The Death of the Agency of Record

caterpillar to butterfly

The landscape is morphing for agencies.

In the last week, I’ve been on no less than 5 sales calls where the prospect already had a service provider, were choosing a provider, or already had an agency. We were hired by one company to increase their search engine ranking. After reviewing their site for under a minute, I let them know that it would be a monumental effort given their ancient CMS. They contacted the agency who built their site for them and the agency promptly gave them another quote to upgrade to a new CMS. Why didn’t that agency let them know earlier?

Another company had us do due diligence on a blogging platform. The problem was that the questions they had weren’t aligned with the platform’s strengths. Why weren’t they aware of the selling points of the platform? It was a hasty sales call where the team hadn’t adequately identified the prospect’s needs nor their resources.

We’re doing due diligence for another company to review a SaaS application which they are seeking to purchase. The company hired us because of our experience in the SaaS space and knowledge of the plethora of applications on the market. They had their own internal product and technology teams – but still wanted a fresh look.

We’re not your typical agency… or so I thought. In the latest Online Media Report from eConsultancy, they’ve identified a trend in agencies and how marketers are utilizing them. The results are pretty startling… and familiar!

  • There will be no more Interactive Agency of Record – As agency firms consolidate their resources and knock down silos, there will be no need for a marketer to choose a digital unit as its “agency of record.” (This is besides the fact that the notion of an “AOR” has lost its meaning as marketers choose to spread their ad budgets among a variety of shops.) As the walls between the traditional and interactive come down, digital units will be forced to choose between subsuming themselves within the larger agency framework or challenging the traditional agencies for larger control of individual media accounts.
  • The range of competition among digital marketing shops will widen – The tug of war between traditional and online media buying will be mirrored throughout the wider marketing world. In other words, as clients demand a truly “holistic” approach to marketing, the battle to lead a campaign will be waged not only by ad men and women, but by PR firms and creative digital houses and social media specialists as well.
  • The emergence of the Connected Agency – As these battles play out, the larger holding company structure will seek to leverage its various parts in unison like never before. Of course, the reason holding companies pulled in so many marketing functions, from creative, to planning and buying, to PR to marketing and investment consultancies was to instil a greater Gestalt effect, where the whole is greater than the sum of its parts. Needless to say, despite nearly 30 years working towards that model, few holding companies can truly claim to have achieved this particular goal, though inroads have surely been made.
  • Out with the old dictionary, in with the new – In the past, terms like “GRPs,” “impressions” and “clicks,” have served as the standard of audience measurement in terms of guiding spending and determining the success of a campaign. The importance of these terms will be less essential. They are apt to be replaced by notions of “lifetime value,” “sentiment/favourability” and “influence.” Even the use of “audience” is ready for the dustbin of history, since it indicates a passive group of people. In the Internet age of “leaning forward” into one‟s media and the rise of social media, a more accurate term to define the consumers a marketer wants to reach would be “participants.”

List quoted from the Online Media Report from eConsultancy.

This is where Highbridge’s growth has been… in the Connected Agency space. We’ve become the intermediary between marketing groups and service providers and their products, their competitors, their customers, their prospects, their vendors, their PR firms and their agencies. It’s an exciting time for us and great to see validation of our business model in this report.

If you’re an agency – it’s time to change gears, no matter how hard it might be. You need to work with other vendors who have different specialties… even if there’s an overlap in deliverables. Coopetition is in. If you’re a company – it’s time to rethink your Agency of Record and take advantage of the diversity of professionals out there who can help you conquer the challenges of new media.


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