Several months ago the IPA asked me to conduct a new piece of research giving a fresh perspective on the future of agencies. The culmination of that work has now arrived with the launch of a new report. I presented the findings at Ad Week last Week and there was an insightful panel discussion with some sharp minds present.
The report has been fascinating to write. There is no doubt that agencies are facing huge pressures from commoditisation, margin dilution, and time squeeze but shifts in client focus are also bringing new opportunities for those agencies that are ready to embrace change. The key dynamic of the report is framed in the context of systems (data, technology, efficiency, delivery at scale) and empathy (human insight, creativity, relational connection), a matrix originated by Charles Leadbetter in a report about the future of London (HT to David Carr). In Leadbetter's example, high system/low empathy relates to functionally efficient, scaled systems like the oyster card. Low system/high empathy relates to human-centred, highly relational situations like a small, local market. But it is when these two elements are combined that the potential of London as a city really comes to life - exemplified, he says, by the London Olympics in 2012.
So it is with agencies. A disparate set of consultancies and agencies coalescing around the centre ground of customer experience. Large, traditional consultancies coming from business and strategic consulting, and organisation and operating model design, expanding their capability through the acquisition of design and creative talent and competency. Digital and more creatively led agencies broadening out from marcomms and front end into consulting, technology and digital transformation. Both converging on the top right quadrant.
This rapidly evolving context gives us a spectrum of agency capability along which we have an increasingly diverse set of propositions ranging from 'full-stack' large consultancies to small, network orchestrating agencies. Around this sit significant shifts in agency operating, client engagement and remuneration models. It was important to me that the report was as tangible and as useful as possible to agency practitioners, and so I've set out what I believe (drawn from the research findings) these key shifts really mean for agency capability. Marketing Week covered the launch here, and you can get a copy of the report from the IPA website. I hope you get something from it.