NEWS23 March 2017

Agencies facing commoditisation and short-termism

News UK

UK – Developing new agency propositions, abilities and talent is the necessary defence against commoditisation and short-termism pressures according to a new report from the Institute of Practitioners in Advertising (IPA). 

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The IPA Future of Agencies – Systems and Empathy report, in conjunction with Econsultancy, researched the changing landscape and agency requirements by interviewing senior agency and consultancy heads, clients, innovation specialists and futurists.

The author of the report Neil Perkin, founder of Only Dead Fish said: “Participants in the research spoke of ‘waves of commoditisation’ impacting from many sides as traditional areas of agency margin get squeezed between the compounding forces of client procurement, technology and automation, and increased staff costs reflecting the need for agencies to employ a wider range of expert – and scarce – skills. Agency heads are now acutely aware of the need to transform their offering and accompanying requirements, and to transform quickly.”

Among its findings were the move from agency retainer remuneration models to project-based payment; the growing importance of strategists and planners within agencies as more value is placed on strategic consultancy; despite increasing numbers of martech vendors respondents didn’t feel they understood enough to lead brand activities; and the growing role of customer experience where agencies can blend creativity, technology and data.