One in 10 brands say current agency model fits future needs
Only one in 10 (11%) major multinational brands surveyed by the World Federation of Advertisers (WFA) and MediaSense said they believed the current agency model fits their future needs.
Rather, a quarter (24%) said they believe the current agency model is “unfit for future purpose.”
That is according to the latest Future of Media Agency Models report by the WFA and MediaSense, which found that while traditional holding groups still “have their role to play,” a “new breed of agile, specialist, tech-focussed agencies can also add measurable value to a more centralised media model.”
The study found that while nearly all (92%) of the brands surveyed believe speed and agility are important, just 31% are satisfied with how their agency delivers in this area, creating a gap of 61 percentage points.
“Clients are looking for a more ‘networked’ model, where global agency capabilities can be leveraged to unlock speed, agility and talent,” said Danone VP and global head of media & integrated brand communication Catherine Lautier. “Yet this new WFA and MediaSense research reveals that the gap between expectation and reality is found to be largest for these very attributes. So, as an industry, we have work to do to come up with the models and approaches that unleash greater effectiveness.”
Similar gaps between expectation and reality exist in the areas of automation (66 percentage points) and talent (50 percentage points).
Nearly half (45%) of the 70 multinational companies surveyed said they are looking for more flexibility in the way they are served, and more than a third (37%) described that they are looking for “simplification through fewer and better integrated partners.”
The report also found that despite media and creative requirements remaining distinct, a quarter of brands surveyed plan to consolidate media, creative, data & technology.
“The past three years have been transformative for the advertising industry with brands and agencies on a march to unlock much needed capability, integration and speed,” said MediaSense managing partner and report author Ryan Kangisser. “The blurring of lines between the different marketing disciplines is accelerating this, highlighting the need for agencies to evolve their models from channel to consumer centric.
“Although we may not be seeing media and creative coming back together (just yet), this study reveals a clear intention towards integration with an urgent need for talent and processes to make this a reality.”
When asked to consider the next three years, a majority (53%) of respondents agreed we will see greater centralisation of agency services. 47%, meanwhile, said the need for specialist agencies will remain strong. In particular, there is a “high level of appetite” towards retail media, influencer, and in-house support as key disciplines where specialists are in demand.
In a recent interview with The Media Leader, Brainlabs global CEO Daniel Gilbert expressed confidence that challenger agencies are well-positioned to take on the major media holding companies because of holdco clients’ public complaints about the service they have been receiving being below expectations.
“Net Promotor Scores (NPS) for the incumbents are pretty low,” said Gilbert. “And I think it’s quite unique to our industry that you have clients like [Proctor & Gamble chief brand officer] Marc Pritchard publicly come out and say, I don’t want to pay you anymore for your inefficient operating model. That’s really unusual in the services industry, because in most industries if someone is unhappy with a service provider, they wouldn’t make that an industry thing, they would just change service providers.”
He added that “the people focused on the highest performance for their clients and creating the best places to work will be the ones that win; not necessarily the ones that have some competitive advantage today.”