{"id":11871,"date":"2024-04-18T14:55:56","date_gmt":"2024-04-18T12:55:56","guid":{"rendered":"https:\/\/www.observatoryinternational.com\/our-insights\/whats-the-right-marketing-agency-model-for-your-brand\/"},"modified":"2025-12-09T15:50:38","modified_gmt":"2025-12-09T14:50:38","slug":"whats-the-right-marketing-agency-model-for-your-brand","status":"publish","type":"post","link":"https:\/\/www.observatoryinternational.com\/en-za\/our-insights\/whats-the-right-marketing-agency-model-for-your-brand\/","title":{"rendered":"What\u2019s the right marketing agency model for your brand?"},"content":{"rendered":"

In our work with marketing organisations and brands in the UK and around the world we\u2019ve identified some characteristics and principles that help determine the right marketing communications agency model for a brand or company.\u00a0 At the core is a universal truth \u2013 which is that the agency model should reflect the strategy of the organisation.\u00a0 But underpinning that there are some further considerations and levers that point the way to the right model.<\/p>\n

At its most simplified, we\u2019ve identified 7 key types of marketing and communications agency models:<\/p>\n

\"\"<\/p>\n

They range from models which offer a greater number of agencies to work with to models that include a few or just one agency partner.\u00a0 However, with more choice comes more complexity to co-ordinate and manage them; whilst a less complex interface may offer potentially easier governance but with less options and nevertheless require careful management.<\/p>\n

It\u2019s worth emphasising that a real-life example of an agency model may not be so cut and dried as this graphic suggests \u2013 in reality clients may deploy a hybrid of a couple of models, but there is generally one dominant model.<\/p>\n

Many companies do not operate within these identified models.\u00a0 Marketing and Procurement teams often approach us when their roster of agencies has become bloated over time or distorted form their original intent and they need support to address these issues and return to a carefully curated and managed choice of agency partner(s).<\/p>\n

So what are the considerations that influence the identification of an agency model?<\/strong><\/h2>\n

The Operating Model<\/strong><\/h3>\n

What\u2019s the operating model of the brand or company \u2013 centralised, decentralised or centres of excellence.\u00a0 Luxury brands often favour a centralised model to ensure strong brand consistency and management.\u00a0 Whilst brands that require cultural and market-nuanced communications (such as food or beverages) tend to favour a decentralised model.<\/p>\n

The Geographic Remit<\/strong><\/h3>\n

Global teams may require different models to their regional and market-based colleagues as the communications challenges and requirements are different, e.g. brand platform versus activation.<\/p>\n

Role in the Communications Process<\/strong><\/h3>\n

While creative, production and media obviously need to be aligned in one development process there may be some variation in the agency models adopted for these different disciplines.<\/p>\n

Communications Task<\/strong><\/h3>\n

The balance between brand and tactical work will also influence the model, including to some extent the disciplines and deliverables required within the overall Scope of Work.<\/p>\n

Resourcing and Capabilities<\/strong><\/h3>\n

The size of the marketing team, their experience, capabilities and maturity also needs to be considered when selecting an ideal agency model.\u00a0 Whilst some of the models offer a simple interface via one agency group, the governance and management of the agency can be quite complex to put in place and optimise.<\/p>\n

Conversely having too many agencies can be a considerable burden on both marketing and procurement teams because of the additional agency relationship management involved.<\/p>\n

Budgets<\/strong><\/h3>\n

Similarly some of the \u2018single source\u2019 agency models may be cost prohibitive to some brands and companies because of the overhead of centralised agency management.\u00a0 Nevertheless for those brands that are able to fund a single source agency model there are efficiency and effectiveness benefits that can offset this overhead.<\/p>\n

Industry Sector<\/strong><\/h3>\n

The industry sector the brand or company operates in is one factor that does not necessarily <\/u>influence the choice of agency model.\u00a0 We are often asked by brands we work with to show them examples of agency models from their competitor set.\u00a0 When we do this we are able to reinforce the universal truth that structure should follow strategy \u2013 because there isn\u2019t a default sector model and we\u2019ve been able to demonstrate that across multiple categories and industry sectors.<\/p>\n

The following chart illustrates some of the tensions and characteristics that brands need to balance and consider in an agency model:<\/p>\n

\"Agency<\/p>\n

Macro Trends<\/strong><\/h2>\n

There are some macro trends that are influencing all types of agency models and will have a significant impact on whether an existing model is fit-for-purpose in the future.<\/p>\n

1. In-housing<\/strong><\/h3>\n

In December 2023 we published with the World Federation of Advertisers a report on Global Trends in Agency In-housing.\u00a0 Key insights from that report were the increasing use of in-housing with 66% of major brands surveyed having in-house offerings – a 16% growth from 2020.\u00a0 With the skill-sets, scope and scale of the in-house resource also expanding.\u00a0 With a desire by brands to have tighter control and flexibility, these trends are set to continue and have a bearing on the external agency model.<\/p>\n

2. AI<\/strong><\/h3>\n

But the biggest disruption to existing agency models and agency rosters used by brands is likely to be from AI, and the speed of that change will likely catch many brands off guard.\u00a0 AI is offering considerable opportunities at multiple stages in the communications process:<\/p>\n