Agencies Need to Break Down Old Barriers to Experience a Necessary Transformation

Our Adweek Advisory Board shares their expertise on the industry

Whether you're immersed in the agency world or on the outskirts of it, you're sure to notice that massive change is occurring.
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It’s no secret that the agency world is undergoing some drastic changes, and there’s much discussion about what the future of the industry will even look like. How will holding companies transform? Will the agency landscape even be recognizable anymore? On top of the structural changes, the industry is undergoing changes in hiring practices as it becomes more aware of issues related to diversity and other shortcomings in talent recruitment and retention.

We asked our Adweek Advisory Board—comprised of 24 leaders across marketing, media and technology—to weigh in with their thoughts about the future of agencies, the benefits of consultancies versus agencies and how they can instill better hiring practices to bring in more diverse talent.

Breaking down old barriers

Part of the overall change in the industry is coming as consultancies and agencies are evolving and the lines between the two are blurring.

“Traditional consultancies are now offering creative solutions and agencies are participating more in strategic business conversations,” said Terrance Williams, CMO and president of emerging businesses at Nationwide. He continued, saying that agencies are still at an advantage, though, as “they typically attract richer creative talent, engage in longer-term relationships and have deeper knowledge of [a] brand and [its] consumer.”

Baiju Shah, chief strategy officer at Accenture Interactive, pointed out that “traditional models will yield traditional outcomes.”

Shah continued, “We were designed from the ground up to not just deliver great ideas or ads but deliver great business outcomes, bringing together great advertising, design, technology and business strategy.”

As the traditional business model starts to dissolve, large established companies can look to emerging businesses for inspiration.

“Companies today are demanding a stronger value proposition from their agencies, big firms continue to be under pressure, and companies like Collective IQ, [a Canadian based open-architecture professional services consultancy], who can deliver best of breed talent without the inflated overhead cost associated with the traditional model will prosper in the next evolution of the agency model,” said David Mondragon, CEO of Triton Automotive Group.

He continued, “Projects are too inconsistent and need to support full-time staff. … Consultancies are vying for work traditionally done by agencies, and they are winning a growing share of market with nimble low-cost approaches and more diverse capabilities.”

Diversifying the talent

With the #MeToo movement growing in the advertising industry, diversity is top-of-mind for recruiters and agencies. Lack of people of color and women in the workplace is being recognized as the problem it is, especially for top-level positions.

“Agencies are influenced by clients, just as we are influenced by our customers,” Williams said. “Our members are more diverse now than ever, so we’ve needed to invest substantial effort and dollars into our own diversity initiatives. Our agency partners have taken notice and are mirroring our investment.”

Building off that, Lamm said, “Agencies would benefit by bringing in a greater diversity of experience and backgrounds to their firms to enrich and challenge the norm with new perspectives, but that’s not enough. What is considered less, but I think is even more powerful, is if an agency can cultivate a diverse portfolio … a diverse portfolio shows a client that they can work with a wide range of talent and strategies and understand different markets.”

Forming the advertising industry of the future

It’s obvious from both inside and outside the industry that it’s changing and the future isn’t going to look like the present. “The AOR model is dying,” Mondragon said.

There are a few things they can do, though. And it mainly centers around agencies making themselves invaluable to their clients.

“I see two main trends as pushing agencies into irrelevance unless they change dramatically,” Ben Lamm, co-founder and CEO of Conversable and Hypergiant, said. “The first is just that the digital era demands a more interdisciplinary rather than specialized approach, and few agencies are actually nimble enough to move as quickly as is needed in today’s environment. … Secondly, marketing today is driven by authenticity, and bringing in an outside consultancy to help you sell your authenticity is ludicrous.”

This is a sentiment Peter Naylor, senior vice president and head of advertising sales at Hulu, shares. “Agency’s need to become indispensable to their clients,” he said.

Naylor continued, “Providing services that are indistinguishable from their competitors will not be the key to earning the monthly retainer. With the velocity of change in our business at an all-time high, now is when clients need their agencies guidance and expertise in so many areas like AI, blockchain, 5G, IoT, autonomous cars, attribution, branded content, data. … Creativity skills are a must for the agency of the future as brands try to grapple with their purpose.”

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