The Hybrid Agency Tango: Frenemies and Agency-Led Alliance

Posted by Deltek Partner Guest Blog on August 18, 2020

Vanessa Edwards, CPI

Excerpts from The Hybrid Agency Tango with Vanessa Vollum Edwards

Welcome back to Part 2 of The Hybrid Agency Tango! In the first part of the series we talked about the evolution of in-house agencies (IHA) from 1.0 to 2.0, into what is colloquially termed “Hybrid”. We also covered the first element of the “Frenemies” tier on the Brand-Led track, including the Pros and Cons of that tier:

  • 1.0 - focused on cost, speed, control and media unbundling
  • 2.0 - focused on multi-channel complexity, MarTech, data security and 360° analytics
  • Hybrid - focused on evolving beyond “Frenemies” into Alliance, Integration & Co-location

hybrid agency pyramid

“Frenemies” Continued

As a quick reminder, the first thing you will notice is that the foundation of the Hybrid Pyramid is the “Frenemies” layer. The Frenemies level is not officially part of the Hybrid model; however, it is the foundation of Hybrid. It’s a symbiotic, yet competitive relationship, where both parties need each other, while simultaneously pursuing their own vested interests. 

We led with Full-Service AOR, and this post follows up with Lead AOR + Niche Agencies, and then Alliance (Agency-Led).  Enjoy!

Lead AOR + Niche Agencies

Let’s move onto a slightly better Frenemy scenario, where the Brand has a lead Agency of Record who likely brings some channel expertise and execution, but prides themselves on being a neutral party, willing to work with other niche subject matter expert Agencies.

While the Brand still owns marketing objectives, insights and managing the multitude of Agencies, the AOR Agency tends to own the MarCom strategy through creative development, working with specialty Agencies for media, digital or social channel strategies + executions.

One of the things that makes this model very effective is that you often get the best of both worlds. On one hand, the Brand now has access to a diverse pool of subject matter experts, while also maintaining the benefits of their AOR relationship. This means that the Brand will often get a better balance of advertising, content, channel strategy and channel execution. This is clearly a step in the right direction!

GENERAL FRAMEWORK:

  • BRAND owns Marketing Objectives + Insights
  • AOR owns Research and Consumer Knowledge
  • AOR owns MarCom Strategy and Planning
  • AOR owns Campaign Strategy and Planning
  • AOR owns Creative Concepting through Creative Development
  • AOR owns Channel Strategy and Execution for certain channels
  • NICHE Agency owns Channel Strategy, Creative Dev and Execution within their channel expertise
  • AOR or NICHE Agency owns Analytics + Reporting

PROS:

  • Can leverage subject matter expertise of Niche Agencies AND Lead AOR relationship
  • Better balance of advertising, content + channel execution
  • Marketing responsibility + accountability not all dependent upon one Agency
  • Brands gain access to a multitude of experts without hiring
  • Brands gain outside perspectives + cutting edge knowledge

CONS:

  • Lead AOR + Niche Agencies compete for dollars
  • Brands struggle to integrate Agencies on complex initiatives
  • Agencies often don’t understand the Brand well enough
  • High Agency turnover leading to loss of tribal knowledge
  • Brands pay for Agency’s inefficiencies
  • Brands spend lots of time managing + training Agencies
  • Slower turnaround time on Agency deliverables
  • Brands unable to access full circle analytics

 

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Agency-Led Alliance

Now let’s finally talk about the 1st real tier of Hybrid, something I call the Alliance tier. Why do I call it Alliance? Because Alliance is defined as “a union formed for mutual benefit,” which is exactly what this tier should be. Technically, I consider this the first true win-win relationship in the pyramid.

In this tier, the Brand recognizes that they need to bring specific channel strategy and execution in-house in areas that have been deemed critical to their future success (I often see this happening with content, digital media, social and email marketing). This can manifest itself with Brands hiring channel experts who can live and breathe the Brand day in and day out.

When Brands bring their priority channel strategy and execution in-house, they can more easily bridge the gap between Brand, consumer and industry knowledge and their channel strategy. In addition, it often benefits Brands to bring the creative development of their priority channels in-house to increase speed to market and create cost savings. What I like about this model is that the Brand and their Agency partner share in both marketing responsibility and accountability.

GENERAL FRAMEWORK:

  • BRAND owns Marketing Objectives + Insights
  • AGENCY owns Research and Consumer Knowledge
  • AGENCY owns MarCom Strategy and Planning
  • AGENCY owns Campaign Strategy and Planning
  • AGENCY owns Big Idea and Creative Concepting
  • AGENCY/BRAND own Creative Dev for specific channels
  • AGENCY/BRAND own specific Channel Strategy and Execution
  • AGENCY owns Analytics and Reporting

PROS:

  • Better alignment of the Brand within priority channels
  • Better balance of advertising, content + channel execution
  • Decreased turnaround times + costs for creative development
  • Marketing responsibility + accountability not all dependent upon Agencies
  • Brands gain access to a multitude of experts without hiring
  • Brands gain outside perspectives + cutting edge knowledge

CONS:

  • Split channel strategy/execution = more differing opinions
  • Agency loses control of quality + responsibility
  • Agencies often don’t understand the Brand well enough
  • High Agency turnover leading to loss of tribal knowledge
  • Brands pay for Agency’s inefficiencies
  • Brands spend lots of time managing + training Agencies
  • More difficult to project manage integrated campaigns
  • Brands unable to access full circle analytics

That’s a Wrap – For Now

Thank you for reading the 2nd blog in a larger series that focuses on the evolution from in-house to Hybrid! Our 3rd blog in the series will focus on the Agency-Led Integration track, before jumping over to the Brand Led track. Remember, at the end of the series, we will be discussing the Hybrid Magic Quadrant, which should provide some practical orientation for where you are today and where you may want to be in the future.

Additional Resources:

 

About the Author: Vanessa Vollum Edwards, President, CPI

For the last decade, Vanessa and her team have helped over a 100 organizations (Agency & In-House) through complex organizational change, adopt agency management software, embrace business intelligence and prepare for future growth.

 

 

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