Competition in the agency space is fierce

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It’s a fact: ad agency creatives are leaving the industry. This is one of the threats that agencies face. I wrote an entire blog about these issues last week. An article in the Argentinian newspaper La Nación, “Más allá de las agencias. Los creativos triunfan en empresas de tecnología(in Spanish) elaborates on the situation as well.

The timing for this article could not have been better in relation to our last blog about the threats facing the advertising agencies.  

The article in La Nacion develops a couple of the threats that I referred to in the post.  

The title itself translates as “Never mind the agencies: Creatives are winning in the tech companies” which highlights one of the big issues that the agencies face. Creatives are leaving them and going to the tech companies because they are a genuine threat to the agencies themselves.

I’ve often used Sir Martin’s term ‘frenemies’ to describe the social media platforms. However, I would argue that it’s more enemies than friends. Especially if they are taking creative talent themselves. Isn’t that the secret sauce that the agencies have? 

Creatives are leaving advertising agencies

How things have changed? Back when I left college in the 90’s, it was cool to work in advertising. I remember watching ads with one of my best friends, Tim, and trying to reverse engineer the client brief from the ad. That’s how eager Tim was to join an agency!

Fast forward 30 years. Graduates are going to great lengths to join the tech companies and not so much the agencies. Those that do join them do not stay that long. Quite frankly, who can blame them if given the challenges that I spoke about in the last blog and the archaic tools I referred to in the previous one 

And it’s not just the ‘tech’ companies as I have defined them. I would argue that it’s all businesses. More and more companies are creating in-house agencies and, according to The Drum, as much as 57% of multinationals have an in-house agency and this number is increasing which squeezes agencies further. I couldn’t help smiling when I noted that Facebook itself has its own in-house agency.  The social media platform uses “Creative X” for its internal brands.  

The La Nacion article was focused on the migration of ad agency creatives to the tech giants. However, it did not talk about the consulting firms, digital agencies, or the “man in the garage”. All of which have contributed to the much more competitive market for ad agencies.  

Agencies need to be lean and efficient to have any chance of surviving. I work a lot with agencies that are already using or implementing tools like WorkBook or ConceptShare so I sometimes forget that there are still a lot of agencies out there that don’t have the tools and processes and procedures in place to face these threats.  

The argument for not implementing these has always been it will kill the agency’s culture and creativity. If that is the case, then why are the creatives leaving the agencies and going to businesses that already have tools, processes, and procedures in place?   

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