In a recent AdWeek article, Wunderman reveals their newest way to circumvent the growing movement for marketers to bring agency services in-house:

Create an agency that can work inside the four walls of their client’s business.

agency in-house

Here’s what I see wrong with the Wunderman model and the entire concept of agencies getting into the business of building agencies inside client compounds:

  1. Agency-Client relations most often, eventually break down.  So if the agency is representing you for bigger assignments as an AOR, and you have some of the same agency’s people working inside your four walls, what happens to those people if the bigger relationship breaks down.  They go too?  You hire them?  Think they want to be hired by your company?
  2. Agency people want to work for agencies, not companies.  Nothing worse (no offense meant) than getting that job of a lifetime at DDB, and then suddenly get the rug pulled out from under you and you’re asked to go work for a staid, conservative client.  Some fun that would be for that agency person!  And what does that mean for your business – having folks inside that don’t necessarily want to be there?
  3. Is this really a more cost efficient way to go?  In our latest survey report, marketers told us that much of what they are moving in-house is low level stuff, so is bringing in a big agency’s team with a big agency overhead, really the best way for you, the marketer, to go?

In the end, I suspect this move does not come out of the kindness of Wunderman’s heart – them trying to do what is best for their clients – but rather what they need to do because big agencies like theirs are seeing marked-up services go by the way of the move in-house.

out house

From the AdWeek article:

The move comes just a few weeks after WPP, Wunderman’s parent and the world’s largest advertising holding company, reported a weaker-than-expected 2017, leading its stock to suffer its worst drop in nearly two decades (14 percent). At the time CEO Martin Sorrell blamed the disappointing year on big-spender clients like P&G cutting their budgets and others “increasingly in-housing their activities.”

What I really think these big agencies need to do – what the smaller and mid-size agencies have already figured out – is they need to change the way they look at new client engagements.  No longer are the days of full-on AOR relationships the norm.

Today, more and more marketers are using project work to “sample” agencies.  It’s tough for the “big boys” to manage a heavy overhead business with just project opportunities.  Small and mid-size agencies get it and can adapt.

So what does this all mean for you, the marketer?

If you’re going to bring work in-house, bring work in-house.  If an agency is so dependent on managing the tactical things you can just as easily do on your own, then they might not even be worth keeping them on the roster.  You want “thinker and do’er agencies” and not “taker agencies”.

Keep the big stuff outside as this is where the big ideas and creative solutions will come from.  And use an agency that can operate flexibly and be nimble when it comes to taking on responsibilities you send their way.

If you haven’t considered looking at new agencies, it might be worth a fresh set eyes or an extra set of hands to help you get the job done.