The Covid Marketing Landscape is Lava:
Why going with a fractional AOR now might be right for you.
Justin Bajan | July 24, 2020
A new show came on Netflix during quarantine that took a popular kids’ pretend activity and made it way more intense and harder to complete. Floor is Lava. Contestants face an enclosed obstacle course featuring shaky pyramids, spinning beds, bouncy planets, secret keys, magical pizza pans— you name it. Oh and of course the “floor” isn’t solid ground. It’s lava!
The show isn’t that great, but nevertheless, it’s the perfect metaphor for marketing directors and CMO’s in this Covid-age. Except instead of lava, they have to get through a murky (ok, fiery) landscape brought on by an economic downturn and volatile market changes. And instead of wacky and unstable rocks/mummy tombs, their only two options to get through this mess are staying the course with their agencies of records (AORs) or trying the new(er) way: in-housing.
MAYBE STICKING WITH THE OLD RELIABLE IS THE BEST WAY TO GET THROUGH THIS?
Ah, AORs. As Michael Scott asked Toby, “Why are you the way you are?” Here’s why. Once they switched from the commission model to a fee-based approach, then got bought by holding companies, they had to do something to make their margins. Their solution?
Relentless pitching—which has become a race to the bottom as they increase their workloads to meet client demands while simultaneously lowering their fees to “win.” And when they do win, they inflate their headcounts and services provided per piece of business. Putting 6-7 creative teams on a TV campaign that would be just as good with one or two teams working on it. Giving clients account service out the wazoo: account coordinators, assistant account executives, regular account executives, senior account executives, account supervisors, account directors. For a salsa brand. Getting a couple “digital natives”, creative technologists, and a UX/XD guy with a soul patch…whatever he does….to make a splash page for a long-lasting gum...
OKAY, TELL ME ABOUT THIS NEW WAY...
In-housing. Everyone’s doing it. The ANA released a study in 2018 called “The Continued Rise of the In-House Agency,” that said 78% of members had an in-house agency, compared to 58% in 2013 and 42% in 2008. Supposedly your in-house team knows your brand better than your agency, plus they have to be more efficient—process and budget-wise. Right? Maybe.
Thing is, in-house agencies don't have the breadth of insights that AOR agencies can provide. Listen to Heidi Browning, CMO for the National Hockey League: “Agencies have broader performance insight because they manage all different types of campaigns... categories, and we don’t benefit from the knowledge that they glean from other categories, performance and strategies.”
So yeah, they might know your brand the best but the ideas you’re gonna see won’t exactly be the cream of the crop. Another reason why that’s the case: In-house agencies have a hard time attracting top-tier talent and keeping talent energized. Okay, but what about efficiency? Well if you look at that same study, 37% say their in-house agencies struggle with maintaining process discipline. Combine this with the fact that 42% of marketers are “unaware of what their in-house agency’s mission, purpose and/or objective is, and maybe this path doesn’t seem as sure-footed (trying to stay with this lava metaphor).
OOF. THERE’S GOTTA BE A BETTER WAY.
There is. It’s called a fractional AOR. They have some of the good things we mentioned earlier that you’d find in a great regular AOR: wide and varied experience and insights, big-time creative chops and A-level production company relationships.
But what you don’t have to worry about is being overcharged for unwieldy headcounts, overhead and gargantuan fees designed to make the holding companies happy. Plus, no account people (even though we’re friends with lots of them), who cost about 20% of your overall budget to babysit you. Instead, you get direct access to the strategist and creatives who are actually creating your work. Kinda like how you think it would be with an in-house group. Actual efficiency and minimal layers.
Speaking of in-house, your fractional AOR can provide you the same kind of budget friendliness because it doesn’t rely on a retainer-model to make margins. Or bring you loads of “proactive” work hoping to win awards while doing nothing for your bottom line.
What’s the catch? None. Your fractional AOR can pull this off because they don’t believe in pitching new business all year long—diagnosing your brand’s problems for free and then telling you it costs millions of dollars to fix it. They’re not beholden to a holding company who needs their 20%. They don’t have that soul-patch guy on staff. If they need to get a category expert that really understands your niche business, they freelance that person on. They don’t have hordes of underpaid juniors who snap at your brief like lobsters in a (lava) tank hoping to win a golden object. They’re a tight core of nimble advertising veterans who just want to make challenger brands fight back against the competition instead of wallowing like an also-ran.
OK COOL, SO WHERE ARE ALL THE FRACTIONAL AORs AT?
Well, there’s just one. Familiar Creatures. Since no one else was offering this, we had to invent it. It’s why we started. And we have the experience, expertise, energy and heck, courage, to help you survive and thrive during this recession/pandemic/budgetary Dumpster fire...I mean lava-filled marketing landscape...