Modern advertising agencies are dead, but long live the modern advertising agency!
Agencies are all about effectiveness. They are independent entities hired to help a business conquer a market. This was the case before, and will remain the case in 2018. But recently, pressures on agency business models are forcing these shops to shit how they serve clients and prove their worth.
“The modern agency is going to have to really shift away from communications and messaging as the sole driver of revenue and have to really understand product and experience as the core thing they create and layer messaging around that. I think that a modern agency is building a lot more than agencies ever have in the past,” said Ben Gaddis, president of independent agency T3.
Many agencies, which are often isolated from brands’ marketing organizations, are angling to ingrain themselves deeper within clients’ businesses, with the focus on centralizing themselves closer to the bottom line. At the heart of this repositioning among agencies is a brand retrechment among marketers.
“One of the flashpoint issues for agencies is the financial reality of their business model and clients’ continued activity around margin compression,” said Forrester analyst Jay Pattisall.