Marketing leaders shift organizational design to focus on in-house strategy with agency execution.
Marketers operate in a wilderness of new regulations, market dynamics and even operating models. Marketing leaders clearly understand that to survive and succeed in this environment of constant change they need the support of talented agency partners. That clarity quickly evaporates, however, when leaders grapple with the details of architecting an optimal mix of internal resources and external partners. That’s one reason organizational design questions are one of the fastest growing inquiry topics with Gartner analysts, said Chris Ross, Gartner research director in his session at the 2018 Gartner Digital Marketing Conference in San Diego.
Marketers are tired of writing blank checks and are looking for more tangible exchange of value
Questions on the right agency model abound: Do we have too many? Too few? What personnel should we bring in house? Are we using agencies for the right work? Despite these questions, marketers need to create the model that’s right for them. “Universally, marketers want to be smart about their agency strategy,” said Ross.
Money flows to agencies of all shapes and sizes because the work still needs to get done. According to the 2017-2018 Gartner CMO Spend Survey, marketing leaders allocate 25% of their budgets to services. In this climate, the nature of how organizations work with their agency partners is poised to change.
Marketing leaders expressed a desire to shift their models to one more reliant on partners for execution and bring more strategy development in house. To make that vision a reality, marketers need to explore five organizational design criteria to build the right model for their organizations.
- Competitive advantage. One of the most important questions to ask: Which activities and capabilities provide your brand with unique competitive advantage? “Take account-based marketing as an example,” said Ross. “That’s not easy to do and knowing how to do it internally could provide good competitive advantage.” Be mindful of what to keep internal and what to outsource.
- Task or person. Understand if you are seeking a person or if you just need a task completed. If it’s just a task that needs to get done, outside support may be a wiser choice due to the flexibility and speed of execution.
- Commitment. “This is a really big one,” Ross said. “The commitment to recruiting and retention is often overlooked by many marketers.” If a firm wants to bolster their data and analytics capabilities and hires a rockstar data scientist without committing to the larger hiring, training and development effort needed to support that role then the results will be sub-optimal. The employee may even leave for an employer who is committed to their development.
- Duration. If the task, project or need is short term, it might be better to use an external agency. Ross shared that the most valuable engagement model reported by Gartner clients was the 3 to 12 month “workhorse” engagement that includes clearly defined deliverables and time guardrails.
- Fit. Cultural fit between agency and organization is critical. When there is a good match, new models can flourish such as the hybrid approach where agency staff are onsite and embedded at the client organization.
Regardless of model, approach or need, at a foundational level the key is to be clear with yourself and with your agency partners. Tell them what problem you need solved and be clear about it. “Marketers are tired of writing blank checks and are looking for more tangible exchange of value,” said Ross.
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