The Agency Model - Path to Enlightenment?

When I stumbled upon the imagery below from David Armano at Logic+Emotion it really fueled my thinking about business models in general. I have often been fascinated with the “agency model.” There are those, like myself, that believe the traditional agency model is dead.

Strategically, creating a business around this model is the equivalent of agreeing to be a dog chasing it’s tale. A company that operates under this model must always be re-inventing itself. It must be the perfect blend of sales, creative and execution. If any of these three pillars fall short it will impact the future of the business. Revenue is dependent upon closing the next deal. Resource management becomes tricky. You are only as good as your last project. Reputation is everything and one false slip at scale could destroy everything.

At an operational level it requires that a business be diligent about the number of hours and resources it dedicates to any single project. It must be accountable down to the minute and thus, keep the client accountable as well. Many times this is in stark contrast to the typical agency mantra of “keep the client happy“— after all, the agency of record is the holy grail. The drive to keep the client happy, execute the big idea and actually generate revenue is great in philosophy but extremely difficult in practice.

So it makes no difference if your business is interactive, social, digital, new media or even traditional advertising. The “Agency Path to Enlightenment” may provide insight into one possible path to agency success. Is it sustainable?