Back in the day, when I worked at Ogilvy (WPP), a huge selling point we pitched to new clients and reiterated to existing clients was how we could service all their needs: a one-stop-shop of excellence, from creating compelling brand positions grounded in unparalleled consumer understanding, bringing those brands to life in inspired, ground-breaking campaigns, and delivering meaningful engagements across all consumer touch points with through-the-line executions. Our “breadth and depth” of expertise, skills, services and talent won us a LOT of business and kept existing clients coming back year after year rather than looking elsewhere.
Bigger really was kinda better.
But today, marketers are seeing value in agency shops of all sizes.
Bigger can still be better.
Smaller can be better, too.
How can both be true? To use a phrase I heard all too often when living in Budapest working at another one of The Big Four (McCann/IPG), attól függ. It depends.
Consider how digital and the resulting sea of data has really changed the demands put on the marketing function. Today’s channel mix, media planning and buying, is more akin to day-trading a la Flash Boys (Michael Lewis) than the advantages gleaned from Good Ole Boy Networks a la Mad Men. It’s hard to understand what matters most on practically all fronts: media channels, search, MarTech, AdTech, mobile Apps, brand websites, social platforms, consumer insights, journey maps, customer experience, COEs. And on and on. Most marketing leaders continue to be challenged as they face deeper data lakes with more promising insights lurking in the waters.
Big agencies who understand and empathize with business leaders can offer marketers confidence that, by keeping their business within a big agency conglomerate, they get a depth of understanding and perspective that newer shops can’t provide in part due to their newness. They are wet behind the ears.
In addition, the promise of cross-pollination of big ideas translated into multichannel tactics and optimization still makes a ton of sense. Keep the business with the big shops because bigger can be better.
But it’s also possible to imagine why breaking up the AOR model to divvy up your marketing initiatives across a myriad of specialty shops, possibly in conjunction with keeping some parts of larger conglomerate shops, also makes sense.
The specialization of a smaller shop has a lot of justifiable appeal. They can dedicate more mindshare to optimizing a channel or capability, and more hours of specialized experts focused on a specific marketing discipline or capability ought to make for better…better strategy, better execution, better results, better insights. And possibly faster too.
Take note, however, that going down this road, using a collection of specialty shops, can put more onus on the marketing team leaders. The management and oversight that bigger shops must provide to ensure consistency of branding across their family of shops and marketing capabilities would need be delivered by the in-house marketing leadership. This will require not just a lot of time and know-how, but will also place demands on resources and budgets to deliver that kind of orchestration across agencies and teams.
If you find yourself considering how to get the most out of your agency relationships, whether bigger is better or smaller is, or a mix thereof looks just right, think about the best-practice approach we apply to practically everything we do.
- Start with your objectives. What are the critical goals you must meet as an organization to succeed in the coming years. How will you measure that success? Have you defined what it looks like and can you deliver KPIs that provide you confidence in your evidence.
- Take a holistic view of your current organizational design. This needs to include your internal teams that support all aspects of your marketing objectives, and may span beyond marketing, but also must include your agency partners. Do you have the right level of expertise and technologies as well as the right system of collaboration to enable success?
- Foster open dialogue on this decision across teams. Discuss your goals and observations of where you perceive proficiencies and gaps. Strive to clearly articulate what you see as areas of over- and under- investment and maturity, with an eye on meeting the overarching organizational goals. Give internal teams and external agency partners a share-of-voice in determining ways you might optimize performance across the current organizational design. Bring a little blue sky thinking to the topic.
With thoughtful reflection and open communication with your current teams and agency partners, you are likely putting yourself in the position to make a more informed decision, met with less skepticism and resistance, enabling you to deliver the desired outcomes. You may learn that using a bigger, conglomerate agency makes the most sense for your marketing organization based on how well they complement internal skills, talent, technology and processes. Or you may uncover areas of sub-optimal performance where you need to go small to quickly upskill your capability and improve results. By tackling this challenging question in a holistic manner you will lay the groundwork for knowing if bigger is better or smaller is better or a mix of both is the right fit for your organization.
After all, attól függ!
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You said, “Take note, however, that going down this road, using a collection of specialty shops, can put more onus on the marketing team leaders.”
That’s very true, given my own experience in B2B marketing. Also, now that more CMOs choose to in-source some of what was previously out-sourced to agencies, the leadership role must evolve as the demand for more experienced digital talent ‘practitioners’ continues to grow.
That said, forward-looking CMOs must ensure that their internal talent is capable of two key skills – 1) performing the market research assessment to expose the ‘Big Idea’ that will guide all future marketing investment. 2) driving the basic tactical marketing activities (content development) that does not require the unique creative skills that agencies might provide.
So, talent aggregation and curation expertise are key to success.
What are the capabilities you think are still best suited at conglomerate agencies?
The article addresses how the entity can juggle the decision of which route to take with their ad spend and indeed their whole marketing spend, but how often do you find yourself using your political science hat of looking to understand what this particular group (ie marketing department) is comprised of like competing leaders trying to justify their budgets and spending how they see best serves the business and how to handle the VP’s or LOB’s injunction to serve the bottom line first without risking share of customer versus adopting newer, though riskier service providers if they go with a small shop on the cutting edge for example?
Also, as to Mr. Dean’s comments… haven’t marketing departments or divisions always had to have the talent to guide the agencies activities far beyond just curating the ideas brought to the Executive level? They have been this at the high tech companies I’ve worked for in the B2B field such as Ericsson, KPMG and Airborne. They were creative leaders with not enough hours in the day to do all of the work needed, however ensuring output from the agencies meet corporate specs and image guidelines within project scope.
Regarding my political science hat, it’s always on. Being educated in political science gives you a decent understanding of how psychology, philosophy, and power mingle in any kind of negotiation or for that matter, in practically any aspect of being part of an organization. When an organization has marketing leaders sitting within different business units, navigating issues and budgets across teams can be more cumbersome and can result in inconsistencies on a lot of fronts, from the way in which agencies are briefed to the work that is put into market. It can also lead to inefficiencies. This kind of dynamic can be addressed in part by organizational structure and operations, and needs to come from the top.