When Island Savings told us recently that they would be terminating our contract and outsourcing their work to a variety of smaller outfits – it signaled the end of an era. Island Savings was our last true Agency of Record account.
Over the past few years, the trend away from AOR relationships has significantly changed how agencies do business. Clients look increasingly for value and split their work to leverage more competitive pricing and greater degrees of specialization.
It’s not at all unusual for a client to have their media buying with one agency, their above-the-line strategy and creative with another, their social media and web work somewhere else. Throw in a PR company and a graphic design shop or two to handle labour-intensive jobs like catalogues and special events, and its a bit like squeezing people into a Volkswagen.
And therein lies the problem. Whereas previously an AOR would be the brand watchdog, guiding it through its various strategic thrusts and media forays, in the new model the client is often left holding the bag and trying to keep all the marketing partners on brand. It can be quite a juggling act.
True enough, many smaller agencies are moving towards increased specialization, because they simply can’t compete as generalist agencies with the big boys. But as they do so, they are forming strategic alliances of their own to bring new skill sets to their offering, and to position themselves to once again be the champions of the brand.
My guess is that AOR relationships will make a comeback as clients realize that the alliance-based, one-stop shops forming today give them the very things they walked off in search of.
Then the whole will again become greater than the sum of the parts.