Scan the headlines and many of Adland’s creative giants are mourning the imminent closing of Barton F Graf at the end of the year. The official cause, as far as I can tell is, the inability to keep up with the changing wants and needs of the market. In other words, you’re not selling the right thing.
So this naturally raises three inconvenient questions:
1. Are agencies tone-def with what the market wants today? Talk to any agency owner and their goal is to always get a client onto a retainer and/or agency-of-record agreement. Yet talk to clients and observe their actions and you see something completely different. They’re either moving to more project-based work and/or moving more work in-house. Backing up that trend is a survey from the Association of National Advertisers which found that 78% of their member companies reported having some form of an internal agency in 2018, compared to 58% in 2013. That’s a 34% increase in just 5 years!
2. Why are marketers moving to a more project-based environment? Is it perceived cost savings? The thought that they can cobble together a dream-team of partners depending on the project? Doesn’t matter. The question I’d be asking ...what are agencies doing to capitalize on this? After all, if you’re given lemons isn’t it best to make lemonade?
3. Can agencies handle the operational and philosophical changes needed to thrive in a project-centric world? For so long it was all about the agency-of-record assignment. It meant stability. Prestige. Predictable revenue. Not in 2019 and likely going forward.
Agencies are going to need to become nimble, flexible, and adept at becoming project specialists. Gone are the days of exotic production shoots and 6-figure research studies.
So what’s the game plan then? I see three critical mind-shift changes that need to happen:
1.) Give the market what it wants. Don’t be pitching AOR assignments when the want is project-based work. Figure out how to transition to a project-centric agency.
2.) Stop wishing for the “Good old days.” The AOR era is dead essentially. Acknowledge it. Mourn it. But move on. The agencies that will thrive will be the ones who are adaptive and seize the opportunity that is presenting itself if they would only notice it.
3.) This completely changes how agencies need to approach new business. Gone are the days of landing one or two flagship accounts right away. Now it’s about project work. Lots of little hits along the way. The good agencies will figure out how to capitalize on this and work these seemingly small and disparate projects together into a string of successful projects which over time will become larger and larger assignments.
Now, being honest, points 1 and 3 of the new game plan requires agencies to complete rethink nearly everything they know. If they’re smart, and honest, about it then they can thrive. But it’s going to take the willpower to evolve.
If I was running an agency, here’s two quick changes on how I’d do it:
1.) Start productizing your core offerings. Content marketing. Website design. Creative Development. Strategy. Research. Media. Start thinking in terms of flights, not campaigns. You can likely take a look at your entire offering and start splintering off specific offerings on an ala carte basis.
2.) Start selling different. Intentionally I used the word selling there as in a project-centric world, one needs to always be selling. That means filling their pipeline with new prospects, nurturing those prospects, and then being at the ready when a prospect or two raises their hand with a project. As the typical sales close rate for a professional services firm is around 25%, it means that you need to have a number of active pitches going at any one time in order to make things work. This is going to require a new approach for most reading this. Gone are the days of wooing a couple of big clients through lunches, drinks, and other touch points. It’s time to get dirty when it comes to client acquisition. For those who have media and production departments, take a look at how your vendors in these spaces are selling you. You’ll likely notice a very aggressive, and formulaic approach. You need to adopt the same approach.
My question to you: What are you doing to adapt and evolve?