Agencies will have to navigate the demands of clients and talent in the year ahead. As the calendar turns to 2021, agency culture must meet the needs employees or risk losing that talent to competitors of one kind or another. Clients increasingly expect agencies to be able to demonstrate long-term business value while working faster to satisfy constantly evolving workflow demands. 2020 also accelerated calls for agencies to expand expertise into digital channels and ecommerce in response to lasting changes in consumer behavior.
The traditional skills associated with crafting arresting visuals and copy, along with analyzing the pricing and placement of those brand messages, remain at the core of what an agency does. But the days of that being the only thing agencies do will be over in 2021. And North CEO Rebecca Armstrong is blunt about what it means for agencies that haven’t adapted.
“If, as an agency, you haven’t considered how to insert yourself as a vital collaborative partner across all points of the purchase cycle — especially at point-of-sale — then you’re f*d,” she said.
Armstrong cited a McKinsey study finding that the pandemic collapsed a decade of ecommerce adoption into three months. Over half of consumers plan to continue to utilize curbside pickup and grocery delivery after the pandemic, according to CommerceHub.
“Clearly this has staffing, organizational and positioning implications for agencies,” Armstrong said. “We need specialists and we need to figure out where they belong in the nexus between creative and media—and we need to convince clients that we can do this.”
Agencies are under more pressure than ever to balance long-term brand building measures with managing costs and demonstrating a clear return on investment in ad spending.
Advertiser Perceptions CEO Randy Cohen explained that agency execs seemed to lag behind their client-side marketing counterparts in viewing forms of paid advertising as an investment. In a survey of 300 such execs, Advertiser Perceptions found that two-thirds of marketing execs viewed all forms of paid advertising as an investment, versus one third at agencies.
“That’s a critical gap agencies must close to stem the tide toward consulting firms and in-house operations,” Cohen said. “They can’t close it by spending money more efficiently and demonstrating audience gains. They must prove the impact of campaigns on brands’ bottom lines.”
“The pandemic intensified the urgency of a real value proposition—an authentic delivery of a service that advances the client’s business in meaningful ways,” Greatest Common Factory founder, strategy lead John Trahar explained, citing a need for agencies to display how every aspect of the work they do for clients directly contributes to business goals and to staff accounts with talent that contributes measurably to such goals—something he said will require agencies to build “a more multi-talented, multi-disciplinary staff.”
Worldwide Partners CEO John Harris explained that while agencies have proven their ability to evolve before, the changes required now are “not about simply building new capabilities, developing new pricing structures, or exploring new operating models; it’s all of those, and more, concurrently.”
“Core to the rebirth of the agency model is making the transition from service provider to value provider, and in so doing, establishing a framework that enhances agency remuneration,” Harris said.
Agencies are competing for talent not only among each other anymore. Their new hiring rivals are emerging in the form of brands’ own in-house agencies and growing freelance networks. The additional avenues for ad industry personnel underscores the need to develop a culture that attracts, fosters and retains staffers. Startup agencies are also popping up with models designed to leverage such talent networks to build custom solutions for clients.