How Agencies and Brands are Redefining Collaboration in Advertising

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In 2024, the advertising agency world is grappling with several challenges, including rapidly evolving consumer behavior, the swift pace of technological advancements, fierce competition for talent, and shrinking budgets from brands.  

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Last year at Cannes Lions, consultancies such as Accenture Interactive and Deloitte Digital made a significant impact with their entrance, highlighting how the advertising market is growing with additional players entering the stage.

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Mergers and acquisitions are reshaping the advertising landscape, and it seems that adding capabilities and specialized divisions has become a key performance indicator for growth for advertising agencies.

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According to a recent survey by the ANA (Association on National Advertisers), 59% of brands still choose their agency partnerships on a cost/price basis, putting additional pressure on declining margins.

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Traditional firms are praised for their extensive services and capacity to integrate diverse marketing disciplines.

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The largest media and advertising agencies in the world are holding companies that embody a "bigger is better" philosophy, focusing on resource consolidation and greater skills, and their model is still the most frequently leveraged by global brands.  

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A recent survey conducted by the World Federation of Advertisers revealed that single established holding companies still lead the industry scenario, with 47% of brands worldwide favoring this model for advertising.  

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However, data shows that there is an emerging and increasing trend toward different brand-agencies models: in addition to in-house advertising management (either full or hybrid), brands are also collaborating with multiple smaller agencies at the same time, recurring to single specialist agency network or leveraging innovative forms of collaboration.

As traditional networks navigate the challenge of rapid adaptation, the current environment presents a promising opportunity for independent media agencies to thrive as a compelling alternative to the holding company model.  

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Exploring the Independent Media Agencies’ Model

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Brands are looking for more centralization (53%), flexibility (45%) and simplified services (37%) from their agencies, as reported by the World Federation of Advertisers.  

This shift indicates that holding companies are now contending with specialized independent agencies that are continuously evolving to meet client expectations.

Independent media agencies occupy a distinctive niche within the advertising industry.  

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Free from the constraints of a parent company, they are often perceived as more adaptable and nimbler.  

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Less than twenty years ago, independent agencies were just private versions of publicly owned or holding company-owned agencies.

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Today, independent media agencies have diverse types of business, specialization, and expertise.

This huge diversification allows them to compete with holding companies for different clients on various briefs.

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The key success factor for independent media agencies is combining growth and customer centeredness and finding the right number of accounts to manage without compromising the quality of their service.

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Uncontrolled scale can also lead to inefficient partnerships on several fronts:

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• Connections: As an agency grows larger, connectivity suffers; people’s attention and energy are limited resources.
• Accountability: Increased scale creates more places for people to hide; in 2024, accountability is essential, and hiding places are detrimental to agency health.
• Decision-making: Larger media agencies may incur in  slower decision-making processes due to their size and complex organizational structures.

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Reaching the right scale and dimension is something to achieve with the help of the right tools and technologies.

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Thanks to AI and automation, companies of all sizes can now access technologies and services that were once the exclusive domain of large corporations.  

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But how can technology support independent media agencies with scaling effectively?

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Improve Campaign Management Through Tasks’ Automation

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Media and advertising agencies often face a significant challenge: the lack of bandwidth to manage large, complex campaigns.

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Ambitious clients bring high expectations, demanding extensive campaigns that require substantial resources and time.

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The dynamic nature of the advertising industry also demands quick responses and adjustments, which can be particularly challenging on complex campaign set-ups.

To navigate this, agencies can focus on automating repetitive and mundane tasks leveraging using end-to-end ad operations platforms.

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This approach allows the agency to retain control over the campaign's vision while freeing up their team to focus on tasks that align better with their skills, ultimately improving efficiency and output quality.

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Boost Clients’ Trust Trough Extensive Reporting  

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The demand for transparency and concrete results from today's clients increases this challenge.

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Agencies that cannot deliver solid, data-backed insights face difficulties justifying ad spending, which can potentially strain client relationships.

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To remain competitive, integrating advanced analytics tools into the agency’s workflow is crucial.

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Agencies are continuously looking for time-saving tech solutions to deliver better results for clients. However, many ad tech solutions are complex and don't work well together, which can disrupt workflows and waste time in the reporting phase.

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The ideal tech stack should be easy to integrate and use, with features that automate tasks, provide real-time insights, and facilitate collaboration.

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When evaluating new tech solutions, agencies should prioritize interoperability to ensure all the different tools work seamlessly together, including consolidated reporting features. This will save time and money in the long term and improve collaboration among different teams within the agency.

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Retain Talent Trough Processes' Optimization

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The media industry has been profoundly affected by the Great Resignation, as employees increasingly demand better working conditions rather than merely higher pay.

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This issue, while not unique to agencies, is currently one of their most significant challenges in advertising.

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Advertising Resource Management technologies like MINT are built to streamline advertising operations and improve the quality of work of media professionals, improving efficiency and saving precious time for strategic activities.

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Enhance Clients’ Engagement Through Effective Collaboration Tools

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Agencies often face the intricate challenge of maintaining clear communication amidst multiple stakeholders.

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This complexity can lead to misunderstandings, errors, and delays, ultimately straining client relationships.  

To address this, agencies should implement clear communication and approval protocols and utilize collaboration tools to streamline communication and account management.

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By adopting these practices, agencies can navigate the complexities of stakeholder interactions and foster strong, transparent client relationships with the support of tailored and flexible technologies.

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Navigating New Dynamics in the Agencies' Landscape

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The traditional client-agency relationship is changing, with trust and responsiveness playing a pivotal role in this transformation.

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Independent agencies offer unique agility, positioning them well to meet the specific demands of clients.  

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But independent agencies are not only battling holding companies for talent and client spending: they are also contending with some of the most powerful organizations on the planet. Amazon recently launched its unified ad platform to compete with Facebook and Google's, showing how integrated technologies for advertising and full-service suites are more and more shaping the industry.

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Due to this fierce competition, advertising agencies are evolving independently and using various methods to increase profit.

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They might act as resellers, operate ad networks, manage services directly with clients, engage in cost-focused arbitrage, participate in asset trades, or produce content, all to maximize revenue while catering to client needs in a complex media landscape and connecting with different ad-tech vendors to succeed.

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Interested in knowing how we can support your growing media agency thanks to our 500+ integrations?  

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Discover more about our ARM for Agencies and get in touch.

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