The Impacts of Changing Agency Models - Markacy

The Impacts of Changing Agency Models

DTC business models have fundamentally changed how brands, agencies, and marketers interact, and this has only been accelerated by the pandemic. 

There are more outsourced, freelance options for agencies, more fluidity and less permanence, in employment options for marketers. Let’s examine some of these trends and explore their impacts they’re having on both brands and creatives:

Impact 1: Freelance Creative Talent

It’s no secret that companies no longer want to hire permanent teams. This is especially prominent among creatives, who often enjoy demanding their own rates, and do not want to be on site. 

So what does this mean for brands? For one, creatives become a commodity which may not be good for business since there’s not much opportunity to train to brand standards. Creatives and creative businesses are often seen as easily disposable.

“Content farming” websites such as Upwork and Fiverr empower creatives to run their own businesses, set their own hours, and demand their own rates. However, extremely competitive rates often take away from these opportunities. Businesses also suffer since creatives at these low rates are usually not up to par and can cause more problems than they try to solve. Avenues such as this are also obviously detrimental to agencies. 

With no internal team or consistency in work, companies are vulnerable too because they can’t keep good talent. Good freelance talent can actually be more expensive to maintain and there’s unpredictable variability in output not to mention throwing caution to the wind for standards.

Impact 2: Hybrid Model Costs

Many start-ups are indeed operating on a shoestring. They want to get as much as they can and to pay as little as possible, which is understandable. However, this is often (unsurprisingly) inefficient. 

Operating teams love freelance and temporary solutions, but that also means a trickle down effect to the end consumer. This type of feedback loop is very obvious in freelance customer support reps. There’s no floor to these companies, and consumers often abandon the company entirely because they don’t feel that the company is not reliable in the long term.

Impact 3: Risks versus Rewards of Remote Work

Remote work is a double-edged sword and each end must be recognized for accurate assessment. For example, it can be much harder to identify inappropriate behavior remotely, confidentiality risks exist, and employees are sometimes viewed in a different light by their coworkers. It’s also possible that the culture of the firm will be affected since company values may not seem as important or difficult to uphold. 

“Without the natural rhythm and with no opportunity for decompression from work as no commute time, staff are often working much longer shifts and so more prone to errors and to suffering mental health issues,” says the New York Times

Some benefits of remote work might be increased morale due to decreased feelings of confinement. For example, real estate company Zillow found that their employees’ productivity remained high when it went permanently remote, with a 9 percent spike in employee engagement.

Impact 4: The Costs of Not Having a Company Culture

​​One in five Americans have left a job in the past five years due to bad company culture. The cost of that turnover is an estimated $223 billion, according to a new SHRM report on workplace culture. Nearly half of employees said that they had thought about leaving their current organization, with one in five having left a job due to toxic culture in the last five years. What’s interesting is that many culture-changing initiatives don’t even incur direct costs to a company.

“The reality is that culture, which is often thought of as a company’s most precious asset, is increasingly a liability for companies that don’t tend to it,” writes Harvard Business Review. “Continued advocacy around #MeToo, new levels of scrutiny from investors and regulators, and increased activism on social media are forcing boards and CEOs to be accountable for culture in ways they haven’t seen before.” 

Investing in employees and culture is better for businesses, however you look at it. And while cutting down on cuts in the short-term might look like a great idea, it’s often not, not even from a financial perspective. 

“When employees perceive that their employers aren’t living up to their end of the deal, they’re less inclined to live up to theirs, often becoming disengaged, displaying passive aggressive behavior or letting work quality slip. When these conditions exist at scale, companies very quickly become vulnerable,” the Harvard Business Review goes on to say.