New ad agency models–Making the Leap


In a recent blog article – Tim Williams from the Ignition Consulting Group asked “How long can agencies survive on the old agency model platform before we die or maybe jump?” We know that agencies in the last 10 years have all developed new forms of setting themselves up to deal with the issues that their clients face. The old agency model that emerged from the Industrial Revolution was all about creating scale. The Digital Revolution has decimated scale adding layers of complexity to our business model. Agencies as a group, are finding it hard to keep up. Forbes recently printed an article where it wrote that agencies are struggling to change their business model. “Clients do not see traditional agencies adjusting well in an era of rapid technological changes.”

Some commentators firmly believe that there are two models of agencies developing at present in what they call the New Agency OS (Operating System).  1) Outcome Agencies – focussed on effectiveness, delivering ideas, innovation and intelligence to grow client profit over time. 2) Output Agencies – the ones that will continue to generate big ideas and create fame for Clients but will also develop new revenue streams for those ideas, thereby beating their addiction to short term Client Cash.

But are these two the only game in town? Forrester recently wrote that “No Agency Type is perfect for the New Era.” This can be seen in agencies that are placing less emphasis on the concept of “Advertising” but all about being a “Communications Agency”… think of media agencies developing creative services. Production Companies now pitching themselves as creative content developers and consulting firms like Accenture acquiring agencies and selling their connected thinking. PR agencies now selling themselves as creators of earned media content.

One thing for sure – the agency structure and services of the future may not have been created yet but clients are now seeking experts in paid, earned and owned media on a daily basis – will they really care what discipline provide them – merely the fact that their communications experts know that they have a client with a business issue that needs to be solved. Communication Experts need to focus on the business strategy and to concentrate on what they do best to deliver on the business strategy. Saying that an agency does everything isn’t a strategy. This is what we are doing with our own Clients – Sales over night – Brand over time.

Peter Mahon
Client Service Director


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