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Top 5 Things for Ad Agency Leaders to Know Now

Posted by Mark Duval on Sep 29, 2022 6:41:00 AM
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There were so many important things to discuss this week that we couldn't pick just one. Instead, we're trying something a little different, focusing on the top five things that moved us this week—and all are valuable for agency leaders to know.

Read on to explore what's new for in-housing, winning new business without pitching, creative effectiveness, treating people decently, and new business insights from global consultancy R3. As always, you'll find our insights layered in to address what it means for agencies.

in housing news advertising agencies-1

In-housing fails

Over at The Drum, Sam Bradley covered a new small study on in-housing conducted by digital agency Collective. 150 chief marketing officers at companies with more than 250 employees participated. The study revealed that CMOs are disillusioned with in-housing. 

33% of CMOs at mid-size companies (with 500 employees or less) say in-housing is an operational/managerial nightmare. Over 50% of CMOs at enterprise organizations (with 2,000 or more employees) agree it's a nightmare. And 39% of CMOS think in-house marketing teams lack inspiration.

Despite its limitations, the study delivered some satisfaction for many agencies who have been waiting for the pendulum to swing back in their direction. (Should you want to bask for a moment in the petty glory of marketers’ in-housing challenges, we won’t judge.)

But is in-housing going anywhere? Don’t count on it. Instead, expect an ongoing evolution of how in-house teams and agencies work together. 

Need convincing? In a recent presentation to the 4A’s, global consultancy R3 suggested that agencies build “use case experience” from working with clients’ in-house teams and be willing “to implant agency talent within client teams.”

Winning without pitching 

The traditional agency review and pitch process have long been out of control in terms of costs and value to agencies. For most agencies, in most cases, it's preferable to avoid the costs of pitching by leveraging a project into an opportunity for growth.

Jameson Fleming recently covered a series of notable wins by The Martin Agency in Adweek: Royal Caribbean, Santander, and LegalShield—all won without pitching. Between those wins and other new work for Google Creators and Hasbro brands, The Martin Agency has brought in about $20 million in new revenue outside of a full formal pitch.

How are they able to pull this off? First, The Martin Agency and its CEO, Kristen Cavallo, have enjoyed significant positive press and accolades based on recognition for their creative work and organizational culture. But what Fleming specifically calls out is their leadership’s ability to maintain relationships with past clients (both of The Martin Agency and from prior agency roles). 

At the same time, he notes that they’ve been selective in the accounts they pitch. That’s an important point. Because had they not been as selective about pitches, The Martin Agency would have had fewer resources available to invest in developing and maintaining their prior relationships. 

Could this approach work for you? Yes. Will it work as well for you as it did for The Martin Agency? Probably not, because you’re (most likely) not The Martin Agency. But you can find the right balance of new business strategies for your agency and ensure you are allocating enough resources to cultivate relationships effectively.

creative effectiveness update


Let’s talk about creative effectiveness

At TDP, we’re gung-ho about creative effectiveness because it leads to the measurable results needed to win new business. There have been two noteworthy pieces of content recently on the topic. One explores whether awards juries are rewarding work in a way that furthers the disconnect between creativity and brand performance. There are a lot of layers to unpack in that discussion, and Gurjit Degun does so with skill. 

For example, why is most creatively effective work misaligned with the work recognized by creative awards? And perhaps most importantly, how can we get back to valuing work that drives business impact, particularly as we enter an economically challenging year where clients will be focused on bottom-line impact? Read Degun’s coverage at Campaign UK to see what industry insiders say about it.

Second, the IPA published its Marketing Effectiveness Roadmap 2022. Their research "revalidated that having an effectiveness roadmap is a key component of creating a strong(er) marketing effectiveness culture." Specifically, the roadmap helps create a more balanced approach to value creation within brands and agencies. 

“When a roadmap is present, brands are 41% more likely to believe that their organization balances the long and short term and 71% more likely to believe long term brand effects are crucial.” — IPA’s Marketing Effectiveness Roadmap 2022


Despite the potential benefits, 26% of brand respondents and 37% of agency respondents reported that their brand or agency still lacks an effectiveness roadmap.

