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There is a crisis brewing within strategy in media agencies

There is a crisis brewing within strategy in media agencies

There are three issues strategy faces: structure and remuneration, perception and diversity

There is a crisis brewing within strategy in media agencies, and one that must be addressed now if we are to secure the long-term growth and value of what we do.

At this point in time, there’s a dichotomy emerging, and one that might give us a false sense of security.

In the day-to-day, strategy functions within media agencies are in good health, and in high demand from clients. Indeed, the Annual Gartner CMO survey from last year showed that brand strategy (which we contribute to) was their most vital strategic capability.

A month later WARC published its Future of Strategy report which illustrated an increased need and appreciation of strategists (particularly in light of the pandemic).

All good? No. Far from it.

At the same time, alarm bells were sounding. Decreases in headcounts, marketing spends, and an increased short-term view of the world were creating many challenges. Fast forward a year, and Gartner have released their 2021 CMO survey and the alarm bells are getting louder.

The latest from Gartner showed CMOs under ever increasingly difficult pressure and revealed a significant shift in the services that they are starting to in-house. Moving away from low-value, high-volume services into brand strategy, innovation and technology and marketing strategy development.

This has added significantly added to concerns that I have had for some time now.

Team structures need to change

The issue is generally more organisational and commercial than it is about capability (any decent strategist learns quickly and can adapt). Strategy must change, and quickly, to respond to the increasingly diverse industry forces influencing what we do.

There are broadly three main issues strategy faces: structure and remuneration, perception and diversity.

At its heart the problem is a legacy one. Strategists in media agencies are usually baked into a team service structure, with a percentage of their time allocated to a client’s business. There are benefits to this, such as guaranteed income and talent that becomes close to their clients.

But – and there is a big but – this model also causes restrictions, and ones that the pandemic has both highlighted and accelerated.

This model lacks the flexibility for us to be able to orienteer ourselves around our clients’ problems and match the right talent to the task at hand.

We give away too much

Given the increasing pressures CMOs are under (and concerns about what services they could in-house in the future) shifting the remuneration of strategy away from time and talent to that of outcomes feels like a critical move that we need to take.

Given that many media agencies consider strategy and data product as the engines of their growth, we have to change how strategy is both perceived and paid for.

Indeed, legacy perceptions don’t help. As a result of the current structure in which strategic services and output are delivered, agencies give away an awful lot of intellectual property that consultants would charge significantly for.

If we steer the conversation around how strategy can help deliver meaningful outcomes to our client’s business, then we will begin to shift perceptions of the value we create.

On a slightly different note, while I said the issue was less a capability one; there is a lack of diversity that will ultimately impact capability. The route to strategy is largely consistent, with many having been in planning or client service roles.

If we are lucky some in our teams have worked in content, digital or social agencies. What is often universally the case, is that they have worked for a number of years in other roles before becoming a strategist. Not only does this disconnect many of us from emerging youth culture, but it also means we do not have a diversity and variety of skillsets increasingly needed for today’s strategic challenges.

At a time when AI and automation will begin to inform investment choices more and more, the opportunity for strategy has never been greater. Opportunities need to be seized, however, and we need to think about how we make ourselves future fit for this landscape.

So, what to do?

I don’t profess to have all the answers, and making the necessary changes will take time (which is all the more reason to start now).

But the solution lies in becoming more flexible in how we structure and monetise strategy.

There are broadly three things we can start doing:

  • Identifying clients who are open to exploring new remuneration models and supplying strategic services more closely aligned to outcomes. There will always be clients for whom the FTE model is the right solution, but both models can coexist
  • Talent match-making the right individuals to the right business and communication tasks, allowing for more flexible use of talent across strategy teams
  • Greater fluidity within strategy teams and increasing use of freelance and outsourced talent to collaborate on solving clients’ problems. This is a huge opportunity, given the radical changes to working patterns we are seeing emerge from the pandemic. It would also certainly lead to a more diverse and creative process, one that evolves in relation to the broader forces around us

Strategy functions in media agencies can absolutely be drivers of growth, but reinvention is critical.

We need to look to evolve how we structure ourselves and work with clients to deliver the greatest value to both their businesses and our own agencies. It is and will continue to be an ongoing process to ensure we are fit for purpose.

Eva Grimmett is Chief Strategy Officer at Havas Media Group

BrianJacobs, Founder, BJ&A Ltd, on 06 Sep 2021
“This is all good stuff, but applies to every function within media agencies.
'Explore new remuneration models'. Indeed, but that is something agencies should have been doing as a matter of course for years.
'Talent match people to business and communications tasks'. Isn't that what agencies spend a huge amount of their time doing anyway?
'More freelance and outsourced talent'. This is something agencies do a great deal in new business. They should I agree do a lot more of it in the day-to-day. Collaborating, buddying-up, call it what you will, it is necessary as the range of needs and tasks expands, and as agencies come to terms with the fact that the days when they made a huge merit out of being able to do anything and everything are long past.
Many of the networks have a history of making money in a less-than-transparent manner. As the money flowed, so the focus remained on buying and negotiation as opposed to planning and strategy. I guess you reap what you sow.
They unfortunately brought this problem on themselves and they're late, possibly too late in doing what they can to solve it.

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