Are Agencies On the Out?

It seems that more and more businesses are beginning to bring their marketing creative and public relations needs in-house. In an effort to stretch budgets as far as possible while still keeping up with the demand for consumer targeting and innovative marketing, some are seeing the value of having a dedicated team rather than outsourcing to an agency. But agencies still provide a great service to an industry that needs creative innovation now more than ever. Are agencies dying a slow death, or is there a way to still have a symbiotic brand-agency relationship in which no one has to exit stage right?

In order to adapt to the shift in demand — more one-off projects, less long-term relationships with clients — agencies in charge of managing creative production or public relations have resorted to trying to offer a wide enough suite of services to entice clients. “What’s really confusing out there right now is that everyone is doing everything,” Jillian Gibbs, CEO of the production consultancy APR said in an interview with Digiday recently. “Agencies are producing, production companies are doing creative agency work. That’s causing a little bit of distrust or lack of loyalty in the industry.”

This evolution has become necessary as the dynamic of agency and brand relationships continues to shift. In order to maintain business and not lose clients, agencies are becoming more innovative. Offering single projects, for example, used to be a waste of energy and resources and would not be something an agency would likely consider in its heyday. Unfortunately, now more brands are expecting to come to an agency for singular needs — and the agencies are now being forced to say yes in order to keep the revenue stream moving in any direction.

Collaboration becomes the name of the game now as agencies look for solutions that still serve their clients’ needs. This is a risky operation, as agencies often pull out all resources in order to produce quality creative content or public relations services for their clients. This must be carefully weighed against costs and revenue, as the penchant for single projects may not be cost-effective.

The truth is, agencies provide invaluable services to their clients if the work is done with high quality and attention to detail. Agencies are well-trained and well-versed in the industries in which they work, and often what we see now are businesses who believe they can accomplish everything an agency can, with less effort and money. While this may be true for some, the likelihood of an in-house creative team is able to produce a high level of content an agency has — for less money, at that — is quite low.

So it’s beneficial for brands to still work with agencies. They have a widespread of resources available to do their best work, and this means that creative or public relations work can be of higher quality than a bare-bones in-house team may be able to accomplish. While the costs can be prohibitive for some, agencies are also working to provide a larger range of services available to take advantage of in order to eliminate more barriers to entry. As the brand-agency relationship evolves, it will be interesting to see how each shift priorities and still manages to stay the course for effective consumer outreach.