NEWS10 October 2023

Current media agency model ‘unfit for future', suggests research

Media News Trends UK

UK – Almost a quarter of multinational brands believe the agency model is unfit for future purposes, according to research from the World Federation of Advertisers (WFA) and global media advisers MediaSense.

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The research, published in the Future of Media Agency Models report, found 24% of brands surveyed felt the agency model was not suitable, while 11% said their current agency model fit their future needs.

The findings are based on an online survey of 70 multinational companies that spend more than $50bn combined in advertising.

More than half of respondents ( 53%) said they agreed there would be greater centralisation of agency services in the future.

While most respondents ( 86%) rated automation as an important step to modernisation in the advertising industry, satisfaction with current agency capabilities is low, with a gap of 66 percentage points.

Diversity of teams ( 14%) and environmental sustainability ( 14%) rank the lowest in term of satisfaction with their current model, the research found.

In addition, 47% agreed the need for specialist agencies will remain strong, with the research highlighting a high level of appetite towards retail media, influencer and in-house support as key disciplines.

Other findings include that 45% of respondents wanted more flexibility in how they are serviced, while 37% want simplification through fewer and better integrated partners.

One in four of those surveyed also wanted to consolidate media, creative, data and technology.

Key priorities for the future identified in the research for brands was access to talent ( 97%), integration ( 92%) and greater speed ( 92%).

Matt Green, director of global media services at the WFA, said: “To be clear, this appetite towards simplification can be satisfied through a distributed model where the processes, ways of working, incentives and governance are aligned, and where there is the right organisational structure and talent.

“The traditional media agency model is evolving. The focus is on a more ‘networked’ model, where global agency capabilities – regardless of where they are based – are being leveraged to unlock speed and agility and improve access to talent.”

Ryan Kangisser, managing partner at MediaSense, added: “The past three years have been transformative for the advertising industry with brands and agencies on a march to unlock much needed capability, integration and speed.

“The blurring of lines between the different marketing disciplines is accelerating this, highlighting the need for agencies to evolve their models from channel to consumer centric.

“Although we may not be seeing media and creative coming back together (just yet), this study reveals a clear intention towards integration with an urgent need for talent and processes to make this a reality.”