Flash Report: Agency of Record Model Falls Victim to Decentralization

April 18, 2018
Posted in Marketers
April 18, 2018 Ricky Costa

Recently, the CMO club released its survey findings showing CMO’s are not happy with the centralized Agency of Record (AOR) model – in which a company relies heavily on a single agency to provide most of its advertising management. According to the survey of 106 marketing officers, 47% of respondents maintain their reliance on the AOR model, although only 14% are satisfied with the performance of their current agency. Why? Lack of innovation (55%).

Agency Model Marketers

Consequently, brands are on the lookout for small to mid-sized agencies to provide flexibility in dealing with personalized content and boosting creativity. But changing agencies isn’t as easy as it sounds with 55% of respondents saying their biggest challenge is the investment of educating new agencies when they come on-board.

Marketers Agencies

Of those who use multiple external agencies, around 55% of marketers use about 4-6 agencies. But if brands choose this decentralized open agency model, they must be wary of brand fragmentation. As the CMO of Kelly Services Pete Boland said, “You must institute a rigid and clear process for insuring that you inculcate your master brief and brand across all agencies.”

When looking to do “more with less” brands are also looking in-house. A recent Association of National Advertisers (ANA) study showed that 42% of its members are moving ad efforts in-house to mitigate costs.

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