Specialty Agency Versus AOR
When I started out in the marketing business, the goal for ad and marketing agencies was to be the AOR—Agency of Record. Being AOR was the Holy Grail; it was the destination. It meant your company was the one partner the client had, you did it all, and you handled all advertising and marketing for them. AORs were unbelievably protective of this status, playing “king of the hill” against their foes. There was only one winner in that battle, and every other agency was left out in the cold.
Our company traveled a slightly different route as we began working with some of the largest brands in the world and could not be considered their AOR. Their AORs were often multi-billion-dollar agencies with worldwide media buying services, thousands of employees and dozens of offices worldwide. To say the least, that made it difficult to compete head-to-head with these huge AORs.
So, instead we found a niche. We worked with the AORs and did the work they didn’t like doing or didn’t have time to do, for far less than their New York City or London rates. Over time, we became a partner to the AORs and began to notice there were other smaller firms like us helping them out as well. We had to partner with these firms because the goal wasn’t “all or nothing,” it was taking care of the client and the AOR. We learned to play well in the sandbox.
In the last five years, an interesting phenomenon has taken place. Not only have the largest companies in the world continued to work with specialized agencies like us, but medium, even smaller companies have also.
It makes sense. Few agencies can do every single thing, although some promise they can. Also, some agencies seem to have a talent and passion in a particular area. For example, our agency works only with companies that sell through a channel, such as dealers, distributors or reps. We find that fascinating, because no matter how great a brand or product is, if the people who represent it don’t buy in, you’re in trouble. And conversely, if you have an inferior product and brand but the people who represent it are sipping the Kool-Aid, you can actually succeed. We found our passion and our place as a specialized agency focusing on the channel.
Some marketing firms believe the downside of being a specialized agency is you often work on smaller projects that have a short life, which is exactly the opposite of the AOR, multi-year, mega-budget approach. The upside is you get to work with a lot of different clients who often compete with each other but turn to you for specific expertise. As an AOR, you cannot work with a client’s competitor. As a specialized agency, you’re expected to—in fact, there’s power in being able to show you have great knowledge in a particular industry and space.
The other factor in marketing today is that not only do we need to work well with other agencies but also with the client’s internal marketing team. Those teams are growing, and it’s critical to be an extension for them as well. Some firms look at the internal team with disdain, but we’ve learned the internal teams have a tough challenge. They have to work with and please numerous departments and are often handed nearly impossible expectations with limited resources. Those departments need an “extension” of their team to help shore up what they can’t do.
I can recall countless times seeing looks of surprise in people’s eyes when sharing what our company does for clients. We’ve created customer experience training for 3,000 dealers. We’ve helped a client re-engage their sales network. We’ve re-branded a manufacturing company. We’ve launched products and brands, and rallied our clients’ employees worldwide with an internal branding program. All those projects were possible because we looked at them as opportunities to make history (or at least try) and not worry about a long-term exclusive AOR relationship.
Being a specialized agency that performs and gets along with other agencies and internal teams is a healthy trend. It requires collaboration, humility, teamwork and an entrepreneurial confidence that embraces tackling challenges without having a “net” below to catch you.