Why the future agency model needs to be fast and fluid
Is there such a concept as ‘doing things the traditional way’ anymore? In everything from digital advertising to crowdsourcing and mobile marketing, the standard model doesn’t exist.
Equally, the speed of evolution in marketing has meant that brands have had to take a great deal more control over their process. If you want to be agile, responsive, real-time – there’s no space for multiple layers of iteration and approval before you act.
Of course, this doesn’t mean that the agency model is now redundant. There is still a great deal of space for expertise and outsourcing. Innovation demands specialist help and the portfolio agency approach to advertising and media management is becoming the norm.
P&G’s Marc Pritchard has always been outspoken on the role of agencies and the ability of brands to control their communications. Larger companies like the packaged goods giant have had the luxury to capitalise on start-up culture and develop their own ‘in-house agency ecosystems’. P&G created around 130 of these start-ups in response to marketing demands, while Unilever is investing around £1.15bn in 2019 in hiring people for digital hubs. In 2018 it had already announced an on-site collaboration between Unilever Foundry and WPP to provide solutions from the group’s agencies for its 400+-strong product portfolio.
Brands want to in-house for a number of reasons. Certainly, if they’re large enough, the economies of scale of hiring their own experts and building their own teams work out. Close to the business and decision-making, they’re able to be highly responsive to changing market conditions and tend to have greater liberty to innovate and experiment while staying aligned with brand values. They can combine this new approach with the use of emerging technologies like AI, which have the ability to give them efficiency in their media planning.
But, as Unilever’s partnership with WPP demonstrates, a combination approach can be hugely effective. A further example with CPG peer, P&G, shows the success of the multi-agency model. Woven is headed up by executives from Grey, Leo Burnett and Saatchi & Saatchi. It focuses purely on P&G’s laundry care brands including Tide, Gain and Bounce. It’s an opportunity to take the best people from across the industry and have them collaborate in a unique setting, giving them the chance to combine their knowledge with technology to create a unique bespoke offering for P&G, that is currently unrivalled in the market.
Woven handles media planning for this business unit alone, as well as managing its digital buying and TV partnerships. It has taken the often siloed activities of advertising, online and product placement or content into a single, omnichannel movement where TV spots were supported by ads and content and the relationship between different media experts allowed for a smooth transition across the various activations.
Relying on a single agency today creates more challenges than it solves. Aside from the natural bias that exists within a single entity, it becomes harder to integrate activity, both from a pure workflow point of view as well as a creative perspective. There are of course some new technologies that are being put in place to avoid the bias that can come from working with one agency. For example, AI can be used to assist with planning, ensuring that budgets are being allocated to ensure the best return on investment. By equipping the in-house team with staff and technology to execute on one level, while supplementing with the expertise of multiple agencies unifies the approach.
Could using the portfolio, ‘as needed’ approach to agency support be a false economy? The figures don’t seem to bear this out. Unilever reported that it saved 500m Euros on marketing in 2018 by creating “more content in-house while making existing assets go further”.
Another example of this is Vodafone, who set up teams in 11 markets to take its biddable, digital media buying in-house and the company, claiming that its biddable media would become 10-15% more effective in the first year of in-sourcing, with 70% of that improvement from media efficiencies and 30% from savings. It’s another example of a major brand demonstrating the benefits of in-housing over relying on a particular agency.
By using technology, such as Vodafone has, to perform the more routine tasks, agencies are freed up to take on the necessary consultancy, creative and innovative roles they play best. It’s important to remember that agencies are by no means going to become insignificant, but brands will start bringing the agency expertise in house to minimise wastage, eliminate bias, and ultimately create more efficient campaigns.