Are AOR days numbered?

15 Dec

When Island Savings told us recently that they would be terminating our contract and outsourcing their work to a variety of smaller outfits – it signaled the end of an era. Island Savings was our last true Agency of Record account.

Over the past few years, the trend away from AOR relationships has significantly changed how agencies do business. Clients look increasingly for value and split their work to leverage more competitive pricing and greater degrees of specialization.

It’s not at all unusual for a client to have their media buying with one agency, their above-the-line strategy and creative with another, their social media and web work somewhere else. Throw in a PR company and a graphic design shop or two to handle labour-intensive jobs like catalogues and special events, and its a bit like squeezing people into a Volkswagen.

And therein lies the problem. Whereas previously an AOR would be the brand watchdog, guiding it through its various strategic thrusts and media forays, in the new model the client is often left holding the bag and trying to keep all the marketing partners on brand. It can be quite a juggling act.

True enough, many smaller agencies are moving towards increased specialization, because they simply can’t compete as generalist agencies with the big boys. But as they do so, they are forming strategic alliances of their own to bring new skill sets to their offering, and to position themselves to once again be the champions of the brand.

My guess is that AOR relationships will make a comeback as clients realize that the alliance-based, one-stop shops forming today give them the very things they walked off in search of.

Then the whole will again become greater than the sum of the parts.

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5 Responses to “Are AOR days numbered?”

  1. Bill W Sr. December 15, 2009 at 12:50 pm #

    This profession of ours , to me, reminds me of the Hindu Wheel…ever turning to eventually repeat the same events and changes that have happened before…many times. In my view, it’s all about people-chemistry. Some client relationships turn into lasting friendships. It’s up to us to develop thoes kinds of of relationships.

  2. Mike Fromowitz January 15, 2010 at 2:47 pm #

    Absolutely correct Doug. And this will lead to the decline of ‘brands’ as we know them–because most marketing directors these days know squat about true branding. So too the many ‘up and coming’ digital shops. And where’s the branding on corporate websites… duh?

  3. dougbrowncreative January 15, 2010 at 5:35 pm #

    Mike it’s great to have a comment from you on our blog! (For those of you who don’t know Mike Fromowitz, he is one of the legendary admen that got me going in this business..circa 1980’s Ball Partnership, Hong Kong.)
    Regarding your comment Mike, I am optimistic that clients will see the importance of having a strong brand and will invest in keeping it strong. It’s up to us to continue to make the case. Brand advertising will continue to thrive despite the increased measurability of digital media, because mainstream media will resist invasive monitoring.
    Wait, I feel a blog post coming on….

  4. mike July 27, 2010 at 3:30 pm #

    Doug
    I’m coming out your way some time in September–be gon.
    mike

Trackbacks/Pingbacks

  1. What will agency AOR relationships look like in 2010 and how does it affect new business strategy? – Agency New Business - April 10, 2011

    […] Which leads me to agency new business and how this current trend away from AOR relationships should be confronted: Bill is right in the comment above, it is about relationships, and in order to make your new business strategy effective, you’ve got to start the relationship at the very first point of contact. If the current trend is project work, embrace that trend. Per our mantra here at RSW/US-when you first reach out to a prospect, don’t shove the agency down their throat, instead, have a peer-to-peer conversation. Yes, that’s tough to do immediately out of the gate, but it is a process and don’t be discouraged by that fact. Over time (and it does go quickly) you have to develop a rapport by providing something of value to the prospect and consistently showing your category understanding. Develop the relationship with your future clients from day one and create that personal stake in the relationship. It will be that much harder for the client to walk away after one project. Copeland Communication’s Are AOR Days Numbered post here. […]

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