Opinion: Ready together: 3 ways the brand-agency partnership can drive growth in 2021
In 2020, healthcare, economic and social crises disrupted all of our plans, prompting brands and agencies to revisit their relationships. Those that worked together, focusing on resilience and transformation, weathered the storm and came out stronger.
This past year, agencies achieved tremendous client satisfaction by leaning into areas where brands critically needed support. In a world that remains uncertain, there’s a huge opportunity for brands and agencies to come together to be ready for the year ahead.
To explore this evolving dynamic, 4A's partnered with Google on a new study conducted by Forrester Consulting.
The findings are clear: As we enter another fast-paced year, strong brand-agency partnerships will be instrumental to driving growth and preparing for whatever’s next. Here are some of the key ways agencies can become exceptional strategic partners, in 2021 and beyond:
Some agencies are skeptical of automated solutions, but our study shows that brands are increasingly looking for agencies to inform their automation strategy and vision. A staggering 86% of brands say they're not very effective at leveraging technology to automate aspects of their marketing, and only one in three have connected automation to growing revenue.
Adopting automation can be game-changing for several reasons. It enhances brand-agency agility to respond to consumer demand in real time, optimizes campaigns, and improves performance—all of which are increasingly critical as behaviors shift and the path-to-purchase continues to become less linear. More importantly, it frees up time and resources for agencies to focus on the strategic, high-value work and data-driven best practices that deliver the greatest value for their partners.
Automation isn’t a cost-cutting exercise, but an opportunity for growth. Right now, brands should empower their agencies to co-develop a vision for automation so that together they can meet consumers in the moment and get ahead of the curve.
Evolve and expand services
Brands are looking for support across the board. For creative services and content production alone, they expect to increase agency work by more than 20% in the next three years. To meet these growing needs, agencies should not only strengthen their current offerings, but consider delivering completely new services as well.
In addition to increased creative resources, agencies should invest further in their insight curation and measurement capabilities. According to our research, nearly half of brands find it challenging to effectively use customer data; one in three find it challenging to make their insights actionable; and 46% say their inability to measure ROI from marketing initiatives is a top challenge. Agencies can help brands uplevel this skill set, get closer to their customers, and drive business outcomes. Now’s the time to expand or implement data management, analytics and measurement solutions.
In providing new services, take e-commerce, for example: The events of last year drove explosive growth in online shopping, and brands are looking for expanded capabilities to support this increasing consumer preference. The deprecation of third-party cookies and shifts in consumer privacy regulations has led nearly half of brands to reduce their dependence on technologies that use third-party data, and they’re eager for new ideas to deliver personalization at scale. Savvy, forward-looking agencies have already begun investing in or acquiring new first-party data solutions to provide brands with a single view of the customer. In practice, this allows brand-agency partners to work together to understand audiences, identify value, and, crucially, create better customer experiences.
Reimagine compensation models
Brands and agencies are rethinking the agency economic model, from paying for people to paying for platforms and performance. This shift reflects the increased focus on driving business outcomes coupled with the ongoing struggle for brands to measure ROI. Another recent Forrester Consulting study showed that 51% of brand decision makers will prioritize and select future agencies with a track record of helping clients achieve growth, compared to 33% pre-pandemic.
While the most frequently used compensation models are still retainer and project-based, both brands and agencies anticipate this changing significantly over the next three years, towards licensing and performance-based options. By working together to develop new, non-traditional compensation models, brands and agencies can strategically align on what works for both of them, presenting greater value and long-term sustainability.
It’s clear that brands need strategic agency partners now more than ever to help them keep pace with the rapid acceleration of digital. While agencies should look to develop expertise, invest in tech, and upskill talent, brands can empower them by sharing first-party data and bringing them into strategic conversations sooner. This will help both brand and agency partners be ready, together, for whatever 2021 has in store.