Brands to sideline agencies in a bid to become more customer-centric

Brands are planning to take more capabilities in-house as customer centricity and exerting tighter control become increasingly important, according to new research.

The survey, conducted among 200 senior marketers by MediaSense in association with ISBA and Ipsos Connect, saw a majority of respondents indicate the desire to manage customer relationships and data more separate from agencies.

Over half (54%) of respondents said they expect to bring a number of functions previously outsourced to agencies in-house by 2020, while 58% agreed that the number of agencies they work with will likely decline over the next five years.

Agencies aren’t agile enough

The widening gap between clients and agencies isn’t a surprise, Debbie Morrison, ISBA’s director of consultancy and best practice, told Marketing Week.

“The entire industry is in a state of flux. Marketers are questioning every aspect of how they operate and what type of agencies they use,” she said.

“Brands are bringing more tasks in-house, as they feel closer to the consumer.”

Creative agencies seem to be in particular trouble. While eight out of ten marketers believe that creative agencies will remain the best for big creative ideas, nearly 60% anticipate that content development functions will move in-house or to alternative agencies within five years.

“Some of the legacy agencies simply aren’t agile enough and will need to keep up. Brands are certainly willing to pay for this,” she said.

While nine out of ten respondents are comfortable that media agencies will remain the go-to people for paid media, 73% of marketers said they will more frequently work directly with media owners and technology companies by 2020.

Additionally, marketers are increasingly focused on transparency.

“Media agencies are morphing from buyers to sellers, and now they are resellers. In response, many marketers are worried about agency neutrality,” she said.

Hiring the right talent takes priority

The disciplines marketers deem to be most critical to success over the next five years are data analytics and insight (67%), content development (50%) and omni-channel planning (43%).

“The report shows that marketers are increasingly focused on hiring the right talent. They are in need of people who are much more analytically savvy, as they need to be able to analyse data themselves,” Morrison added.

When marketers were asked to rank their most important challenges over the next five years, measuring performance was the top priority, with 65% of marketers taking a closer look at outcome-based KPIs and media investment.

Morrison concluded: “It’s a very difficult time for a brands, as change is happening on a mass scale. The report suggests this will continue for the next 5 years. Some brands might think they have landed a structure, but they will need to think again.”

Hide Comments1 Show Comment
  • S I Bouvet 11 Sep 2015 at 11:58 am

    This makes for disappointing reading, but on reflection it is because it is a one-sided argument. Agencies bring so much to the table and can support in house marketing teams with specific skills and fresh thinking and they can be entirely objective. Without doubt you need to choose the right agency with the right skill set, but to suggest marketers needs to take a closer look at ‘outcome KPIs’ is just laughable.As a professional marketer myself, KPIs and accountability has always been a pre-requisite of being a marketer. I have worked both agency and client side and have always enjoyed a collaborative working relationship that has proved invaluable in helping the companies I have worked for achieve their KPIs. Let’s see some more weighted reporting please that is in context and looks at the wider picture

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