Why Some Agencies Are Dying

I have experienced a crazy trend in the past six months, the client movement to have multiple and diverse agencies working together. Tenacity5 has already experienced five partnering deals with other agencies this year and it’s only July. I may have partnered five times total in the past five years preceding 2015.

Sharing the revenue pie is not something most agencies do well. However, some agencies are suffering as a result. Others are dying. They cannot adapt to the new collaborative approach clients are demanding.

My friend Patrick Ashamalla sent me this year’s SODA Report (see the below chart), which showed that highly specialized players are taking a larger priority. Pair this with the the whole “agency of record is dying” trend and you have a movement.

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CMOs don’t want to hire a generalist firm to execute their entire scope of work. It’s not reasonable to expect a one size fits all agency will do a decent job on all of activities in a significant scope of work. CMOs don’t believe agencies that say they can do it all. In fact, they find such claims suspect.

The Collaboration Economy

Collaborate Well
Image Courtesy of Wild Blue Yonder.

Corroborating this trend was Gary Duke’s excellent Wild Blue Yonder research presented to DC Ad Club last week. Gary dubbed this the Polygamous Client trend, and noted it is spreading like wildfire across the Fortune 1000.

Those agencies who want to remain competitive need to become more agile, collaborative and highly specialized. Those who are not evolving and insist on the mass integrated marcomm agency role are shrinking.

“Agencies must take on a collaborative approach with other agencies because they simply don’t have any other choice today,” said Gary Duke via email. “It’s not only what clients expect — it’s what they demand of their agency partners. If it’s not in your DNA to play well with others in the sandbox, then you just better pick up your toys and go home.”

Of the agency efforts I have participated on this year, some have been super fluid and one in particular was a disaster. And in that case the primary partner clearly wanted all pieces of the biz, was not collaborative or transparent, and ignored other agency/partner recommendations in spite of a clear lack of competency in some project areas. No surprise: The relationship and overall initiative blew up.

The Nimble Agency of Now

Collaboration Scores
Image Courtesy of Wild Blue Yonder.

Jeremiah Owyang likes to talk about Crowd Companies, businesses that share resources on the Internet. Well, the agency business has not quite devolved to that point, though you could argue that companies like crowdSPRING have eroded the bottom side of the market.

CMOs want access to agencies or agency teams with wide spread resources, usually freelancers and other partners. That means an agency must work well with others, share scope, and bring on third party resources as needed.

In essence, they want more nimble partners who have access to diverse capabilities. They want best of breed in every marketing function. Integration is still needed, but instead of it being under one roof, marketing organizations want agencies that can assemble or play with assembled teams that possess superior niche skill sets.

These are shared resources in many ways. That means integration is a result of project management instead of scope or overall billing. Project management across diverse creative assets becomes a necessary skill for the strategy lead. Duke hammered this point home over and over again in his presentation.

Here are some steps I am taking as a result of this trend:

  • Building a diverse agency partner network to refer and garner referrals
  • Doubling down on focus and expertise in digital content and platform creation
  • Avoiding services spread into areas that we are not good at, such as SEO, media buying, branding, media relations, etc.
  • Building stronger project management skillsets
  • Taking an adaptive attitude towards strategy, specifically be willing to drive or psimply fulfill a role as needed.

Are you seeing a similar trend with your business?

The Quality Boom

Strong professional writers, photographers and videographers should be thrilled. Content and social network noise increasingly impact online success, making quality an increasingly necessary component to succeed. That means experienced professional producers will be in demand.

Consider the rise of new markets for quality stories. Cont3nt.com has built a place for content creators to submit their stories. Note the word stories. While photos are the baseline, journalists are looking for the comprehensive package of photo/video AND story.

The demand for better photos is a direct result of mobile snapshots (and the smartphones that people view them on), but the zeitgeist is creating a market for higher quality images. Anyone (including Chicago Sun-Times journalists) can shoot a photo on an iPhone, but most smartphone photos look flat at best.

The same could be said for video. Vine may be the home of six second shorts shot on your phone, but high quality pieces win the day.

One complaint I hear frequently when talking to my more senior colleagues is that many young communications professionals display poor writing skills. Finding quality writers to succeed in the content marketing era is difficult.

