In today’s world of integrated marketing, numbers have been kings in measuring the success of a brand. Market research, data analysis, accountability and attribution are key success factors for every marketing campaign.

This new paradigm of marketing shed the light on certain gaps in the relationship between ad agencies and their clients in numerous aspects; clients have been debating how much control should be given to the ad agency, to a point one would dare to question if ad agencies will still exist the way we used to know them.


1. Clients believe that media fragmentation is costly:
Online media has added a layer of complexity to understanding consumers through different metrics used in social, search, mobile, and display. With ad agencies specializing in a specific medium, clients usually have to deal with multiple agencies for the same campaign which ends up being very costly with no guarantee for integrated messaging.

2. Clients seek a meaningful dialogue with their customers more than ever before: Brand executives are now aware the importance of establishing stronger relationships. They understood that direct access to data and customer information is crucial for a successful relationship. That is why some brands with long history with ad agencies, such as PepsiCo and Campbell Soup, decided to bring their advertising in-house by taking the power away from agencies or by changing agencies after decades of collaboration (i.e. Dr Pepper Snapple Group and MetLife with Y&R).

3. Managing advertising in-house is more cost-effective for smaller companies: Smaller clients realized that hiring marketing analysts and consultants who are part of the company will make their marketing team more effective because they would better embrace the vision and goals of the brand. According to Digiday’s “5 Ways Brands Are Cutting Out Agencies”, service providers (i.e. BuzzFeed and Yahoo) not only help their clients track and understand their performance but also help them generate better stories for their brand. With this in mind, cutting out the middle man is an effective solution.

4. Agencies consider that they are undercompensated: while clients feel that they overpay agencies due to the fragmentation and the effort of coordination among the different players, agencies on the other hand, “feel” undercompensated given the creative ideas that they offer to their clients. Moreover, they often need to share profits with many other agencies working on the same campaign. According to Mr. Clow head of TBWA-a worldwide advertising agency “Throughout his years of working for agencies, he realized that agencies contributed great ideas to clients, which later became assets to the brands. The lack of recognition leaves agencies with more bitterness that reward.”

5. Client’s business model are often not understood by agencies: Forbes article “Getting To The Bottom Of What Clients Think Of Agencies” states that the agencies economic model is designed to suit the agencies themselves, by focusing on a technology or a medium, rather than the actual business needs of their clients.

6. The relationship between agencies and clients is reduced to the creative brief: So far the creative brief has been the most important means for agencies to understand their clients’ requirements. Results from a survey conducted by Forbes in 2012 revealed that 82% of the clients see a need for better briefs, while 67% see a need to better align client/agency teams to create collaboration rather than having agencies execute. Almost 47% of the respondents believe that training for the agency team is necessary, while 41% believe that clients need to do a better job of fighting silos at their end to ensure a better collaboration with agency.

How much control should or should not be given to the agency is just the tip of the iceberg. The underlying relationship and a thorough definition of the roles of each partner seem essential. It is maybe true that agencies need to reevaluate their value propositions and evolve their economic model in ways that strengthen a sustainable collaboration with their clients. Or maybe, without wanting to restate the obvious, if customers were truly at the center of marketing strategies, then these inefficiencies could be bridged both from the client and the agency side.

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http://boomagers.com/blog/agencies-age-aging-identity-crisis