We’re often asked by clients about our views on the traditional AOR relationship and what the ‘agency of the future’ should look like, and whether AOR models are a thing of the past.
While it’s true AOR agencies have their work cut out to hold on to coveted, multi-disciplinary businesses, while staving off consultancy firms hungry for deeper and more creative business, there’s no unequivocal evidence to suggest AOR relationships are set to disappear.
To be honest, anything we might speculate today as to whether a one-size-fits-all solution points to marketers migrating away from traditional AORs and towards specialty agency solutions would be exactly that: Speculation.
So when we’re asked by marketers what kind of agency relationships might work best, we encourage clients to turn the question around and ask fundamental questions of themselves to work out whether centralized or decentralized models might work best them. And if you’re a marketer mulling that conundrum, here are a few questions worth considering:
Who drives strategy?
If strategy isn’t clear, or there are varying strategic directives – any agency relationship is unlikely to flourish – regardless of whether it’s an AOR or not.
Marketers who still have dedicated digital teams for example, can sometimes find themselves undermined when their internal brand teams believe they should directing digital agency work because they understand the own brands better. Fair point, right?
So who drives strategy for your business now? (Really). Your brand team? Your agency(s)? Executive team? Or a collaborative consensus between teams? How you originate and manage strategy is a pivotal question to determine the kind of agency relationships you should be pursuing.
What’s your process for integration?
Do you have a defined process to integrate all activities? Is there a defined process or playbook? Do you have online tools to help manage communication between teams or proposed tools to help manage multiple agencies?
More to the point, how well integrated are your marketing initiatives working today? How do you want them to improve or evolve?
Even if you don’t have a defined process today, you need a vision for how integration should work in order to be able to coordinate activities between groups or indeed brands.
What are your key priorities?
Try these on for size…. Are your needs primarily strategic to help you define new consumer channels and touchpoints – something your media agency may well be adept at helping you work through, for example? Are your requirements highly technical? Focused on social? Or are your needs more akin to that of a production line – turning out thousands of online ads a year?
Marketers have to define their own specific operational needs – not only for today – but for what lies ahead, to help understand how best to operationalize their needs with an agency partner or partners.
What’s your collaboration model?
Your ability to set and facilitate collaboration expectations is also an important question to answer to help you decide whether an AOR or specialist agency model is the right approach.
Much like your process for integration internally, you have to be able to set expectations around agency collaboration. Some marketers are now appointing ‘lead agencies’ in specialist agency models, to help ensure everyone plays nice in their sandbox.
Do you have the right financial model for your agencies?
If you’re using an AOR agency to fulfill specialist needs – can they be truly media agnostic? (Are you sure?) Do you know their relative profit margins between say a television campaign and building an online advertising campaign with a dedicated micro-site?
Shifting marketing dollars towards specialist initiatives that may increase resources required, lower profit margins within the same financial framework as other brand activities, won’t be realistic or sustainable for some current agency models.
If it makes you feel better, it’s at about this point when many clients say ‘crap, we’ve not thought this through…’. So take comfort, you’re not alone.
How does your internal support system work?
Marketers often leverage multiple agency relationships in pursuit of cost savings or to get round headcount issues that can’t be supported within their own organizations.
Internal support systems that can help identify, support and make the case for internal organizational change, increased or revised headcount all play a part in the decision to stick with an AOR, unbundle into specialized agencies, or specialized functions through internal resources.
Where are your needs heading?
Understanding where you are today is a great start and will, if nothing else, provoke useful discussion among internal stakeholders on what’s right for your business.
As those discussions unfold, marketers also need a perspective on where their digital needs and requirements are heading and how and what digital solutions will be required to support their needs in the next two or three years.
So does this mean the traditional AOR relationship is a thing of the past? Not sure? Let us know if we can help define what kind of marketer you are and what’s best for your business.
Stephan Argent is Founder and Principal at Listenmore Inc offering confidential advisory to marketers looking for truly independent insight and advice they can’t find anywhere else. Read more like this on our blog Marketing Unscrewed / follow me @StephanArgent
Photo: Sergii Gulenok