Why are big agencies not as relevant as they used to be?

Advertising pioneers such as J. Walter Thompson and Raymond Rubicam built creative empires that dominated the industry for decades. This time is coming to an end.

Insufficient branding, restrictions imposed by the holding company model and customer-specific units led to the decline of the once-powerful agency brands. Holding companies have responded by consolidating distressed creative agencies with other offers, a trend that shows no signs of slowing down.

"It seems to me that the devaluation of agency brands and creativity are moving at the same pace" The Ad Contrarian blogger and author of BadMen, Bob Hoffman, said: "We make the # The opposite of what we ask our customers. "

Partner of Doublebit Narrative, Caitlin Barrett, brand language strategist and veteran of Interbrand, attributes branding issues to agencies that do not invest enough time or resources in their identity and their positioning. She added that employees working more than 60 hours a week are responsible for developing their brand but do not have the necessary conditions to succeed.

Traditional agencies are struggling to keep up with the evolution of the industry, limited by the relationships with the holding companies. invest in new technical capabilities or look for smaller customers that can result in short-term financial losses, but ultimately generate value.

"In ten years, I think there will be many fewer agency brands."

Analyst Brian Wieser

According to Brian Wieser, a pivotal research analyst on the subject, "traditional creative agencies have under-invested" in key capabilities, presumably because holding companies have withheld resources in the interest of investing centrally . "I think society is dying," he added. "

Customers frustrated with the approaches of their agencies and looking for alternative solutions continue to look for solutions to change the brand's resources of the agency." Or quit existing relationships to work with different types of partners.

A source who was aware of a customer conversation for a major brand of CPG products by transferring work to new partners, stating: "Risk taking is rarely rewarded in the business environment. It is therefore easy to stick to the conservative gamble. "

Over time, however, independent agencies and other actors continue to give up, as shown by the recent decision of Ford to award its autumn campaign to Wieden + Kennedy and to appoint W + K as a new partner for innovation The question is whether traditional agencies can adapt before customers work

"Larger agencies are trying to catch up and offer more agile and more affordable products," said Barrett. "These are very large vessels that are changing course and it takes them a lot more of time they would not have thought. "

Barrett said the perpetual revolving door of the industry was contributing to a lack of differentiation, recalls a report with agencies. from doorfe companies A few rivals in which a presentation deck contained images of "some of the same people who were in the other presentation".

Holding companies have responded to the demand for a more agile approach with structural changes, including dedicated units and consolidation.

Forrester Senior Analyst Jay Pattisall explained that the fact that agencies were not adapting quickly or dramatically enough to meet the changing needs of clients led to structural changes, such as dedicated units to customers. The brands of holding companies have become "more relevant today than they have ever been," he said, stating that "the marketing managers will choose first and foremost the holding company, then the culture of the agency that best suits their needs. "

Holding companies are attempting to increase the value of distressed creative agencies by associating them with other offers, as WPP had done with VMLY & R. This n & # 39; It's not because these agencies are "unimportant individually," said Pattisall, but because they "are stronger together," calling for the subsequent devaluation of each agency's mark "an unintended consequence of necessity." to consolidate and strengthen the capacity of the agency ".

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