Agency rosters on the rise—why marketers are enlisting more shops

Many marketers are widening their agency benches to better manage a laundry list of growing needs. In June, General Motors brought on several shops, including holding company agencies and multiple independents. Kellanova and Kenvue have recently added to their lineups, with the latter now seeking multiple influencer agencies. And, in early September, KFC removed MullenLowe as its lead U.S. agency, implementing a roster model for its stateside creative business instead. While enlisting a broad range of agencies isn’t a new concept, this strategy runs counter to what has played out in recent years, with many brands opting for a bespoke solution within a single holding company following a review. There are various reasons behind the shift, according to multiple consultants and analysts interviewed by Ad Age. For one, marketers are looking for more niche solutions, leading them to seek out and add specialist shops. A roster also allows brands to have more control over the marketing process by deploying agencies on an ad-hoc basis—a strategy some experts say prevents agencies from getting complacent. And while rosters are typically used for the creative business, brands are experimenting with broadening their agency choices in new areas, too. “We’re seeing a lot more roster solutions, especially on the creative side … But we are actually seeing that in media as well,” said Andrea Kerr Redniss, a managing director at MediaLink, adding that it’s not uncommon for a global marketer to now have around 100 agencies. Agency Review Tracker Stay up to date with the latest account reviews Click here More flexibility and control Brands are adopting agency rosters because it allows them to pick and choose from multiple different creative outlets as needed. “The drive is not just coming from the sake of diversifying the roster,” said Greg Paull, principal of consultancy R3. “It’s coming from the need to drive greater creative thinking, and most marketers are finding that a flexible roster is kind of critical to that.” While there will always be marketers that prefer to consolidate under a single holding company, such as Coca-Cola (WPP), more marketers are now willing to invest in multiple agencies that can provide “brand ideas on a more ad-hoc basis,” Paull added. Also read: Stellantis launches review for multiple brands GM hired four new creative agencies—independents Mother and Preacher, as well as Stagwell’s Anomaly and 72andSunny. Each is assigned a single brand; Anomaly has Chevy, for instance. They are all working with S4 Capital’s Monks, which is charged with taking the content produced by the creative shops to pump out personalized advertising, sometimes using AI to make tweaks (such as adding snow to a piece of work when the context might call for it). “Our agency model is one of specialists now,” GM Global Chief Transformation Officer Molly Peck said at Ad Age’s Business of Brands conference last week. “It gives us a lot of flexibility and a lot of expertise.” She described Monks as the “foundational partner” that works “cross-brand.” “They are a production powerhouse using technology to be prolific, to be fast, to produce at scale in a hyper-personalized way. And it is a new way of doing business,” she added. Kellanova, which recently hired multiple agencies including the indie Tombras, also cited flexibility when describing its decision. “Our portfolio of brands is diverse, and this agency model allows us to match the unique needs of each brand with the right creative talent, ensuring more tailored and impactful consumer experiences,” the company said in a statement to Ad Age. KFC and Kenvue could not be reached for comment on the strategy behind their agency rosters. Having a roster of agencies also allows marketers to hedge their bets, said Tom Denford, CEO and co-founder of consultancy ID Comms. “That’s a very intentional part of the thinking as well,” Denford said. “There’s a risk that comes with having all your eggs in one basket—the agency could get a bit stale … You always want a bit of grit in the mix. It’s always quite good to do that.” When holding company agencies consolidate to service a brand, the client can sometimes lose ownership of the process, Denford added. “If you’ve got one group that’s doing all these things, suddenly they’re much smarter about your brand and marketing than you are,” he said. “We’ve had some big clients who’ve found that … they almost can’t get things done without the agency's permission.” A-List & Creativity Awards Enter for a chance to be recognized as the best in advertising Submit your entry here Demand for specialists Brands’ increasingly robust in-house capabilities are also contributing to an increase in agency roster models, according to MediaLink’s Kerr Redniss. Now, for example, many brands have a dedicated social executive—and their needs may require multiple specialist shops rather than one generalist agency. “You need so many different pieces of content that can fit across all different channels, and it’s very hard to find that capability in one place right now,” said Lindsey Slaby, founder of brand consultancy Sunday Dinner. “Now, [brands] have to hire a lot of different partners to satisfy the needs of what it takes to build out a modern marketing playbook.” Holding companies have been snapping up specialists to meet clients’ diverse needs. In the past three months, Publicis Groupe has acquired Mars United Commerce, the world’s largest independent commerce marketing company, and Influential, the world’s largest influencer agency by revenue. In July, Stagwell bought Israel-based influencer marketing shop Leaders. Marketers are not only looking to these specialists for execution but also to help weigh in on their business problems, said Nick Primola, group executive VP, Global CMO Growth Council at the Association of National Advertisers. “I think the nature of [specialists] has been elevated in terms of their importance to the actual decision-making of the CMO,” Primola said. What marketers and agencies should know Agency roster models are typically less cost-efficient for marketers, though pricing varies based on the specific structure, according to several consultants interviewed by Ad Age. Some marketers tie their agencies to specific brands and pay them on retainer, while others periodically hand out assignments to agencies on their roster based on fit. Even the latter can be costly, as marketers need to keep assigning work to keep agencies motivated, and project fees can exceed what could be negotiated on an annual basis. But while rosters may be more expensive than a consolidation play, the increased performance helps justify the price difference, said Kerr Redniss. “We do these analyses all the time,” she said. “It’s like, okay, it’s going to cost X amount more, but are we what are we going see as far as performance [is] going to offset that.” Roster models also place more responsibility on the marketer. “Whoever is managing those agencies [has] got to be prepared for a little headache,” Denford said, adding that brands will have to spend time “refereeing” between shops. “You’ve got to have a very good agency management system in place. Otherwise, as a CMO, you're going to be pulled left, right and center by everyone constantly nagging you for more scope.” A-List & Creativity Awards Enter for a chance to be recognized as the best in advertising Submit your entry here Agencies need to prepare themselves, too. An uptick in rosters means shops have to better structure themselves to take on project work—working more with freelancers that can make themselves available on short notice, said Paull. “We’ve seen this trend before in places like Japan, where half of agencies’ creative departments are freelance,” said Paull. “I think that’s a model more U.S. agencies are going to have to look at.” In some roster models, agencies have to compete against one another to win assignments each time they arise—a “jump ball” formula that has drawn the ire of some executives. “From a business perspective, you’re never establishing stability. It’s hard to forecast what you’re going to be doing for that company in that year,” said one agency CEO speaking on the condition of anonymity, urging shops to seek clarity at the beginning of the review. “It’s a pretty unfair scenario, and it will work as long as agencies are willing to do it.” Contributing: Brian Bonilla and E.J. Schultz

Agency rosters on the rise—why marketers are enlisting more shops

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