Agencies ‘falling short’ on agility, AI, speed and diversity

diversityThe vast majority of multinational brands are looking to improve their agency model, with just few believing their current model fits their future needs and a quarter believe it is unfit for future purpose, while even more see major gaps in AI and automation, speed and agility, and diversity.

That is the damning conclusion of a new study from the World Federation of Advertisers (WFA) and global media advisors MediaSense, based on a survey of more than 70 multinational companies representing in excess of $50bn in adspend.

Even so, the Future of Media Agency Models report does reveal 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, the likes of WPP, Omnicom, IPG , Havas and Publicis clearly add value for clients and are the principal model being used by respondents to the survey.

But a new breed of agile, specialist and tech-focused agencies can also add measurable value to a more centralised media model, the study finds, with growth among these archetypes is building while the attitude of client-side global media leads is evolving.

Overall, nearly half (45%) of all respondents said they are looking for more flexibility, specifically in the way they are serviced, while more than a third (37%) are looking for simplification through fewer and better integrated partners.

Nearly all (97%) rate access to talent a key priority for the future, alongside 92% for integration, and 92% for greater speed. And, while media and creative requirements remain distinct, one in four of those surveyed plan to consolidate media, creative, data and technology.

Danone vice-president and global head of media and integrated brand communication Catherine Lautier, who is also People & Partners co-brand champion within WFA’s Media Charter is in little doubt what the future holds.

She said: “Clients are looking for a more ‘networked’ model, where global agency capabilities can be leveraged to unlock speed, agility and talent. Yet this 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.”

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 but more agile, integrated consumer experiences.

MediaSense managing partner Ryan Kangisser 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, more than half (53%) agreed we will see greater centralisation of agency services and two-thirds (66%) agreed we will see greater near and offshoring of agency services to unlock efficiencies.

Meanwhile, nearly half (47%) agreed the need for specialist agencies will remain strong, with the research highlighting a high level of appetite towards retail media, influencer and in-house support as key disciplines where specialists can thrive.

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 purpose.

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 three years we will see a shift towards output or outcome based, as an alternative model.

Other key findings include the fact that the age of AI and automation can help agencies to optimise their workforce through the reduction of manual, repeatable tasks. While the vast majority of respondents (86%) rated automation as an important step to modernisation, satisfaction with current agency capabilities is low, with a gap of 66% points in this area.

In addition, 92% of respondents believe that speed and agility are important, but just 31% are satisfied with how their agency delivers in this area, creating a gap of 61% points.

Finally, diversity of teams (14%) and environmental sustainability (14%) rank the lowest in term of satisfaction with their current model.

WFA director of global media services Matt Green said: “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.

“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.”

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