The 5 Questions Agencies are being Challenged with

Against this backdrop, if you are thinking about the reinvention of your agency, here are some things you may want to ask yourself:

1. What Business Do You Want to Be In?

Do you want to provide solutions to marketers’ big, challenging marketing problems?

Or do want to provide marketers with communications tools (ads, TV spots, brochures, PR, etc)? There is a significant difference.

The former has very high value and is intellectually driven. The latter has the characteristics of a commodity, and as such is price sensitive. Make no mistake; it is very difficult being successful at both simultaneously.

Yet each by itself can be a viable path. A conscious decision of which is
right for your agency may well be in order.

2. Are You Consumer Centric?

This is a tough one. All agencies are constantly pushed toward client-centricity. Simply because the clients pay the bills, yet consumer centricity and client centricity should not be confused. They are pretty different.

Now that consumers have taken complete charge of what commercial messages they want and when and how they want to receive them, advertising is a changed game.

A true understanding and deep empathy with the consumer is the key to success. Without an unrelenting reaffirmation of this truism, client think can creep into an agency’s psyche. Blinding it to marketing solution
opportunities. And the resultant changed consumer behaviour.

3. Is Your Agency Capable of Reinvention?

Reinvention usually requires the discarding of baggage. And many agencies have lots of baggage that has accumulated over the years. A few key baggage tests require looking at how much of your gross income comes from making ads, spots, and other stuff. And how many of your staff are primarily
engaged in this activity?

If much of your agency’s time and talent is focused on making stuff, you may well be starting a slide down the commodity provider’s slippery slope.

Becoming an agency well-paid for solving complex marketing problems for its clients may require fewer folks with radically different skills. A transition that can be painful.

4. How Will You Get Paid?

The preceding question leads right into this one. Much agency compensation today comes from hourly charges for providing ads, TV spots, etc. Stuff that is primarily priced by the cost of labour needed to make it.

Solutions to big marketing problems are different. They are ultimately valued by the incremental economic benefit they bring to the marketer. A value that has little, if any, connection to its cost. And a value that may
provide very long-term benefits.

Thus, the agency should consider some form of continuing compensation that recognizes and is connected to, that continuing value. To do otherwise is to give away the most important thing to secure price-sensitive commodity work. Not a brilliant business deal.

5. What is Your Agency’s Transition Plan?

Ok, let’s say you want to reinvent. As the old song goes, “Wishin’, and Hopin’, and Thinkin’, and Prayin,’” will not get you there. It takes a solid action plan. One that enjoys the support of your people. One that
relentlessly moves ahead despite all the obstacles that come up.

Reinvention is a slow and difficult process. It will not come easily. Or overnight. It will take trial and error. It will suffer setbacks. People will lose resolve. But you, and your other leaders, can’t.

A practical plan executed with steadfast determination will be essential.

The Quick and the Dead

Like the Biblical judgment, marketers are coming to make choices. Choices that will determine your agency’s very future. As well as the future of every other agency and even the advertising agency industry.

Decisions that you make today for your agency can shape what that judgment will be.