Are Advertising Agencies Becoming “Vendor Zoned”?


‘Friendzone’ is described as the state of being friends with someone when you prefer a romantic relationship with them. Now, it seems that something similar is playing out in the relationships between clients and agencies.

Traditional advertising agencies are increasingly threatened with becoming vendor-zoned by clients and freelance writers, content creators, and creative small businesses. In such cases, clients bring in specialists and advertising agencies are given coordination and execution tasks, which significantly changes and diminishes client-agency relationships.

Advertising executives Storyboard spoke to said this trend is growing stronger day by day.

Famous publicist Howard Gossage once said, “No one reads the ad. People read what interests them, and sometimes it’s an advertisement. Gossage died over half a century ago, but his words are perhaps more relevant today than ever. Make people want to watch, talk, and share.

Read also:

A popular freelance writer who has worked with several big brands tells Storyboard, on condition of anonymity, that the main creative agencies haven’t transformed. “They still haven’t left the TVC world,” he said, adding that it’s “the age of content” whether it’s for the big or the small screen. “It needs a certain style and a certain tone. Creative department stores have yet to do this. This is cracked content that will collect visible likes, shares and comments, and which will enter trending charts.

The elephant in the room

In truth, agencies that come dangerously close to the seller’s zone are the result of a lot of things. Problems that have been brewing for a long time and which have put the legacy agencies in a difficult position. The growing digital reliance of brands is the last nail in the coffin, says advertising veteran Meenakshi Menon, entrepreneur and founder of Spatial Access. According to her, media agencies were more interested in technology than creative agencies. The problem arose when creative agencies were unwilling to claim benefits while lowering their fixed costs.

“It has become a win-win for customers. Lower costs at even lower costs. That’s why they (the agencies) started looking for income elsewhere. Unrealistic margins on film production. Huge bribes on events. Unreasonable commissions on celebrities. All of those back-to-wall tactics backfired and the creative agency ended up wasting their relevance because their creative product slipped, ”she adds.

According to several agency insiders Storyboard spoke to, many freelance writers and small stores take a third of what an agency of a network company charges. You can advertise, from script and production to post-production, for under Rs 20 lakhs, said the head of a Mumbai-based content company.

But not all content builds brands

Naresh Gupta, co-founder and chief strategy officer of Bang In The Middle, believes this practice is important in certain categories of brands, including startups, because they pursue a different business metric. He points out that the traditional agency model comes into play when the brand wants to conduct in-depth strategic thinking.

“New age businesses are looking for numbers that most agencies won’t get because agency resources aren’t trained for them. They are trained in the creative impact of consumers and in driving behavior, ”notes Gupta.

In a recent case, a unicorn startup had a team of bespoke writers work on their hugely popular campaign with a traditional lead agency. However, branding experts and advertising executives were a divided house, with many wondering what she’s doing for the brand?

Gupta says, “Most startups don’t think they need long-term brand thinking and they are considering short-term, conversation-driven thinking. They don’t wear campaigns for a long time. In my opinion, it is not sustainable because companies are not built like that, but it is like that, ”he laments.

The enigma of talents

The creative advertising community believes there is a talent gap, even on the brand side. Former advertising executive and former co-founder of The Social Street marketing communications agency, Pratap Bose, believes that the quality of clients (in terms of stature), especially at the level of the brand manager and the new CMO, is drastically down.

“They come with little experience, don’t understand the full range of communication, and see us as salespeople. They don’t have that historical reference. Gone are the days of good and long partnerships. When I was at Ogilvy, Vodafone, Cadbury, Unilever and Asian Paints, customer relationships lasted 20 years or more and it continues today, but they are rare, ”he notes.

On the other hand, Tarun Singh Chauhan, Partner, TSC Consulting, believes the agency side of the business needs to do a better job of retaining “experienced” talent. Here is why: “Today, there is a lack of quality exchanges with clients on the agency side of the world. Gone are the days when the agency met with senior management to develop marketing plan strategies.

Chauhan equates the Indian advertising industry with a BPO setup. “This happens because clients pay agencies not for the value they provide, but for the number of people on the account.”

A counter-view

Leaders of the mainline companies believe that despite the business challenges, agencies continue to create work that is a sign of exemplary partnership that creates tremendous value for clients.

Suraja Kishore, CEO of BBDO India, shares the example of the agency’s partnership with Sharat Verma, Marketing Director and Vice President, Fabric Care, P&G India, and his team. BBDO India, the original idea for Airel’s #ShareTheLoad campaign, started working on the account in 2015. Since then, the brand and agency have not only received several accolades for the campaign, but have also created a sort of social movement. Kishore says the relationship is based on a “shared radical belief”.

He further tells Storyboard that the rise of boutique agencies and freelance writers is one of the best things that has happened to the industry. “The emergence of the multimedia landscape offers endless opportunities to connect with consumers, so we need more people who are passionate about creating value for brands and businesses through their ideas and imaginations,” adds- he does.

The silver lining

To some extent, the Covid-19 pandemic has helped bring agencies and clients closer together.

Kapil Arora, co-chairman and CEO of 82.5 Communications, an Ogilvy group company, points out that the past two years have had some kind of cathartic effect in even the most transactional agency-client relationships.

“Conversations have reverted to business, not just the brand or the next brief. Depth and partnership are both sought after and delivered. In fact, in these locking trenches, partnerships have only grown stronger, ”adds Arora.

In fact, in these times of great unpredictability, clients are looking for deeper partnerships and greater support from partner agencies to find new ways to connect with consumers, says Rohit Ohri, CEO of FCB Group. India. He adds, “Many clients rely on the global agency network to gain insight, understand global markets and consumer behavior,” which goes a long way in cementing healthy relationships that help grow brands and businesses. . The FCB group has maintained partnerships with clients such as ITC, Nerolac, Amul and Zodiac for more than ten years.

Never lose a fit, they say. And the pandemic appears to have helped shed light on the value of strong partnerships for some agencies.

But will this move agencies away from the supplier area in the future?


About Author

Comments are closed.