PHD at Squared 2012: Agency structure

This is Part 3 of Holly, Akhra and Tim’s internal report. Read Part 1 and Part 2.

Operational: What structure do you think agencies will have to adapt to in order to succeed in the future?

In a broad sense this is can be viewed in two ways; in the future agencies will attempt to cover a wide range of advertising roles and functions to provide all the client communications needs; or will we see agencies developing even more specialised functions in order to differentiate themselves in a competitive market?

The advantages of specialisation seem fairly appealing, as you gain a clear position of choice for a client looking for that particular function. However you are then naturally limiting your potential pool of work to a fairly narrow window. Specialist agencies in this position also currently suffer some of the problems mentioned in the first question; namely if they need to make use of any services beyond their specific remit they end up paying more for an external service, as they ultimately pay for another company’s profit margin.

An agency with a broader scope of functions would ideally be able to deal with a client’s entire media/advertising requirements, making use of a full range of in-house departments working directly together to cover all functions. This is what full-service advertising agencies aim to do today. However the fact that full-service agencies exist, but are not ubiquitous, demonstrates how having several agencies with highly specialist functions can often produce greater individual results, as a function of their specific expertise. An agency with a broad range of specialist departments who work closely together is ideal, but arguably not entirely realistic as an industry standard, as such it is likely we will continue to see the current mix for a while yet.

Elements of structure that are likely to change are the way in which we organise our teams within the agency. Digital and the associated technology is getting more and more important and we need to account for this. In the future the lines between online and offline media will become far more blurred, and we will be able to track and collect a much broader range of data. This means that we will look to integrate a data and analytics focus across all teams, rather than having distinct ‘analyst’ or ‘digital’ roles.

Automation will also fundamentally change our structure, we can foresee more forms of media becoming automatically biddable (along the lines of adwords); which would remove the need for dedicated buyers, and creating more of a requirement for staff in planning and data interpretation. Implementation functions that are currently carried out manually will also be processed more automatically, again helping to free up man hours for planning and other tasks that require more expertise and thought.

To add another perspective, we can look at this question from a slightly different angle; the current pace of change is so quick and agencies need to be ready to react to opportunities. Agencies need to be flexible and adaptable and engender a culture of fluidity where people are prepared for change and embrace change. Agencies should never become complacent. PHD are already ahead of the game, they have recognised that they need to keep up with emerging trends and allocate resources as a result. e.g. we have a head of innovation at PHD whose job it is to spot trends and see where we can apply these to our clients businesses. She takes a bird’s eye view of the different planning teams and functions at PHD and looks out for where we can collaborate etc. At PHD we understand that it’s about attracting and keeping attention among our target consumers; if the work we do for our clients isn’t compelling enough, it won’t succeed.

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