Branding Agency Opportunities

Goals

Help adjust an agency's focus and adapt new services to clients, by providing examples of innovative brand agencies around the world that have adjusted to changing times via a a change in their business model over the last years or months.

Early Findings

  • Given a world where content consumption is incredibly fragmented across channels, with new ones popping up all the time, it only stands to reason that agencies built to work on those channels are also under pressure to evolve. There are four general agency business models that are becoming increasingly popular: the in-house agency (like that of Marriott and Spotify), the big consulting agency entering the creative space (such as Deloitte), the increasing competitiveness of small boutique agencies (like JohnXHannes, winner of last year's Ad Age Small Agency of the Year) and decentralized agencies (such as Zoopa and to an extent BBDO).
  • Even traditional agencies are changing how they do business. As technology increasingly makes it possible for small shops- and even clients- to compete with traditional agencies, the latter are seeking to deliver more for less. Some are merging, like Burston-Marsteller. Publicis has chosen a truly innovative way with their Power of One strategy, which pulls together agencies and services across the network to creates standalone mini-agencies for clients like Walmart, HP, and USAA.
  • Brigitte Majewski, VP and research director for Forrester, believes that the new model will be an agency that can deliver everything under one roof, because fragmentation creates communication challenges which hurt brands.
  • On the other end of the spectrum, some agencies are finding value in choosing to create a mutually-beneficial relationship with agencies rather than compete with them. One such agency is IBM iX, who promises to help agencies deliver digital reinvention
  • As increasing access to data gets CMOs used to demanding measurable results, rather than being willing to pay based on potential, some agencies are evolving how they are rewarded as well. One change is to shift to a performance-based compensation model, as with startup agency Bullish. 80% of the agency's business is compensated based on brand performance with the rest coming in on fees, equity, and miscellaneous projects. Buzzbar, in the UK, has a different strategy. Clients book time to come in and sit side-by-side with the agency team (similar to Apple's Genius Bar) rather than book projects and have results presented back at given times.
  • As the world becomes more aware of the need to integrate different points of view, especially that of those that have been historically left out, Anomaly stands out for their emphasis on integrating multicultural insights into every project. Anomaly also goes further than most agencies by not just supporting other brands, but launching their own products out of their intellectual property units.

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