Brands are rushing to shake up their marketing operations
A view from Graham Brown

Brands are rushing to shake up their marketing operations

Changing consumer habits and new competitors are forcing brands to rethink their marketing and their agency model.

Two-thirds of brands are actively looking to reorganise their internal marketing operating model to better equip themselves for the future and almost all plan to reorganise their agency model.

Those are the key findings from MediaSense's new research, Media 2020 & Beyond.

Unsurprisingly, brands undertaking such reorganisation proceed to review their agencies with renewed clarity on their requirements and where they can deliver the most value. 

So what’s behind all this? We think there are five drivers of change.

New consumer expectations

Saying consumers’ needs are changing is like saying "Night is dark". Nevertheless, it is worth emphasising that the speed of change is forcing brands into making a strategic pivot from linear to more agile and dynamic marketing.

To do this necessitates greater proximity to those consumers and more control over marketing’s levers than has historically been the case. 

As consumers’ engagement with technology and purchasing behaviours change, they expect a more personalised and responsive interaction with brands.

Brands are having to challenge themselves and their agencies to develop new strategies for engaging with more demanding consumers.

Brilliant ideation and creativity for brand-building are still prized capabilities, but so is fast, cheap, good activation – aligning these two often opposing forces and deciding who does what, where and with whom is the challenge.

Such turbulence inevitably leads to organisational change and experimentation with new internal marketing and external agency models.

New breed of competitors

Not so long ago, although a brand’s competitors came in different shapes and sizes, they would essentially behave the same as each other. Today, whole categories are being disrupted and redefined by a very different set of entrants, which are much faster and more agile than the incumbents.

Technology has lowered barriers to entry and a new wave of direct-to-consumer brands have emerged, heavily backed by venture-capital investments seeking the next tech unicorn. 

In response, more traditional brands are undergoing digital transformation programmes, adopting leaner and nimbler operating models with the expectation of becoming more efficient, raising productivity and increasing speed.

Becoming more agile means recalibrating internal roles and responsibilities, upskilling teams and recruiting specialists to make the adjustment from "oversight" to "doing" – all of which is having a significant impact internally as well as on agencies.

In-housing and co-locating

Brands that have direct relationships with their customers have long understood the value of controlling and utilising their customer data and, facilitated by technology, are bringing more data-driven marketing and media functions in-house.

The scope of in-housing varies dramatically from one advertiser to another, but the pioneers are already managing their biddable media channels.

Brands on this journey complain agencies simply don’t move fast enough, so they are "mirroring" – ie creating their own internal agency model to optimise workflows. They are still experimenting here and are learning that further iterations are required to settle on the right model for their business.

Indeed, many are relying on their agencies to educate and help transform them, posing an interesting conundrum for those agencies.

This is one of the reasons why "co-location", which plugs agency resource directly into the client, is a valuable alternative for brands not yet prepared to acquire and sustain self-serve capability as it delivers improved speed and flexibility without the burden of ownership.

Building a performance marketing culture

The shift of resources and investment from brand to performance marketing, fuelled by data and powered by technology, creates tensions both internally and externally between brand and performance-oriented marketers.

Building a successful performance marketing culture requires marketing organisations to build co-located, multidisciplinary teams populated increasingly by specialists.

These performance-based organisations are typically seeking to develop more dynamic, personalised communications and are more likely to seek out specialist agencies or management consultants as an alternative to traditional agencies, which are not perceived to be set up to deliver the speed and quality of output required. 

When growth is challenging

Many categories are experiencing slower organic growth. Faced with such challenges, organisations have little choice but to operate more effectively and efficiently by cutting unproductive costs.

This inevitably leads to efficiency-driven internal and external reviews and many brands are lowering their cost of ownership by repurposing and retraining their own marketers to absorb roles traditionally fulfilled by agencies, leading to smaller rosters and narrower scopes of work for those agencies.

Far from spelling doom and gloom for the agency sector, this scenario creates new opportunities for agencies to develop new operating and remuneration models, as well as proving their credentials for driving growth through great ideas and brilliant execution.  

While some suggest that issues around transparency and trust are driving internal and external operating model reorganisation, we have found no evidence of this in the real world.

These issues are rightly seen as fixable by the brands that enforce tight contracts and robust governance.

Graham Brown is a director and co-founder of MediaSense. Media 2020 & Beyond is published today