Five agency-brand models will define 2020s, UK's IPA finds

The “titan” and “engineer” models are more likely to result in longer-term relationships between brand and agency, the report notes, as well as a harder set of measurement KPIs that are more closely linked to joint business-growth metrics. Meanwhile, the models on the right, “in-house” or “hybrid”, are likely to result in weaker KPIs linked to traditional areas of measurement, such as share of voice, or engagement for a specific short-term campaign.

The coronavirus pandemic is likely to amplify the polarisation of demand across either side of this axis, the report adds.

It explains: “[For] brands who operate with models towards the left side of the spectrum and whose commercial performance is heavily reliant on marketing efforts, there is a risk that moving towards a more in-house approach will be viewed as an unnecessary cause for upheaval at times of economic uncertainty. Conversely, the pressure on budgets presented by Covid-19 will have the opposite effect on other brands who seek to move more operations in-house as part of wider cost-cutting efforts.”

There is a polarised view of the role of the agency in addressing these changes, the report also reveals. Opinions differ particularly over whether a single agency should have the remit and capability to help brands in responding to their full range of challenges or whether they should provide focused and highly specialised services for one specific marketing function. 

Nigel Vaz, IPA president and global chief executive of Publicis Sapient, said: “This report comes at a pivotal moment for agencies and their clients and should give us all food for thought. For agencies, it affords an opportunity to consider which business model will best suit them and help their clients to identify and realise value. For clients, it acts as a guide to which of their agency partners can help, how and when.

“The report concludes – as many of us intrinsically know to be true – that, despite disruptive change, and sometimes because of it, there is an incredible opportunity ahead for agencies to become long-term and integral business partners to their clients, fundamental to their commercial success and sustainable growth.”

Vaz believes the ad industry needs to redefine itself in order to remain relevant to clients, and last year he set out his “Reimagine” presidential agenda to IPA members, which focuses on an agency's role, revenue and responsibility.

Eighteen “brand and agency experts” were interviewed between July and September to inform the relationship models section of the report.