4As data reveals indie agencies think they need a rebrand

In a survey of 113 members skewed toward independent shops, the trade association found agencies see rebranding and repositioning around relevant product areas as a key driver of growth post COVID-19.

Ad agencies deliver growth to their clients through branding and marketing, so why wouldn’t the same work for them?

More than half (58%) of agencies see redefining their own branding and positioning as the top driver of growth in the COVID-19 era, according to 4A’s survey of 113 members, released Wednesday. 

A majority of respondents (81%) were independent agencies, with 62% of respondents overall reporting having up to 100 employees. Roughly 19% of respondents are part of a holding company, with just 4.4% having between 300 and 500 employees. 

Forty-one percent of respondents said agency positioning in general is the strongest lever to drive growth, compared to just 23% who cited service offerings and about 12% who pointed to new agency models as top growth drivers.

“Agencies are more focused on differentiation with their branding and positioning before looking to vertical offerings or a new design mix of resources, including talent,” said Marla Kaplowitz, CEO of the 4As.

One agency respondent said “refining [our] position to respond to changing market conditions” was critical to growth. Another said their firm is “planning on ‘refreshing’ positioning early next year to better reflect the agency partnerships CMOs are looking for.”

Agencies compete in a crowded market, so standing out is critical. It doesn’t hurt that brand positioning is also their bread and butter.

But branding isn’t the only ingredient to foster growth; capabilities and execution matter too. Of the 23% of respondents who believe client-facing services will unlock the most agency growth, 27% are investing in brand strategy and creative expertise, respectively, while 18% are investing in digital transformation.

More than half (56%) of respondents are leveraging strategic partnerships to grow into new service areas, whether that’s with enterprise tech companies or creative partners.

“Companies no longer have to create and build all capabilities from scratch when there are opportunities to accelerate growth by establishing or expanding partnerships or through acquisition,” Kaplowitz said.

About a quarter of respondents see hiring and investing in talent as a way to grow vertical expertise. As one agency put it: “We have identified our largest supplier expenditures and are actively working to acquire in-house talent that can perform some of those services.”

New models

While there’s a ton of talk about the “agency of the future,” only around 12% of firms think investing in new models will drive overall growth.

Within that bucket, 26% of respondents cite hiring new talent as core to revamping agency models - 23% said realigning existing talent and resources will kickstart expansion.

One respondent said their agency is focused on “actively shifting our focus and staff resources to higher order strategic initiatives and services,” while another plans to “work with our parent company to identify new resources when they become available.”

Underlying the need for new talent and new models is a need to stay up to speed with a constantly changing market, Kaplowitz said.

“Regardless of the type of agency offering and model, the most crucial area for investment will always address evolving marketplace dynamics and marketer needs while leaning into innovation,” she added.

However they determine is the best way to get there, 14% of respondents agreed increasing topline revenue was a primary growth priority, followed by profit growth (24%), new business wins (13%) and diversifying service offerings (12%).

Agencies also overwhelmingly (89%) agreed creativity is core to achieving growth.

“Creativity is a factor agencies deem critical to growth right now and going forward,” Kaplowitz said.

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