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What Agencies Should be Ready for in 2019 (New Biz Perspective)

Posted by Mark Duval on Jan 10, 2019 6:55:00 AM
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2019 is here, and with it, a flood of advertising industry predictions. From an agency new business perspective, we can expect ongoing change (which has become the norm) and a continuation of trends from previous years. Unlike previous years, the potential for these trends to touch your agency’s new business outcomes and bottom line seems greater.

agency new business trends 2019

In 2018, ongoing threats to agency new business got a lot more real for agencies. We saw consultancies, in-house agencies, project-based work, and shrinking agency-brand relationships transition from abstract, deniable threats into real-life, “this is definitely hurting our bottom line” phenomena for a greater number of agencies. Well-known agencies closed up shop; many more considered it.

In 2019, agency leaders will need to be more proactive and devote more resources in response to industry changes if they want to succeed in these conditions.

I’ve identified some ongoing themes that have become so persistent and prevalent that they can no longer be ignored. Neglect to address them, and it will likely hurt your new business prospects. More importantly, if you get ahead of them, you may find ways to create new opportunities from them.

Here's what agencies should be ready for this year:


1. Marketers will continue to take work in-house.

(This is true even though some work will come back—in part or in whole—as marketers negotiate their best solution.)

Here are a few examples of what agencies can do in response to the in-house trend:

  • Be prepared to work with other agency teams in a genuinely collaborative and productive way as brands tap resources in new configurations to meet their needs.

The bottom line is: brands are taking work in-house out of distrust, fear of overpaying, desire for greater control, and concerns that agencies are too slow and don’t “get” their brand enough (In-House Agency Forum and Forrester, 2018). Successful agency solutions will address those underlying concerns.

new agency brand relationships

2. Be prepared to rebuild credibility.

Trust between agencies and brands has been damaged, and with it, relationships. One need only look to the shrinking scope and length of agency-brand relationships for evidence of that. To repair trust, agencies will need to emphasize transparency and value (value being business results and ROI rather than lowest cost services). They can do that by tying creative to business outcomes and dropping marketing jargon to speak the same language as the C-suite.

Look at the consultancies. They talk about bottom-line results and operate with efficiency.  This approach has helped them enjoy success at the expense of traditional agencies. Ad agencies who can offer business outcomes and transparent processes in addition to stellar creative will be in demand.

3. New agency models will emerge.

Expect more M&A and evolution as agencies continue to restructure and repackage their services. The emphasis will be on agency models with less fat, less overhead, and greater category expertise, as agencies strive to become faster, more responsive, and offer more value. We will also see agencies emerging with unique business models as they seek new opportunities to meet the needs of the changing marketplace. There will be more agency closings, re-brandings, above-average employee migration, and new competition.

Agencies should take time to re-evaluate their own model and see if they need to make changes to their structure, services, or positioning to remain competitive in this context. Where do your agency’s future opportunities lie? Are you speaking a language marketers will respond to in 2019? Can you forge a new partnership or make strategic hires to strengthen your agency’s position?

reevaluate agency position

4. Agency culture needs attention.

Concern about agency culture is well-publicized, yet continues to challenge agencies. This increasingly has a negative impact on new business generation, as brands demand more gender and ethnic diversity. To start, that means creating a safe, inclusive environment with opportunities for all. It also means investing in ongoing education, recognition, incentives, and advancement opportunities for agency employees. Anomaly is an example of an agency that has made these investments and seen it translate into positive business outcomes.

Desirable employer culture is not just a “nice to have.” Agencies are notorious for their long hours and low pay, which challenging market conditions have only exacerbated (The Drum, CampaignLive). At one time, this sacrifice was viewed as worthwhile to workers due to the excitement of the work and the future potential opportunities, but that can no longer be assumed. The future of agencies and their employees are much less secure now. Employee morale is low and workers have alternative options in consulting firms, in-house agencies, and Silicon Valley — not to mention freelancing (CampaignLive). To attract and retain the talent they need to remain competitive, agencies must make their culture a priority.

5. New business isn’t what it used to be.

The way new business is awarded is changing, as are its scope, duration, and context. More work is being awarded on a project basis, and larger projects are emerging from relationships established through smaller, trial projects. If your agency has looked down on project work, it’s time to reconsider your perspective. A project is an excellent opportunity to show a brand why they should give you more business. Not to mention — unlike most pitches — projects are paid work.

We will also see more attempts by brands to either streamline or avoid the traditional RFP and pitch process. Considering how costly pitches have become, this is a favorable development for agencies.

Be aware that in the current context, marketers hold disproportionate power. To avoid undervaluing themselves, agencies must be clear on what they will and won’t compromise on, where they can be flexible, and which opportunities are worth going after.

What can your agency do to prepare?

Firstly, have internal conversations and develop a strategy so that you know how to respond to these issues before you are asked about them. Secondly, conduct inventories and hold brainstorming sessions to assess where your agency stands on these themes, scrutinizing your positioning in the 2019 context, identifying where changes are mandatory, and what to tackle now vs. later.

agency new business strategy

Finally, keep in mind that increased competition makes it more critical than ever to have a proactive new business program. It’s true that I say this every year, but I’m fairly confident a lot of agencies don’t heed my advice to create (or update) and implement a consistent new business program on an annual basis. It is important every year; this year it’s mission-critical. In 2019, agencies need to manage resources wisely and cut waste, which means disqualifying poor-fit opportunities as quickly as possible. Proactive lead generation activities can help you focus efforts on connecting with businesses that are right for your agency.

To win at new business you need a solid, repeatable strategy that aligns with your business objectives and a commitment to devote time to activities in support of that strategy every week. Use an up-to-date new business plan as your foundation. With that in place, you can layer on additional tactics like thought leadership, lead nurturing, and questioning strategy to improve your agency’s new business outcomes. Doing the work to create this new business foundation can also inform a stronger agency position and improve resource efficiency.

Need help with new business? Learn how outsourcing can help:

Can Outsourced New Business Help Your Agency booklet

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A related version of this article was published in Adweek on December 28, 2018.

Image credits: agency trends © Adobe Stock / Chris Titze Imaging; new agency brand relationships © Adobe Stock / WavebreakMediaMicro; re-evaluate agency position © Adobe Stock / Olivier Le Moal; agency new business strategy © Adobe Stock / WavebreakMediaMicro

Topics: Agency New Business

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