‘Agency’ is the ad industry’s latest dirty word—why creative shops are relabeling

In a bid to distance themselves from the traditional agency model—which is often bogged down by overhead, talent costs and time-based compensation—many shops are ditching the agency label and rebranding as consultancies, marketing accelerators or creative solutions companies. This isn’t the first time agencies have reevaluated their nomenclature. In 2011, Ad Age published a story about how “agency” had become a bad word, fueled in part by acquisitive interest shifting away from services businesses. As a result, many companies decided to bill themselves as a “studio” or an “ideas company.” Some executives attribute the recent shift to the baggage “agency” has accumulated over time. Steve Stoute, CEO and founder of Translation, said a proliferation of new shops, many of which are fixated on billing and require multiple people to solve one problem, has caused clients to view agencies as expenses rather than strategic investments. Check out the latest Ad Age events and award programs “As the industry got populated with mediocre agencies, they tarnished the category,” said Stoute, adding that it only takes two people and one client to open an agency these days. “The whole thing has become homogenized from what it once was.” Some people Ad Age spoke with said many marketers want to shift to different pricing models based on deliverables, versus those associated with traditional agencies that are based on overhead and billable hours. Agencies, meanwhile, want to touch different parts of the business and start a relationship at a higher-level strategic, problem-solving level. This has led to many new shops to brand themselves as consultancies, according to Simone Oppenheimer Mandel, co-founder of marketing growth consultancy NBZ Partners. “A lot of agencies are desperate to call themselves anything but an agency to try to seem different,” said NBZ Partners Co-Founder Rachel Segall. What’s the difference? Some shops are rebranding because they claim to offer more services than a traditional agency does. Take, for instance, New York creative company Madwell, which changed its website last June to explicitly state, “We’re not an agency.” While Madwell still makes ads, it wants to be known as a “creative solutions and innovation company” because of its various different business verticals, including a record label, production studio, licensing company and one that makes products. “What I’d like to be is a company that doesn’t make stuff people don’t go back to enjoy. We [as an industry] have the budgets and the propensity to make stuff that is on par with streaming, full albums, and more,” said Chris Sojka, founder and chief creative officer of Madwell. “We have the budget to do that institutionally as advertising agencies, but we make stuff for a campaign. It’s semi-transient, and it stays in the portfolios of our industry. But people aren’t like, ‘Oh, man, I’m gonna go back and watch a bunch of commercials.’” Also read: Mystery experts offer up speedy campaign ideas Schaaf, a creative consultancy that opened its doors in February, focuses on solving business problems through strategy and helping companies with areas such as product design and brand experience. Schaaf doesn’t intend to exceed 30 or 40 employees at any given time so that its executives can be a genuine part of the work, Dylan Neuhaus, director of brand partnerships, told Ad Age when it launched. Kendra Schaaf, founder and CEO, said in an email that Schaaf can “plug in and plug out” wherever clients need it—offering both upstream marketing consultancy and more traditional production services. See all of Ad Age’s 2024 Creativity Award winners here “The entry point in which we engage with brands can look different from one brand to the next,” Schaaf said. “This is a company that was built with the understanding that we are going to be experimental … and [with] the understanding that we can’t have hard and fast rules about what a brand needs and what they don’t.” Also read: Multiple new ad agencies are opening A few executives who spoke with Ad Age said changing their shop’s title hasn’t necessarily changed billing. Asked about whether he’s been able to negotiate different pricing terms by calling Translation a creative solutions company, Stoute said he couldn’t “say that as a universal truth,” because “procurement is [still] dominant at these companies.” Addressing the pitfalls Not everyone is abandoning the agency label. Some creative shops pointed to the root of the word—agent—to justify its usage. “We are agents for brands and our clients,” said Jerry Bodrie, co-CEO, managing director at creative agency Baldwin&. “I think there are times when agencies can step over the line and start to think about their own business first and the client’s business second. It becomes a little self-serving.” Other executives noted that, by changing their descriptors, agencies may inadvertently be making it harder for prospective clients to find them—especially from a search engine optimization perspective, where they may miss out to competitors. “[It’s] like when you go into a grocery store, what aisle of the store am I supposed to be in? Calling yourself the anti-agency model doesn’t tell a person where to shop for you or where to find you in a bigger grocery store,” said NBZ Partners’ Segall. “Think about the milk aisle. Oat milk isn’t really dairy, but it still lives next to milk because you want people to know that that’s where you go [to find it].” Some marketers aren’t even concerned with all the bells and whistles. Stephanie McCarty, chief marketing officer at homebuilder Taylor Morrison, who started a lively debate on LinkedIn recently over the agency model she cited as “broken,” told Ad Age she “doesn’t care” how agencies style themselves as long as they’re producing robust creative work and willing to adapt to clients’ varying structures and needs. “Don’t give me all the other stuff you say you can do,” said McCarty. “We want the big [creative] ideas.” Determining whether a shop is an independent consultancy or an agency in disguise is easier said than done but, in some cases, marketers simply have to follow their instincts. “If it smells like an agency and it talks like an agency, it is an agency,” said Marla Kaplowitz, president and CEO of the 4A’s. Contributing: Lindsay Rittenhouse and Brian Bonilla

‘Agency’ is the ad industry’s latest dirty word—why creative shops are relabeling

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