Trends & Innovation

The Future of Agencies: Systems and Empathy

By Neil Perkin,
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This report explores the shifting agency landscape and the dynamics that are shaping agency capability, operating and client engagement models as well as remuneration and approaches to talent.

It also examines the key opportunities for agencies in a rapidly shifting environment.

Key findings

  • Client focus on customer experience (CX) has created opportunities for agencies willing to deepen their engagement with clients. These engagements range in scope from building new platforms and capabilities, service design and delivery, continuous improvement, operational efficiency, customer acquisition, activation and advocacy.
  • The strategic focus on wider CX has led to a shift towards co-creation between brands and agencies. This means that agencies are working with clients to help them find problems to solve and opportunities to exploit. This differs from the traditional model of agencies simply responding to client briefs. Emphasising the reach of CX, agencies have the opportunity to expand their offering to work with multiple departments beyond the marketing function including digital, innovation, service design, IT, finance and HR teams.
  • This requires a wider set of agency capabilities. For example, joining data with technology to create seamless front-end customer interaction. The challenge for agencies is in developing these competencies and packaging their offerings to clients in ways that make sense so as to create a unique value proposition. 
  • Agency value propositions are evolving. Traditional consulting firms are developing and acquiring digital, creative and design expertise. Meanwhile traditional agency holding companies are developing their consulting, data and technology competencies. 
  • The complexity of martech (and likely vendor convergence) means there is an opportunity for agencies to act as ‘sense-makers’ for clients and act as trusted partners in making sense of the strategic applications of new waves of technology including artificial intelligence (AI), virtual reality (VR) and the Internet of Things (IoT).
  • Advertisers are demanding greater transparency in recognition of the increasingly complex ad technology landscape. A recent World Federation of Advertisers report showed that almost 90% of advertisers are reviewing and resetting contracts, relationships and models with agency trading desks to improve control.
  • Organisational purpose and culture are becoming as important as location and remuneration in the search to recruit and retain talent. Structures are changing to foster collaborative, agile working which can attract creative and technical talent to deliver exceptional value to clients.
  • With the expansion of agency capabilities, new client-agency remuneration models are becoming prevalent. An increasing focus on project remunerated work is resulting in the decline of the strategic retainer model. Some agencies are using a blended charging approach. This means blending rates of resources of different levels and skills to create a ‘pooled’ rate. These rates can be applied to projects based on how the agency is adding value.

Methodology

The research for this report comprised a comprehensive series of in-depth interviews with a wide range of:

  • Senior agency practitioners
  • Marketing practitioners
  • Innovation specialists
  • Consultancy leaders
  • Futurists

This was supported by extensive review of the current literature examining the future of creative and digital marketing sectors including advertising, marketing, content creation and the strategic focus on customer experience.

Contributing Authors


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Neil Perkin

More reports from Neil Perkin

Neil Perkin is a renowned blogger, writer and the founder of Only Dead Fish, a digital and media consultancy that specialises in applying strategic understanding of social and emerging media technologies to help businesses innovate and optimise their effectiveness within the new, networked communications environment.

Neil is a consultant with Econsultancy, a regular keynote speaker across Europe on content strategy, emerging media, digital marketing innovation and social technologies, and writes regularly for BrandRepublic, FutureLab, Marketing Week and The Marketing Society among others. He has been named by BIMA as one of the most influential people in the UK digital sector for two years in a row.

Neil curates the quarterly series of Firestarters thought leadership events on behalf of Google, and has worked with market-leading global businesses including Warner Bros, HBOS, YouTube, Marks & Spencer, Leo Burnett and Disney, and is an associate of The Futures Agency, a collaboration of some of the world’s leading media thinkers and futurists.

He has over 20 years media owner experience and was latterly the Director of Marketing, Strategy and Digital for IPC Media, the largest consumer publisher in the UK and publisher of multimedia brands including Wallpaper, Marie Claire and the NME. In this capacity he ran award-winning strategy, planning and consumer insight functions and was at the centre of defining and implementing the digital strategy for one of the largest media owners in the UK.

Table of contents

1. Executive Summary

  • Methodology

2. Context

3. The Key Dynamic Shaping the Future: Systems and Empathy

4. Shifting Operating Models and Client Engagement

5. Shifting Agency Propositions

6. The Ongoing Impact of Technology

7. The Talent and Culture Challenge

8. A Model for the Future: Capability Development

Downloads

  • Pdf SAMPLE: The Future of Agencies: Systems and Empathy (619 KB PDF)
  • Pdf Disabled The Future of Agencies: Systems and Empathy (1.28 MB PDF)
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