WPI CEO John Harris spoke with Adweek on why agencies must redefine their model to meet changing client demands. The following article was published on December 20, 2020. Read the article in Adweek.

Agency Talent Faces New Lures In 2021, Along With Calls to Move Beyond Core Skillset

Shops will have to go much further to prove ROI to brands

By Erik Oster

Agencies will have to navigate the demands of clients and talent in the year ahead. As the calendar turns to 2021, agency culture must meet the needs employees or risk losing that talent to competitors of one kind or another. Clients increasingly expect agencies to be able to demonstrate long-term business value while working faster to satisfy constantly evolving workflow demands. 2020 also accelerated calls for agencies to expand expertise into digital channels and ecommerce in response to lasting changes in consumer behavior.

Redefining value proposition as a true collaborative partner

The traditional skills associated with crafting arresting visuals and copy, along with analyzing the pricing and placement of those brand messages, remain at the core of what an agency does. But the days of that being the only thing agencies do will be over in 2021. And North CEO Rebecca Armstrong is blunt about what it means for agencies that haven’t adapted.

“If, as an agency, you haven’t considered how to insert yourself as a vital collaborative partner across all points of the purchase cycle — especially at point-of-sale — then you’re f*d,” she said.

Armstrong cited a McKinsey study finding that the pandemic collapsed a decade of ecommerce adoption into three months. Over half of consumers plan to continue to utilize curbside pickup and grocery delivery after the pandemic, according to CommerceHub. 

“Clearly this has staffing, organizational and positioning implications for agencies,” Armstrong said. “We need specialists and we need to figure out where they belong in the nexus between creative and media—and we need to convince clients that we can do this.”

Agencies are under more pressure than ever to balance long-term brand building measures with managing costs and demonstrating a clear return on investment in ad spending.

Advertiser Perceptions CEO Randy Cohen explained that agency execs seemed to lag behind their client-side marketing counterparts in viewing forms of paid advertising as an investment. In a survey of 300 such execs, Advertiser Perceptions found that two-thirds of marketing execs viewed all forms of paid advertising as an investment, versus one third at agencies.

“That’s a critical gap agencies must close to stem the tide toward consulting firms and in-house operations,” Cohen said. “They can’t close it by spending money more efficiently and demonstrating audience gains. They must prove the impact of campaigns on brands’ bottom lines.”

“The pandemic intensified the urgency of a real value proposition—an authentic delivery of a service that advances the client’s business in meaningful ways,” Greatest Common Factory founder, strategy lead John Trahar explained, citing a need for agencies to display how every aspect of the work they do for clients directly contributes to business goals and to staff accounts with talent that contributes measurably to such goals—something he said will require agencies to build “a more multi-talented, multi-disciplinary staff.”

Worldwide Partners CEO John Harris explained that while agencies have proven their ability to evolve before, the changes required now are “not about simply building new capabilities, developing new pricing structures, or exploring new operating models; it’s all of those, and more, concurrently.” 

“Core to the rebirth of the agency model is making the transition from service provider to value provider, and in so doing, establishing a framework that enhances agency remuneration,” Harris said. 

Talent and employee wellbeing

Agencies are competing for talent not only among each other anymore. Their new hiring rivals are emerging in the form of brands’ own in-house agencies and growing freelance networks. The additional avenues for ad industry personnel underscores the need to develop a culture that attracts, fosters and retains staffers. Startup agencies are also popping up with models designed to leverage such talent networks to build custom solutions for clients.

Mojo Supermarket founder and CCO Mo Said told Adweek that he saw an issue with this approach. “If all agencies are using this same pool of talent, nothing is going to distinguish the work from one agency to the next,” he said. “The creative and strategic talent that an agency has on its staff is what separates great agencies from the rest of the industry.” 

Quantasy CEO and CCO Will Campbell noted that employees in advertising, an industry notorious for high stress and long hours, already spoke of suffering from work-related trauma before the pandemic and now deals with the added stress of isolation. He argued that 2020 has underscored how employee wellness can’t be viewed as a “luxury” but rather the top issue facing agencies.

GroupM global chief people officer Jennifer Remling added that it will be crucial to put talent first and focus on people strategies after such a difficult year, which will require a much deeper commitment than temporary wellness programs. 

“Agencies need to prioritize systemic changes strengthening the support functions that promote positive experiences, foster diversity and belonging, and aid in productivity,” she said, adding that such investments in people and HR leadership pays dividends in recruitment and retention. 

Such commitments to employee wellbeing could be put to the test in a year which could see an explosion of reviews force agencies to balance employee health with client demands. 40% of marketers in a recent Adweek Intelligence survey said they were considering changes to their agency rosters over the course of the next 6-12 months. 

“Agencies will confront a growing demand for in-person meetings and pitches. And a lot of their people may not be ready and willing to go,” 9thWonder CEO Jose Lozano explained, adding it’s an issue he’s already seeing at his own agency with clients having on-site meetings involving multiple agencies.

Employees who, understandably, aren’t comfortable attending such meetings in-person, have face implied pressure from clients. 

“One told my new business people, ‘We’re having this planning session. You don’t have to be there but the others will be, your call.'” Lozano said. “The clear implication: remote will count against you here. Agencies will have to get ahead of these conversations from the start of a client relationship, so the expectations around client service are clearly defined. If we wait until the ask, we’re in a bind.”

Lozano foresees this becoming a dividing line in the year ahead, with agencies forced to pick a side, adding that 9thWonder places its employees’ health and well-being first. 

“If we need to provide technology to facilitate remote working for a client, like big-screen video conferencing in their conference rooms, we’ll put the money up to install the equipment they need,” he said. “And if a client isn’t willing to honor the precautions of an employee or team, they can’t be our client.”

As the pressure to win new business and recoup losses from 2020 mounts, how many agencies will take a stand for employee wellbeing when it could mean walking away from such opportunities? 

Agencies also are looking ahead at a future where automation will play a role in helping them efficiently serve clients and allow employees to shift focus to tasks requiring human insights. While many fear automation could lead to further job losses, others argue it has the potential to create more efficient work and positive work environments as talent is free to pursue solutions requiring human innovation 

“Leveraging AI and workflow automation via systems and tools, agencies can focus on higher level capabilities that deliver greater value to clients,” 4As CEO Marla Kaplowitz said. “Automation of rote tasks and monotonous work allows agencies to reimagine how the organization works and elevate roles addressing problem solving, critical thinking and creativity.”