James Thompson
Apr 27, 2015

Clients take more hands-on approach

It's not easy being an agency, especially when clients are taking on an increasing amount of the work they used to pay agencies to do, writes James Thompson.

James Thompson
James Thompson

Who’d work in an agency these days? Margins forever tightening, competition coming at you from all and unpredictable angles, and the proliferation of media, devices and techniques all seeming to be in conflict with what nearly every client seems to want—cut-through at scale.

Even worse, new competition is coming from the place you’d least expect it: the client. For all their faults, clients used to stick to their own side of the fence and let the experts get on with it.

That model is now at risk. Accessible technology has sped up the trend towards specialisation, so clients are employing more agencies, usually with smaller budgets. Some agency conglomerates, which previously sold off their specialist agencies, are feeling a bit old hat and are starting to offer ‘one-stop shop’ again.

Clients are also faced with increasing pressure on ROI and limited tolerance for risk. Imperative to cutting through is having a big idea which works across all channels, venues and disciplines, while keeping a brand’s look and tone consistent. This forces the client team to be hands-on across all the agencies. As advertising is no longer necessarily the starting point for their idea platforms, clients are also noticing it’s often their own people who come up with the ideas in the first place. Luxury brands have long had their own creative directors and this idea is increasingly becoming part of marketing teams’ day jobs.

The transactional nature of the relationship is undermining agencies’ ability to be much more than creative factories. The only way out is to get back to being clients’ key strategic advisors, helping them navigate and shape their world. There may be little immediate payback—but otherwise there is slim chance of being at the lucrative heart of the action when it matters.

James Thompson is global managing director of Diageo Reserve (Diageo’s luxury portfolio). Follow or Tweet him @JamesThompson1.

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