Will more brands buy agencies?

27 October 2015
Recently Marketing Week asked my opinion regarding the news that Coty had bought the content agency Beamly, why we thought they had purchased this agency and whether we would see more brands buying agencies going forward.

Recently Marketing Week asked my opinion regarding the news that Coty had bought the content agency Beamly, why we thought they had purchased this agency and whether we would see more brands buying agencies going forward.

Brands buying agencies is an interesting concept but not a new one. Many advertisers are looking at different models and ways of handling their marketing in what is a very complex multi-channel, digital environment, demanding a more real-time way of operating.  Jaguar created a joint venture agency Spark 44 to manage its global comms and Land Rover moved their business into his JV earlier this year, as part of this process Spark 44 bought Land Rover’s Australian ad agency Morris & Co. We know other brands are looking at crowd sourcing creative, bringing more activities in-house so they can work in a more agile, real time way. Unilever have created The Foundry to incubate new talent and innovations. We certainly believe we will see other clients experimenting with different models going forward.  There are no ‘givens’ anymore in this ever evolving marketplace.

Bringing agencies in-house is a quick way to bring in proven expertise, especially in the content creation area. Many brands now believe they are closer to the customer than their external agencies, many manage social in house so receive instant feedback, insights and direction and with a social content agency in house Coty are now in a position to deliver insight based content and direct relationships with the consumer/customer.    

All ISBA’s visioning research amongst brand owners over the last year indicates an unrest with the current agency status quo, across all platforms. Many brands have conversations with ISBA about bringing agencies in-house. Brands say their agencies have been too slow to respond to the fast pace, complex digital environment, where lead times are substantially shorter and greater agility required. Brand owners know they need to be more agile, feel they are closer themselves to consumer insight, need to work in a more editorial fashion and desire greater control of the process. Many feel their current agencies are behind the curve and struggling in the main with legacy structures. Perhaps the knee jerk position is DIY!

The restructuring of how brands organise their communications will be a concern to the agency community in the long run. Agencies have been aware of this client unrest for a number years now, brands are fed up with complex agency structures, long/traditional lead times and processes, and crave simplicity and speed in this fast pace environment.  We are however starting to see some interesting agency repositioning’s, some green shoots of new structures.  For example TBWA have recreated their Disruption model for a new connected world, using the experience of working with some of newer tech companies like Airbnb, Apple, Google, all require very different ways of working from a trad ad agency, more agility, no silos, more innovative, more real time.  Leo Burnett just last week announced a smashing down of the walls and P&L’s of  their digital and activation agencies so they have one integrated more agile offering. Havas have brought their agency offerings across the group together into the Havas Village concept.  Smart digital agencies like Possible and RGA, who are already digi savvy and highly agile, are offering broader comms services.

Things are changing in the agency world and will continue to evolve. We really believe that now there is no such thing as a static model, both clients and agencies will continue to evolve their structures and ways of operating to maintain relevance a highly volatile, fast pace tech led marketing world. 

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