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Big Agency Alternatives post-Sorrell: Marketers Go Small and Inside

By Jay Wilson | May 03, 2018 | 0 Comments

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For an industry already in a state of confusion about its future, the resignation of Sir Martin Sorrell of WPP following an internal misconduct investigation was another jolt to the fragile global ecosystem of agencies struggling to redefine themselves in the face of new competition and rapidly evolving client needs.

The future of WPP post-Sorrell has been debated widely, with some expecting investors to demand the holding company shed assets.  Where those assets – from PR firms to creative agencies to market research and data holdings – end up is anyone’s guess, but it would be unlikely to see a Publicis or Omnicom make a play for any of WPP’s flagship agencies.  They’ve got their own internal consolidation and alignment issues.

More likely, interest will come from te management consultancies, already on acquisition sprees, and for whom an Ogilvy or JWT would be the badge of creative credibility and executional scale they’ve been seeking in recent years.

But many marketers we speak with are shying away from pursuing big holding company agencies and management consultancies, like those we profile in our annual Magic Quadrant for Global Digital Marketing Agencies.  Few question the value these partners bring to the market, but we often hear reticence to commit to long term engagements with “heavy handed” management consultancies, or to invest in the perceived high cost of a blue chip agency partnership.

For their part, the big agencies, focused on developing business consulting chops in the face of new competition, as well as evolving CMO needs, are in some cases eschewing prospective client work that doesn’t advance that vision – we recently spoke to marketers who’ve taken by surprise by their agencies’ decision not to do basic marketing campaign work, leaving those clients scrambling for alternatives.

Those alternatives increasingly include taking work in house – 21% of marketers we surveyed rely heavily on agencies for strategy and execution currently, but only 11% consider that ideal. In particular, marketers would prefer to rely on agencies less for strategy, and want to invest in those capabilities within their walls.

Other options clients are turning to include managed services from technology partners, and, in many cases, from the small and midsize agency and consultancy market. As Chris Ross and I wrote in late 2016, marketers have much to gain from smaller, more agile, less expensive agencies and consultancies.

What alternatives are right for your brand depend largely on your internal capabilities, and the nature of the work itself.  In Designing Your Marketing Team for the Next Decade, Chris takes on many of these insource/outsource questions, and presents frameworks to help you make the right decisions. This week, clients will receive a curated library of research and news content around the marketing services provider landscape, including trends and advice to help you understand this rapidly changing world of partners.

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