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Once upon a time, global agency networks were created to help brands achieve their ambition of global expansion. Set up an office in a new country and sell your clients' products to new people; it was that easy. So easy, in fact, that we saw a plethora of agency networks—predominantly from the USA—spread around the world to handle their increasingly global clients. Now, decades later, there are so many of these agencies in existence that most holding companies are struggling to find a need for all of them. So how do agencies in this era identify a purpose and ensure a long and prosperous future when simply being global no longer guarantees success?
The regional hub-based model
During the initial quest for globalization, agency networks established offices in major cities around the world in an effort to cover ground and infiltrate new markets. We also developed custom, albeit duplicative, communications in each market. But over the years, as our global marketplace became increasingly interconnected, this approach became antiquated, especially as clients came under pressure to reduce marketing costs and achieve greater efficiency. In response to these cost-saving pressures, the industry began migrating to a new model—one that centered around strategically placed hub offices across the globe that allowed for the development and execution of regional and multinational campaigns. In this way, clients' biggest problems could be tackled cost-effectively and consistently, allowing businesses the competitive advantage inherent in a truly global approach.
This phase was driven by the need to increase efficiency, and though not as pioneering as what came before, it was a necessary evolution. It also gave rise, in part, to the micro-network model employed by agencies like Wieden + Kennedy and BBH—agencies that create global work with a handful of strategically placed offices around the world.
The importance of integration
The phase that followed was perhaps more challenging and revolved around the increasing need for integration. Media fragmentation had made it more important than ever before for marketers to ensure that their various strands of communication worked together in a more seamless and uniform way. Many networks responded by acquiring and smashing together agencies (often painfully)—advertising, CRM, digital, social, shopper, experiential, PR and more—to create one-stop integrated shops. This period saw the rise of the integrated agency and along with it the holding company approach, which allowed clients to access integrated capabilities essentially through one relationship with the holding company rather than any single agency. Interestingly, few agencies managed to integrate—or re-integrate—media and creative. The holding company model has generally been the chosen vehicle for reuniting these siblings.
Navigating our tech-infused culture
So now that we've mastered (more or less) being global and integrated, what's next? What are the new requirements for success for global, integrated agencies? How do we anticipate the next evolution in our model and future-proof ourselves?
Agencies have always succeeded by helping solve their clients' biggest problems. Therefore, the next generation of great global agency networks will become so by helping clients understand and navigate the complexities and new realities of our modern, tech-driven culture. Technology has changed everything in our world today and created both huge opportunities and new threats for clients. In order to succeed, agencies should focus on ensuring that their clients are best positioned to take full advantage of all that the ongoing tech revolution will offer.
To do this, we need to continue to offer best-in-class creative, strategic and production capabilities, but we also must understand technology in a way that is both instinctive and exhaustive. The ability to accurately predict the future—the next hot trend, piece of tech, topic of interest or platform—is best cultivated by a deep knowledge and close proximity to developments in the marketing tech world. One way this closeness can be achieved is evidenced by agencies like R/GA and indeed ourselves at KBS. Both have established venture capital divisions that invest in seed-stage marketing technology startups. Having access, early on, to the latest tech innovations with the potential to solve big-business problems gives agencies early insights into applications for their clients—and their clients the power of early adoption.
Swim upstream to opportunity
Today social, media and technology platforms emerge, take over, fade and die with an almost breathtaking rapidity. Hardware and software change overnight—and consumer behaviors with them. That presents the threat of radical disruption to whole marketing categories and our established clients within them.
But, as we know, threats are also opportunities. If we see our jobs as helping clients fend off those threats and seize those opportunities, we can exceed the incremental growth (or worse, stagnation) of recent years, and make ourselves the indispensable partners we've always yearned to be.
Guy Hayward is the global CEO of KBS (@KBS_agency), co-founder of 180 Amsterdam and native internationalist.
This story first appeared in the November 14, 2016 issue of Adweek magazine.