The Agency of Record is Dead

For a long time Ad agen­cies were the thing. An essen­tial part of our com­pa­nies’ lives. Forces of cre­ativ­i­ty and busi­ness acu­men that helped us scale the lad­der of success. 

A brand would be so proud of its Agency of Record that it was a major PR event to announce a new long-term retain­er. How­ev­er, the death of AORs has been shout­ed from the rooftops of Forbes, AdAge and every major adver­tis­ing and mar­ket­ing pub­li­ca­tion for the past ten years:

The ​“agency of record” con­cept is just about dead, and so are the retain­ers that fund­ed them.

Michael Farmer, AdAge, 2015

Like most death rumors, it has been great­ly exaggerated.

There are enough argu­ments for a change of par­a­digm, though. 

Big, expen­sive agen­cies lost dom­i­nance because:

• Most of their work became com­modi­tized over time.
• They end­ed up hir­ing small­er agen­cies for siloed deep expertise.
• Media means much more than it used to do and there’s so much to learn it became inapprehensible.
• Sales down­turn led to fir­ing tal­ent, which, in turn, led to the loss of advanced exper­tise, par­tic­u­lar­ly on tac­ti­cal deliv­ery of tech­nol­o­gy (adver­tis­ing or martech).
• With remote work being main­stream, tal­ent is no longer tied to the local, region­al or even nation­al reach of the Big Shot Agency grav­i­ta­tion­al force.
• Small mar­ket­ing teams deliv­ered sim­i­lar cre­ative val­ue at a frac­tion of the cost.
• Prices are nuts and returns are scarce.

So it kind of is dead, isn’t it?

Like with most things, the answer is it depends. Most big com­pa­nies still find more reas­sur­ance on sim­i­lar­ly large agency part­ners. There are notable excep­tions, like Lib­er­ty Mutu­al appoint­ing a 15-peo­ple team as their exclu­sive Cre­ative Partner.

For mid-mar­ket, how­ev­er, old school AORs make no sense any­more. The future takes shape as a com­plete­ly dif­fer­ent struc­ture. One that’s more mod­ern, com­pet­i­tive, nim­ble and daring.

Long live the In-House creatives.

The times they have a‑changed. Brands no longer have to pay a huge team to pile up hours against your account to thrive. Smarts can go a long way, par­tic­u­lar­ly for com­pa­nies grow­ing into the mid-market. 

This is very hard to refute: 

1. There are oh-so-many chan­nels and touch­points in your cus­tomer jour­neys that it’s very hard — and ter­ri­bly expen­sive — to find one sin­gle team with enough expertise. 
2. High­ly per­for­mant and cre­ative vision­ar­ies pre­fer to work in places where they feel they can make a dif­fer­ence, instead of becom­ing just anoth­er cog in a mas­sive machinery. 
3. A team of three skilled peo­ple that make good deci­sions and tru­ly under­stand the sto­ry they have to tell is enough to insti­tute an in-house team. That’s why these are on the rise.
4. Small and mighty in-house teams need part­ner agen­cies to help them sort real­i­ty, par­tic­u­lar­ly from a tech­ni­cal perspective.

The new agency role and what it means for your company

This is hap­pen­ing. Today:

• Arti­fi­cial intel­li­gence is con­sis­tent­ly mediocre at most things, but it’s extra­or­di­nar­i­ly suc­cess­ful at being mediocre. It will replace every sub­par agency in the world. There’s no more room for teams doing gener­ic, cheap, cook­ie cut­ter work.
• Mid to big teams doing excel­lent work across many dis­ci­plines will be slow­ly acquired and con­sol­i­dat­ed into larg­er agen­cies until these dom­i­nate again.
• Those of us with a ​“T” shaped skill set – enough gen­er­al­ist knowl­edge to be use­ful, plus a spe­cif­ic exper­tise that runs deep – have a shot at stay­ing inde­pen­dent and relevant.

This will breed a new gen­er­a­tion of ​“agen­cies of”:

• Agen­cies of Vis­i­bil­i­ty. The ones to whom you del­e­gate paid adver­tis­ing, SEO, Inbound and oth­er per­for­mance mar­ket­ing work.
• Agen­cies of Media.Chances are you’ll have in-house pro­duc­tion too, but these are the ones that step up when you need to scale pro­duc­tion qual­i­ty and reach, and act as a more tra­di­tion­al adver­tis­ing agency, includ­ing media buying.
• Agen­cies of Influ­ence.In-house influ­encers are a thing, and the ide­al sce­nario if your indus­try and brand allows it. These agency part­ners are the ones in charge of mak­ing noise, cre­at­ing hype, set­ting trends and turn­ing heads.
• Agen­cies of Ecosys­tems. Agen­cies like ours that deal with the unbear­able quan­ti­ty of avail­able tac­ti­cal choic­es in tech­nol­o­gy, help­ing you choose your tools and mak­ing all the mov­ing parts work. This of course includes web­site, ecom­merce, and martech.

And the list can go on. An era of small­er egos and bet­ter team­work. It’s a Hol­ly­wood mod­el on steroids where you – through your in-house team – call the shots and keep the strat­e­gy on the right lane.

1202 (twelve oh two)

The unfor­get­table after­noon of July 20, 1969, as Apol­lo 11 began its descent into the Sea of Tran­quil­i­ty, all hopes were inter­rupt­ed by an unex­pect­ed mis­sion-threat­en­ing event. A crit­i­cal 1202 Error Code popped out repeat­ed­ly on the flight computer. 

The cause: Exec­u­tive Over­flow. The com­put­er had more tasks than it was able to process. 

I tell my wife I’m on ​“1202 mode” when my back­log is so long that I can no longer think straight, and I either freeze and pro­cras­ti­nate, make dumb deci­sions, or both. When there’s so much to do, learn, decide, exam­ine or approve that I have no idea where to start. When every­thing becomes a pri­or­i­ty simultaneously.

Back to the sto­ry before I digress. NASA’s leg­endary smart Mis­sion Con­trol team told Aldrin and Arm­strong to sim­ply ignore the alarm. No pan­ic. Just focus on what they could con­trol and do best. Their team back on Earth would han­dle the rest. As you very well know, the sto­ry had a hap­py end­ing. The two astro­nauts used their irre­place­able skills, guts and instincts, and made history.

Risks and rad­i­cal deci­sions, even of this mag­ni­tude, are eas­i­er to embrace when you’re no longer inter­rupt­ed by annoy­ing tech issues.

The corny moral is that if you want your brand to make a last­ing mark – your foot­prints on the moon – you can use an agency to solve the day-to-day stuff so your irre­place­able, tal­ent­ed team can focus all of their strengths and efforts into mak­ing a superb landing. 

In short:

• Empow­er your team to oper­ate as an in-house agency. Chances are they’re doing it already.
• Free your com­pa­ny from long term con­tracts and old fash­ioned agency dominance.
• Del­e­gate the tac­ti­cal stuff (to some­one who gets it, and prefer­ably, cares)
• Choose to con­trol what’s strategic.

Soon enough you’ll be walk­ing on the moon.