency of work, greater efficiency and effectiveness, enhanced team skills and capabilities and improved morale and motivation.
The sheer pace of change in consumer engagement is having ripple effects on how companies organise their resources, ways of working and capabilities. Having the right agency roster in place is a key component in managing that complexity to enable the business to focus on its purpose and provide it with essential support.
The integrated agency roster model seems to have emerged as the mechanism to cope with this complexity and pace.
The writer is Richard Bleasdale, managing partner Asia Pacific of Roth Observatory International.
[Image from Shutterstock]