20th May 2020

Is tomorrow’s integrated agency model here, today?

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Both the integrated agency and digital agency models have changed massively over the last 10 years. And as we all know more change is a-coming.

The integrated agency back in the day

There was a time back in the 90s when integrated really meant full service; the agency that tried to offer all things to all clients. Everything from brand advertising and media, to sales promotion and PR. Apart from the big groups and larger networks who could afford to hire a raft of specialist talent—albeit with associated ‘specialist’ fees—many full service agencies turned out to be a jack-of-all-trades. And inevitably, master of none.

The dawn of the new agencies

After the dotcom crash in 2001, recession followed. Marketing budgets were slashed and clients’ needs changed. And many began to realise that it wasn’t effective to buy all their marketing services from the same place.

At the same time, most client-focussed agencies realised they had to offer something with a point of difference. So agencies started getting a bit smarter about their positioning and proposition to clients. The emergence of the specialist agency was swift, with a new wave of brand response, PR, CRM and digital agencies springing up.

More and more digital agencies evolved and grew, or began to take shape. Either as small start-ups, or as design and direct marketing agencies, with many repositioning, renaming and rebranding themselves as the agency of the moment.

However, most ‘digital’ agencies were often just focussed on selling products. Products which were mainly in the form of websites, which, to be fair, in most cases was what the client wanted, at the time.

But over the last 15 years what the client wants from an agency has changed significantly. And still continues to do so.

And the agency which not only keeps pace with that, but actively stays ahead of that particular curve, is the agency that will thrive.

In fact, in 12 month’s time the agency landscape is probably going to look quite different, driven in-part by client demand and the impending impact of the world’s biggest recession.

Clients now have new pain points. New business priorities. New ways of working. Which means they are probably going to need something quite different from their agency partner.

So, what do clients actually want from their agency?

In most cases, the client’s brief is driven by the need for some kind of deliverable, most often some form of technology, media or creative.

In reality, what they really need is an outcome or a measurable result. This is usually in the form of registrations, sign-ups, clicks, calls, optimised conversion rates and ultimately sales.

It simply has to be measurable. Because as long as it’s measurable, we can rate its effectiveness. What’s worked? How? And why? And ultimately, what was the return on marketing investment?

As we head into this new post COVID-19 world, the need for clients to demonstrate ROI for every penny they spend has never been greater. And some agencies will be better prepared and better-suited to meet this need. Just like the 2001 and 2008 recessions, this one will mean that agencies, like every other business, are going to have to adapt to meet the changing needs of clients.

And what of the digital agency?

The digitally integrated agency model will be the model of choice. Driven by customer insights and tapping into real human truths, combined with the logic of science, data and analytics. People have talked of logic and magic before, but this time, as a tool, it has never been so powerful—in the right hands.

Digital agencies could claim they’ve always done this, and should own this space, but others might argue that at the heart of most digital marketing briefs is a data brief.

After all, most digital marketing agencies were born out of the same principles developed by direct marketing pioneers like Lester Wunderman in the 1960’s. They used data to deliver the right message, to the right customer at the right time, measured all campaigns, then tested, and applied the learning to refine the activity.

Today there is a massive range of technology and tools available to clients and their digital agencies, which has enabled them to take this one step further and use data, segmentation, targeting and measurement, to test, learn and refine activity in real time. In fact, to plenty of creatives’ irritation, some AI technology will also write the ads!

But, there’s a but!

However! And this is a huge, great big BUT! Whilst I’ve mentioned that the tools must be in the right hands, I’m referring to both agencies and clients.

As technology has progressed at what seems an exponential pace, there always seems to be a senior marketer ready to stand up and discuss the latest innovation as the silver bullet to all our profit-making dreams. Of course, innovation in advertising and marketing isn’t a bad thing per se, but you need customers to buy-in to what you’re saying, not so much how you’re saying it.

In other words, it’s always been about the idea. If this lockdown period has shown us anything, it’s that brands don’t need to start with AI to connect with people. They don’t need the latest Snapchat filters. They do need to start with what they’ve always needed; human insights and touching stories which strike a chord and make people laugh, cry, react and ultimately respond.

But what of the state of creativity—or effective marketing—in a crisis?

Historically, creativity and its associated effectiveness at achieving ROI has taken a hit during major recessions. Renowned strategy consultant, Julian Cole’s recent study* supports this idea. Consumer spending dramatically decreases and if brands are advertising at all, they are playing their marketing budget cards safely with a huge rise in sales messaging and discounting. But research into the 2008 recession shows that consumers respond more to basic human ideas and desires, including escapism from the reality, everyday luxury and value over sales.

But shouldn’t tech help us create better campaigns?

It can. And should. But only if the people responsible for the campaigns—both agency-side and client-side—use it in the right manner. Indeed, a recent report published on LinkedIn Marketing Solutions Blog^ corroborates the idea that marketing effectiveness has declined since the last recession.

The problem seems to be that many people are shifting the focus from the creative to the tech. To put it another way, many marketing briefs, instead of saying what we are trying to achieve first, are saying what channels or innovations can we employ, first.

The technology is becoming a crutch which is in danger of not only dampening creative effectiveness, but ignoring it completely.

The key is to work with partners who can create ideas that truly connect with people. Then use the tech to deliver, measure, manage and improve the effectiveness, continuously.

Together painted on a board

An agency doesn’t have to be big to have an effective integrated offering to serve a wide range of client needs. But it does need to have to the right team, with the right experts to work directly with clients—as true partners. A team that can quickly and effectively pull in the expertise around the table, or as it is at the moment, around a hangout or Zoom call, from creative to insight, from digital marketing to performance media, development and technology innovation.

And, it’s that nimble, fleet-footed response—and more often-than‑not, proactivity, that clients want, and indeed, need, more than ever.

The fact is, smaller integrated agencies are often more agile. They’re not restricted by the competition for profit between separate internal teams. They can offer a much more holistic approach—without internal politics slowing the process or dulling the impact of the response.

It’s about offering more value to the client. Value for time and value for money.

The effective digitally integrated agency is much more likely to be independent. Which is beneficial to clients with agencies on rosters. Independence means being in a better position to partner and work collaboratively with other specialist agencies where they don’t have the skills or knowledge in-house for a specific client requirement.

Not to mention, flexibility. If the digitally integrated agency is smaller, independent and simply more autonomous, it is more flexible in the way it works. And that means more streamlined, fluid processes, focussed on the way the client works, not the agency.

 

The author, Ben Rees is Joint MD of Creode.

 

Refs:

*Creative Campaigns in a Recession https://www.planningdirty.com/resources/creative-campaigns-in-a-recession

^Are people responding differently to ads today? https://business.linkedin.com/marketing-solutions/blog/content-marketing-thought-leaders/2020/what-should-ads-look-like-in-the-time-of-recession- Orlando Wood, CIO, System1

Image credit: Adi Goldstein