As Brands Handle 'Grunt' Work, Agencies Supply Expertise

There's a great line in the movie "Get Shorty" where John Travolta tells a guy who wants to be his business associate that if he already has the script for a blockbuster, what does he need a hustler like him for?

One can almost begin to hear the same sentiment coming from CMOs this morning as the 2019 Dentsu Aegis Network CMO Survey is released. There is good news, and bad, for digital agencies. 

On the downside, more than half are planning to take some digital advertising capabilities in-house. This increases to around two in three in sectors including tech, energy and telecoms. On the upside, 40% say they will still be spending more with digital agencies going forward. 

It seems contradictory, doesn't it?

A possible explanation is that the overall amount of work is increasing as higher proportions of budget go into digital. That allows for brands to both take work in-house and increase the amount of briefs handed out to agencies. 

The Drum arguably nails this by pinpointing, from the research, what agencies are still being required to provide more of. The figures show that brands still have agencies as their go-to guys for customer insight, creativity and talent. 

This chimes perfectly with conversations I have had within the industry where in-housing is seen as less of a threat than it was once feared to be.

The reason? One very senior exec confided in me that it's what he called "the grunt work" that is going in-house. The clever stuff, the creativity, strategy and consumer research and insight are still being offered to agencies. 

It also fits in perfectly well with an agency I was recently talking to that is offering a hybrid model. Clients tend to host their own data and provide much of the day-to-day running of campaigns. However, the agency is there to programme the tech, provide campaign templates, organise the data, and strategise what outcomes are needed and from which customer segment they are most likely to come.

At the top of the agenda, however, are staff. In the agency's experience, brands find it difficult to recruit, train and retain staff, particularly for highly skilled technology roles.

Brands face the problem that from a standing start, it's hard to know which tech is best, what skills are needed and how to attract a lone tech guy or two to effectively whittle down their career choices by working on just one piece of tech for one client.

Rather than narrow their options, most tech people want to be among like-minded techies working on a variety of clients in different niches. Variety is great for job satisfaction, as well as keeping avenues open for future moves.

So Dentsu's figures show what is clearly developing in the market. Brands are taking on more roles at the coal face, such as running programmatic campaigns. However, the support needed to set up the tech, devise a strategy, segment customers databases, provide compelling creative and customer insight is still being left to agencies.

While the pie is getting bigger each year, then, it seems that all is ok. There is enough work to go around.  The next downturn in business, however, will be an interesting one, and will occur after brands have grown in digital marketing confidence -- perhaps enough to seriously challenge the amount of business handed to agencies?

For now, however, it seems the grunt work is being done in-house, and the smart, creative and tech roles are still being handed to agencies. 

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