I’m an agency expat. It’s been almost three years now since my last all-nighter (or all weekend-er) pitch. I thought I’d seen a lot during my 12ish years on that side of the house, but it seems like nothing compared to the paradigm shift of the past 18 months. Mergers. Expansions. Contractions. Consultancies. Fishbowl. In a word: D-R-A-M-A.
There are a few big things driving all the upheaval. For one, much of the work traditionally outsourced to agencies is moving in-house. In fact, a 2018 ANA survey revealed that 78% of companies had an in-house agency, up from 42% in 2008. Whether for cost, convenience, efficiency or other reasons, this change is proving monumental to the way the agency world has traditionally functioned.
The result seems to be specialization on the part of agencies to meet needs the in-house teams can’t yet, and most often on a project basis. This sometimes includes consulting on strategy or approach with a client and leaving the execution to the in-house agency, which is a significant contraction in scope. And to add insult to agency injury, traditional consultants like Accenture and PwC are moving into the agency space.
Considering these tectonic changes, it’s understandable that the “win (new business) or die trying” mantra has reached a new level of urgency. But while this mentality may seem like the only possibility for keeping many agencies afloat, it’s far from sustainable.
When quick wins fall short
Another factor in the changing agency landscape is the shifting value of “bandwidth” work.
Bandwidth work, or the consistent execution of a function that could likely be handled in-house but which the client doesn’t have time for, used to be many agencies’ cash cow regardless if it leveraged their core skills and competencies. For example: A few years ago, an agency looking to build long-term retainer relationships could create a social customer care team specifically for high-volume transactions and find any number of clients eager to outsource that work. As a result, agency resources often shifted from strategic, creative work to transactional customer engagements 24/7 because the work was readily available and usually at significant profit margins.
But because it doesn’t require overly specialized skill sets, bandwidth work is the most vulnerable to being taken in-house by the client. And the recent proliferation of the in-house agency has accelerated the decline in available bandwidth engagements.
What do you do when the cash cow goes to the great pasture in-house? Adapt. Rather than position themselves for burnout by bandwidth, nimble agencies are increasingly seeking deeper, more strategic partnerships with their clients that go beyond relieving workloads. Insights and recommendations based on social listening, deeper feedback based on engagement and even digital marketing coaching are all things agencies can offer with enthusiasm.
Where agencies can win today
It’s not hard to see why the movement of bandwidth (and even some creative) work in-house has gained popularity. It saves money and streamlines campaigns. It puts the brand back in the hands of the people who created it and ostensibly know it best.
But clients would be wise to remember that these things come at a cost, and agencies should arm themselves with the itemized bill in order to defend their value.
One huge advantage for agencies: breadth of audience insights. Most agencies work with multiple clients across several industries, meaning they have access to data and research that creates a more complete picture of a target audience. Let’s say an agency has a beer client and a quick service restaurant (QSR) client, both of which are trying to reach Millennial male consumers. The available insights from the beer client may provide additional perspective for reaching the audience of the QSR client, and vice versa. Whereas an in-house, brand-focused team can sometimes suffer from tunnel vision, an agency is well-equipped to apply these valuable, cross-client insights to give them a more complete view of the big picture.
Another point for agencies: Some types of marketing simply don’t translate well to in-house teams. TV work, for example, requires a much broader view of the market and audience than many in-house teams can muster. Something with the broad scope of a television commercial requires expertise not only in brand representation, but also market analysis, media buying and audience strategy. Agencies thrive when the work calls for multidisciplinary creative development and production.
Think also of resource- and logistics-heavy experiential programs as another example of where agencies come out on top. Partnerships, activations with existing entities like sports teams or festivals and wide-scale launch events that require multiple skill sets are all opportunities for agencies to draw on their experience and networks. Familiarity with collaboration across multiple core competencies is an asset many in-house teams can struggle with but is often intrinsic to agencies.
As you can see, there’s plenty of work available. But being particular about how you pursue, win and manage the work is also key to avoiding burnout.
Winning, slow & steady
“Shorter, faster, better” has become the new pitching mantra. And just as anything evolves when you work to reduce fluff, much of the traditional showmanship of pitching is being trimmed in favor of substance, relationships and problem solving.
In order to take advantage of this new-new biz mentality, you have to stay focused on where your agency excels at. Pitch existing core competencies and expand on them with your portfolio of past experience. When the time comes to learn new skills, do so on projects with familiar clients or formats, where the learning is less burdensome and more fun.
Winning slowly means being selective about the pitches you participate in and focusing on what you do best. By highlighting how your existing strengths match the client’s needs, and then using those strengths to meet those needs well, you’ll find it easier to impress clients without feeling strained. Even going “the extra mile” can become fun, rather than an effort, when all of the client’s demands are well within your wheelhouse. That makes a huge difference in client retention and referral rate—which is what will replace constant pitching.
Clients benefit from getting the best work from agencies working within their strengths, rather than an overburdened agency working overtime to get it all done. Be willing to forgo the quick wins of bandwidth work and overtime pitching in favor of playing to your existing strengths and partnering with existing clients to develop new muscles together. And don’t forget, team members working at a manageable pace and going home at a decent time each afternoon are much less likely to burn out, and more likely to produce their best work.
Do what you do best, and your reputation will follow. With this comes client retention, referrals and more time for creating, slower pitching… and maybe a well-earned vacation.
Don’t fear the retro: How open communication strengthens agency-client relationshipsPublished on July 6, 2021 Reading time 4 minutes