U.K. Marketers Will Use Fewer Agencies by 2020, Report Says

'Too Risky' to Outsource Customer Relationships and Data

By Published on .

More than half of U.K. marketers expect to use fewer agencies in the future, according to a new report from MediaSense and the Incorporated Society of British Advertisers, the U.K.'s advertiser group.

The Media 2020 report, put together by advisory firm MediaSense with ISBA and Ipsos, is a survey of 200 senior marketers. It includes 30 in-depth interviews with participants from ISBA's executive committee – which counts Procter & Gamble, Nestlé, Kellogg, and Vodafone among its members.

Graham Brown
Graham Brown

Graham Brown, founding director of MediaSense, a media advisory firm that specializes in media performance and agency relationship management, said, "The areas that marketers are looking to bring in-house are around management of current and potential customers. Outsourcing customer relationships – and the accompanying data – is not something that marketers feel confident with."

The in-depth interviews revealed that, although some marketers said they find that outsourcing is the only way to deal with the complex set of different skills required, others – particularly the larger companies -- said they are prepared to invest in technology and data management, because it is too risky to allow third parties to manage customers and prospects.

"This is not the death knell for creative agencies," Mr. Brown said. "Media agencies don't have a creative culture and neither do management consultants. Creativity is still a valued mindset and the creative agency is still king. But increasingly, marketers require an agility which is not done well by creative agencies."

Nearly 60% of marketers surveyed said that they anticipate that content development will move in-house or go to alternative agencies within five years. "Lots of marketers say they value their creative agencies but they can't afford to get them to do SEO and social content," Mr. Brown said. "By 2020, creative agencies will have to be very different entities if they want to hang on to their status as trusted advisers. They have the opportunity to win, but they need to reduce costs."

The report also found that 73% of marketers said they expect to be contracting directly with media owners and technology companies by 2020. "If that isn't disintermediation, I don't know what is," Mr. Brown commented. "For clients it's about taking greater control."

According to the report, greater self-reliance, new agency models and performance-based remuneration are the top three priorities for CMOs as they prepare for the next decade; while data analytics, content development, and omni-channel planning are the top three disciplines they consider critical to success.

The report was compiled between March and July 2015, with respondents from a broad range of industry sectors including food, media, technology, insurance, retail banking, travel, pharmaceuticals, toys, transport, drinks and confectionery. Together they represent more than $1.5 billion in advertising investment.

Most Popular