The demand for quality writing is one of the primary reasons Erin Feldman became my first hire at Tenacity5. I learned to value quality writing from team members at Livingston Communications and Zoetica. People who work well on a timely basis are more important than yet another account executive.

I believe that demand for quality content will make hiring writers and designers a higher priority than account staff for agencies and consultancies. Regardless of story type — video, photo, written or a combination — we will live and die by quality.

Hybrid Weavers

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Notice the focus on complete stories at Cont3nt.com. I don’t think companies, journalists or content creators are looking for brilliant work in a singular tactic anymore.

Sure you can create the epic photo that is shared across the world, but invariably a story accompanies the image. You can write the most beautiful prose and publish it, but if there are no visuals or video the story will have a limited audience.

Even video requires a story, a screenplay. That usually requires the videographer to write a basic story before shooting.

Content publishers — media companies and corporations alike — realize the need to produce complete stories with multiple types of media assets. Agencies and consultants that can’t provide comprehensive storytelling will need to build networks and teams of diverse producers to fulfill client needs. The same can be said for media companies.

Hybrid content needs drove me to sign up for not one, but three professional photography training classes via National Geographic and Nikon. While most folks are nice to me and compliment my photography, I need the basic fundamentals to transcend from the periodic brilliant shot to consistantly decent photography. I can use these photos in my own work (as I frequently do with blog posts)

It’s all part of providing comprehensive content. Online communities prefer quality hybrid content.

How are you serving this need?

Photos taken last night in Alexandria, VA.

How CMOs Integrate Marketing Agencies and Consultants

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Image by cleonleclerc

Consider how companies integrate agencies and consultants into the modern, multichannel marketing environment.

Contrary to today’s blogosphere conversation, CMOs, other C-level business executives, and their marketing lieutenants still drive marketing strategy in organizations. Agencies and consultants vary in role from strategic partner to tactical provisioning.

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Why “The Pitch” Will Perpetuate Bad Practices

Perhaps you have seen the preview episode of The Pitch, AMC’s newest show about the advertising industry, which debuts on April 30. In this first episode WDCW competes against McKinney Advertising for a Subway breakfast ad campaign. While dramatic and entertaining, the episode also perpetuates several bad practices that plague the entire marketing sector.

This “reality” TV approach focuses on the tension of competitive pitching for major accounts. It assumes that winning depends on the creative that resonates most with the decision committee. In this case a Mac Lethal video-inspired campaign from McKinney out duels WDCW’s zAMbie campaign for Subway’s breakfast line.

But nowhere in the episode do we see serious conversations about the following:
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The PR Industry Can’t Help Itself

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Of all the professional skill groups that can be included in the marketing toolkit, public relations is the most ridiculous (PR is also used for public affairs and other non-marketing activities). Filled with backwards unethical and untrained professionals that consistently spam people and promote attention metrics instead of actual outcomes, the PR profession can’t help its poor image.
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The El Show Episode 26: Will Big Agencies Go the Way of the Do-Do Bird?

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Episode 26 of the El Show revolved around Forrester’s call-out of big agencies. From the post:

“Agencies continually reinvent themselves to serve their clients — they have to quickly adapt to changes in marketing strategy, media, technology, and society. And with the rise of social media and digital proliferation, we are entering an Adaptive Marketing era. In this era, mass media is no longer the foundation of marketing communication, forcing yet another change in the expectations of what marketing agencies can and should deliver. Marketers should assess their partners using the three I’s — ideas, interaction, and intelligence — to select the right partners. Marketers who change their thinking will lay the groundwork for partners that are more agile, can build long-term relationships with active customers and communities, and can use data to drive real-time decisions.”

We proceeded to analyze and discuss. Here’s a breakdown of Episode 26:

  • Market dynamics – Why has this occurred?
  • Agencies need to focus on core competencies – That’s their brand value.
  • How does this impact the client? Is more management required?
  • Budding marketing pros – Do you go the big agency route?
  • Boutiques – What are the downsides of small firms?
  • John C. Havens from Porter Novelli called in and talked about big agencies
  • Will big agencies go the way of the newspapers? Is more consolidation coming?

Download or listen to the El Show Episode 26 today! Also available on iTunes!