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David Schulhof

GUEST BLOG: The Death of the Agency of Record?

By David Schulhof, Sales Director, Red Hot Penny

Is there really still room for both Agencies of Record (AOR) and specialised SME agencies in today’s market?

AOR is a term that’s being heard less and less, which is great for smaller agencies. It used to be impossible for creative and super talented boutique agencies to work on sizeable projects and compete with bigger rivals.

Strict procurement policies and expansive project scopes – complete with lengthy RFI processes – favoured the big boys and gave the rest little chance.

But in the past 18 months it feels like a shift has occurred, with brands of all shapes and sizes seeking more agile support for projects with defined briefs and goals – perfect for an SME agency.

A recent article from Marketing Week shared some stats that support this shift, with 66% of business leaders expecting to use SME agencies instead of their AOR this year. Couple this with the fact that over the next five years, 78% will place more value on specialised expertise over general offerings, now really is the time for SME agencies to shine.

It would be naïve to think that the big agencies don’t have an important role to play. Big brands will still have an AOR, but rather than turning to them for everything they’ll use a network of smaller, more agile and specialist agencies on specific projects.

With all the sad stories about high street heavyweights struggling will the brands that survive and continue to grow be the ones that have single AOR models or those with a network of specialist agencies and resources?

Only time will tell, but I’d personally back the SME agencies that can offer better value for money and bespoke services as the ones that will be helping drive brand growth. What do you think?