This article was originally published by Beet.tv. View the interview video here.
In the age when brand marketers can use cloud-based tools to carry out many of the functions of their media agencies, the prospect of disintermediation seems to pose a risk to the historic agency model.
Omnicom Group media agency OMD understands that risk. Its global CEO Florian Adamski raised eyebrows around his company back in February when he was quoted saying that: “A lot of agency people have forgotten that we do not have a natural right to exist.”
In this video interview with Beet.TV, Adamski says the likelihood of brands taking agency functions in-house is irreversible – but so is the growing likelihood that agencies will find new functions to perform for their clients.
“It is all about effectiveness,” he says. “I don’t think that this in-housing trend is something we will ever reverse. On the flip side of that, actually ,I don’t think that the in-housing trend will infinitely go on.
“Clients are starting to realize that there is a role for agencies, that there is a role for service providers that have a very, very broad view of the spectrum and the different approaches and solutions that are out there to drive better business.
“And I think we will be seeing lots of different shades of gray when it comes to clients that might fully in-house all of that digital and data capabilities.”
- “Others will probably own the contracts but have media agencies or other service consultancies executing it.”
- “And yet again, others will revert back to a model where they will fully rely on agencies and service providers to run their media marcom activities, but probably in a way where agencies have to put their money where their mouths are and be more and fully accountable to driving business outcomes.”
The number of US brands which have launched in-house agencies has reached 78% – up from 58% in 2013, according to the ANA’s In-House Agency Report.
But many figures vary, and chatter often suggests that implementation isn’t as easy as going all-in on in-house.
Regardless, Adamski sounds a warning.
“(Some agencies) have lost clear sight of the fact that clients don’t want to work with agencies,” he says. “Clients don’t even want to work with a consultancy. Clients want business outcomes.
“Clients have realized that taking back control and having ownership of data, of contracts, of technology might be a good thing.”