I’ve been having a few conversations recently about the future of agencies, especially the small to mid-sized ones.
For a number of reasons, including the rise of AI, the complexity of doing full service without serious scale and the decline in fee-based client contracts, the good old days for agency founders of starting up an integrated agency, building it up to a decent headcount and client list and then selling it to a bigger agency or network seem to be on the way out.
There will always be huge agencies (and now huge consultancies as they muscle in on the big contracts) to service the big multinational clients and huge budgets. And there will always be a place for small, agile agencies that service a particular specialism, niche or category. But, as in many industries, the mid-sized agencies, like the ones I earned my stripes in, are now left with the messy middle, with high costs, unpredictable income streams and clients that want big agency services without big agency budgets. I’ve lost track of how many times in the last few years I’ve looked at a client brief or pitch RFP and had my first thought be that they can’t have that for their budget.
The smart clients with messy middle budgets are increasingly working with smaller, strategy-led creative concept agencies to deliver big/long creative ideas that their internal team, creative artwork agency, or even AI can execute, with specialist media, digital, CRM etc. businesses then amplifying that work. I suspect there’s an element of herding cats involved for the clients, but it does mean their budget is spent in a more thoughtful manner, goes further and that specialists are allowed to excel at being exactly that.
Which means that those smaller, specialist, more agile agencies, whatever their specialism, have a real opportunity to own their niche and build meaningful client relationships. And, handily for me as a freelance/fractional, they can leverage their networks to bring in the right, experienced talent for each project, not just whoever from Big Agency was free that week.
(photo by Mr Pugo on Unsplash)