The IPA also found that priority areas of improvement for agencies in the next 12 months include: 

  • Helping clients understand that the agency is a creator of value rather than a cost to brands
  • Not allowing effectiveness to be siloed within planning, analytics or other departments 
  • Facing their biggest effectiveness challenge: the perceived lack of data sharing from and with agency clients (and clients’ other agencies)


TIP: Learn more about the real-world implications of creative effectiveness for marketers and their agencies (and see how it can be used to your advantage) from LIONS, WARC and the Effectiveness Partnership here.


We’re not nice 

There’s no point in mincing words. As layoffs continue across the advertising industry amid economic challenges, new data reveals the ad industry is also the worst at handling layoffs.

AdAge covered a recent study from employer review site JobSage which found the advertising and media industry is among the least compassionate when it comes to layoffs. JobSage surveyed 1,000 U.S. employees who had been laid off across 11 different industries. 

Respondents were most likely to report poor treatment when being laid off from employers in advertising and media compared to other industries. 83% of workers laid off from advertising and media employers reported “callous treatment,” compared to an overall average of 65% of respondents who felt that way across industries. 

Those laid off from advertising and media employers were less likely to be offered a severance package and more likely to receive no advance warning. In this group, nearly half reported they “did not feel cared for at all” when being informed of their layoff, compared to just 35% of respondents overall. Almost half of this group were laid off via phone calls, email, messaging apps, or virtual meetings (either group or individual). And 20% of them reported they never had the opportunity to ask questions or discuss their layoff. 

It sounds like advertising has earned its title of “worst” at layoffs. The upside is there’s a lot of room for improvement. If you are committed to treating your people better, see this post from AdAge, which provides tips on respectfully conducting layoffs.

treat people better advertising industry

Speaking of treating people better…

Kimeko McCoy’s article about Mojo Supermarkets’ founder Mo Said in Digiday is worth a read simply because it’s a feel-good story about a talented creative succeeding for all the right reasons. But it also illuminates Mo’s experience as a Pakistani-bred creative who felt like he had to play a character, leaving his accent, his name, and his whole self at home just to blend into the predominantly white ad industry. He describes how it broke his personality and launched him into depression. 

As the ad industry talks about commitment to employee well-being, DE&I, and talent retention, agency leaders should take Mo’s story to heart. Droga5 lost Said and his talents—but it could have happened to nearly any agency. The reasons why reinforce what we already know: adland must do better. Too much creative talent is lost to the industry because there isn't enough space for everyone to be successful and be themselves. Thankfully, Mo reclaimed himself and stuck around on his own terms.

Highlights from R3’s presentation to the 4A’s

Global consultancy R3 gave a presentation at the 4A’s National Committee Meeting for September. R3 advises brands on agency relationships and is a go-to data source for many respected industry publications (so consider this information both high-value and trustworthy). Here are just a few of the takeaways:

What’s driving agency reviews?

Agency reviews (while declining overall) are currently driven by a mix of factors, including a need to improve or build out with specialist agencies in areas like e-commerce and digital. Other motivating factors are client desire for greater control, better agency expertise, more alignment with ESG values, and cost concerns. 

What are clients looking for from agency partners?

According to R3, what clients most want from agency partners now is collaboration, agile innovation, data capabilities, and applied DE&I. 

Specifically, where DE&I is concerned, agencies need to be sure they are walking their talk across the board. That encompasses everything from talent diversity, training and employee well-being to supplier diversity programs, portrayal in communications and purpose-led marketing.

What’s the outlook for independents?

We will continue to see independent agencies working with big brands for reasons that include their ability to tap great creative talent virtually, the nature of project-based work, and the variety of agency relationships across individual brands. Additionally, independent agencies provide better access to leadership and senior-level creatives. More big brands have realized they prefer to work with the agency's A-team. 

Here’s our take: Agencies of all sizes and types will continue to find new business opportunities—if they plan accordingly. By that, we mean not only getting fit for service across the elements and qualities clients are looking for but also having the flexibility to take on opportunities via projects and know how to grow them.

Projects are commonly pitted against retainers for comparison, but when we evaluate projects against agency reviews, they start to look a lot more favorable. Project work can be a money-generating and money-saving new business onramp for agencies.

That’s it for this week.

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Image credits: Photo by Jason Dent on Unsplash; Photo by "My Life Through A Lens" on Unsplash; Photo by Katarzyna Pypla on Unsplash

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