New research from global media advisors MediaSense, in partnership with the World Federation of Advertisers (WFA), shows an overwhelming proportion of major multinational brands looking to improve their agency model with just 11% of respondents believing their current agency model fits their future needs, while 24% believe it is unfit for future purpose.
The Future of Media Agency Models report, which is based on a survey of more than 70 multinational companies representing in excess of $50 billion in ad spend, shows that the traditional holding groups will still have their role to play. Thanks to the breadth and depth of their offerings, as well as their ability to integrate all marketing disciplines, established holding companies clearly add value for clients and are the principal model being used by respondents to the survey.
“Clients are looking for a more ‘networked’ model, where global agency capabilities can be leveraged to unlock speed, agility and talent. Yet this new WFA and MediaSense research reveals that the gap between expectation and reality is found to be largest for these very attributes. So, as an industry, we have work to do to come up with the models and approaches that unleash greater effectiveness” said Catherine Lautier, VP, Global Head of Media & Integrated Brand Communication, Danone and People & Partners Co-Brand Champion within WFA’s Media Charter.
The report finds that modern media organisations are calling out for more streamlined offerings, capable of ‘joining the dots’ between an increasingly broad set of marketing touchpoints. This requires investment in data and strategic capabilities, alongside a more diverse talent pool capable of going deep and wide. The future is focused less on individual channel execution and more on agile, integrated consumer experiences.
Ryan Kangisser, Managing Partner at MediaSense, said, “The past three years have been transformative for the advertising industry with brands and agencies on a march to unlock much-needed capability, integration and speed. The blurring of lines between the different marketing disciplines is accelerating this, highlighting the need for agencies to evolve their models from channel to consumer-centric. Although we may not be seeing media and creative coming back together (just yet), this study reveals a clear intention towards integration with an urgent need for talent and processes to make this a reality”.
Research also points to a growing march towards centralisation and more effective servicing models. When asked to consider the next three years:
“To be clear, this appetite towards simplification can be satisfied through a distributed model where the processes, ways of working, incentives and governance are aligned, and where there is the right organisational structure and talent”, said Matt Green, Director of Global Media Services at the WFA.
He added, “The traditional media agency model is evolving. The focus is on a more ‘networked’ model, where global agency capabilities – regardless of where they are based – are being leveraged to unlock speed and agility and improve access to talent”.
The Future of Media Agency Models report also highlights dissatisfaction with traditional compensation models, with 52% of respondents saying there is room for improvement and 21% revealing it is unfit for future purposes. Many argue that commission or fixed time and materials-based models limit flexibility and fluidity when bringing in talent or exploring different servicing models. Accordingly, 74% agree that in the next 3 years, we will see a shift towards output or outcome-based, as an alternative model.
Other key findings from the Future of Media Agency Models report include:
