Working with 250+ agencies a year gives us a great perspective on the top agency trends that impact (or are going to impact) us all. With that in mind, I hope you were able to listen to podcast episode 85 where I covered the half of the trends that I expect will have the biggest influence on your agency in the next 2-12 months. This solocast will cover the second half of those top agency trends of 2017.

This would be a good episode to share with your leadership team because it’s all about the realities we need to be prepared to face in the coming months. Our conversation will cover:

  • Augmented reality and virtual reality: what you need to know about this technology that is coming fast
  • Influencer marketing: connecting your client’s brand with their audience through social influencers who have built an audience around a specific topic
  • Ratings & Reviews: How agencies can turn a profit by solving this problem for existing clients (and how to use it as a door-opener for prospects)
  • Why agencies are developing relationships with more people inside companies than just CMOs
  • Why you need to play nice with the other agencies that you share a client with
  • If you’re not being offered exclusivity, do you need to offer it in return?
  • Selling what you know and what you think instead of “stuff”
  • ROI: why it’s not an optional conversation
  • Why you need to be transparent on your fees
  • Bragworthy benefits like a student loan repayment program

Drew McLellan is the Top Dog at Agency Management Institute. For the past 21 years, he has also owned and operated his own agency. Drew’s unique vantage point as being both an active agency owner and working with 250+ small- to mid-size agencies throughout the year, give him a unique perspective on running an agency today.

AMI works with agency owners by:

  • Leading agency owner peer groups
  • Offering workshops for owners and their leadership teams
  • Offering AE bootcamps
  • Conducting individual agency owner coaching
  • Doing on site consulting
  • Offering online courses in agency new business and account service

Because he works with those 250+ agencies every year — he has the unique opportunity to see the patterns and the habits (both good and bad) that happen over and over again. He has also written two books and been featured in The New York Times, Entrepreneur Magazine, and Fortune Small Business. The Wall Street Journal called his blog “One of 10 blogs every entrepreneur should read.”

To listen – you can visit the Build A Better Agency site ( and grab either the iTunes or Stitcher files or just listen to it from the web.

If you’d rather just read the conversation, the transcript is below:

Table of Contents (Jump Straight to It!)

  1. Trend #10: Virtual/Augmented Reality
  2. Trend #11: The Rise of Influencer Marketing
  3. Trend #12: Ratings and Reviews
  4. Trend #13: Developing Relationships Outside of the Marketing Department
  5. Trend #14: More Agencies are Being Involved with Each Client
  6. Trend #15: Agency of Record (AOR) Relationships are Becoming Extinct
  7. Trend #16: Agencies are Being Too General in What they Sell
  8. Trend #17: Clients are Demanding Agencies to Show ROI
  9. Trend #18: Agencies Need to be Even More Transparent with Clients
  10. Trend #19: Offering Student Loan Reimbursement Benefits to Employees

Drew McLellan: Hey there, everybody. Drew McLellan here with another episode of Build a Better Agency. This is one of my solocasts, so rather than having a guest with me today. This is just gonna be you and I chatting, obviously me doing more chatting than you, about something that I want to make sure you are thinking about or that you are sharing with your team.

About four or five weeks ago in episode 85, I talked about nine of the top agency trends that I was seeing rippling through or coming at agencies like yours and mine, and in this solocast, I want to wrap up that list with the back 10 of my list of 19.

If you haven’t listened to episode 85, I would highly recommend that you do that here:

There’s nothing magical about the order so if you haven’t listened to it, there’s no reason to stop this episode and go back and listen to 85 first, but maybe after you’re done with this one, if you find it valuable, you will be inclined to go back and check out the first nine trends that I talked about last month.


Trend #10: Virtual/Augmented Reality

Alright. Trend number 10 is one that I suspect many of you are keeping your eye on, but my experience has been that most of you have not dabbled in yet. Augmented reality and virtual reality are definitely the next new frontiers for us and that we need to be very fluent in, very quickly. Many of my AMI agencies have already done projects, either for themselves or for clients, in the AR and VR space. It’s going over very well. It’s new enough, it’s cutting-edge enough so it’s super sexy at a trade show or in other applications.

But if you have not done one of these projects yet and you do any sort of video work or any sort of association or trade show work or your clients are on the B2B side and perhaps sell something that’s difficult to be in front of like a large bulldozer or a house tour, things like that, I highly suggest that you start to play in the AR and VR space.

Find a project, whether it’s for you or a pro bono project or a client who’s willing to be your first guinea pig, but this is something that you really need to learn and you need to learn quickly.

The good news is there are a lot of good partners out there who will help you shoot and edit so that you have the best quality for your AR and VR. And as you know, the goggles are getting ridiculously cheap and much more commonplace and so, as that technology gets into more people’s hands, this will become more mainstream. Many agencies are actually purchasing some of the Cardboard viewers, sometimes labeling those or putting your client’s logo on those as part of a promo or giveaway, and then also building out the content for that. If your audience doesn’t have the goggles or the viewers, in many cases agencies are working with clients to provide those. That’s not something that I would suggest you dilly dally on, I think that’s something you need to really be paying attention to.


Trend #11: The Rise of Influencer Marketing

If you’ve been in the agency business for a while, you probably remember back in 2008 when social media was the rage. Remember when we were all struggling to figure out how to do community management and how to help clients understand that they needed to have a presence on Facebook and Twitter and some of the other emerging platforms?

Well, this next top agency trend is basically what that was then and the trend that I’m talking about is influencer marketing. What social media was back in ’07 and ’08, influencer marketing is today.

Most of you are very familiar with that term and what it means, but in case you’re not, it’s basically connecting your clients’ brand with their audience through social influencers, through typically amateurs who have built a platform or an audience around a specific topic. It might be a foodie who’s got a great video blog or it might be a B2B specialist in your client’s area of expertise that has a great podcast.

These are people who are not media outlets in the traditional sense, but they are absolutely media outlets. And getting them to sample your clients’ products or services or write about them and talk about them is becoming a huge part of many agencies’ business. You certainly can source the social influencers yourself or there are aggregators out there, tools on the web, where you can search for and negotiate through a third party with the social influencers.

One of the things I want to caution you about is unlike traditional media buying where everybody sort of knows the game and knows the rules, in this world, it’s a little bit more like the Wild Wild West. Everybody’s making up their own rules and in some cases, there aren’t rules. Make sure that you document well the deal that you’re cutting with these social influencers and be very, very specific in the deliverables that you expect.

This is different than a pure PR play. These are people you are going to pay for the exposure that they give your client’s brand or product or service on their platform. This is not a PR play. This is a paid media play and obviously, by the FTC rules, they’re gonna have to disclose that they got paid or compensated in some way even if it was just for your product. They are obligated to do that.

Make sure that you are covering yourself legally by having the contract insist that they follow all of the FTC rules and any other rules that your client may have so that you don’t get caught on the back-end of that.

But lots of agencies are finding that there’s great profit in doing that and quite honestly, that it’s very effective.The consumers are already enamored with these media producers, with these subject matter experts. They already have a following and so, it’s easy to leverage their popularity and their confidence and trustworthiness that they have built in their audience. So don’t miss out on that opportunity.


Trend #12: Ratings and Reviews

Another place that agencies are really making a lot of progress is in the whole space of ratings and reviews. Many businesses are struggling to even monitor let alone respond to the ratings and reviews they already get. Other businesses want more ratings and reviews. Some businesses, and I am sure you’ve come into contact with clients like this, are afraid of ratings and reviews so they sort of ostrich it by not paying any attention to them. But especially with some of the new algorithms that Google has come out with, which is now giving more credence to reviews, especially reviews put right on Google, in terms of search results. This is not an area where businesses can ignore this. And so, many agencies have put together a package where they are helping their clients track the ratings and reviews, respond to all the ratings and reviews, and in many cases, generate more ratings and reviews from happy clients or customers.

This is a place where many agencies are selling this as a product. They’re packaging it as a stand-alone product or service that they are offering to their existing clients and it’s also a great door opener depending on the categories in which you serve clients. It’s a great door opener for new business as well. Don’t disregard that. And by the way, make sure that you’re paying attention to your own ratings and reviews, whether it’s on Glassdoor or Google or other places. This is also something that you need to be paying attention to as a business owner. It’s not just for our clients, but it can be a profitable problem that you can solve for your clients.


Trend #13: Developing Relationships Outside of the Marketing Department

One of the top agency trends of 2017 that I love seeing, I think it’s super smart and it’s something that I have been talking about for a while, but it seems like agencies are really wrapping their arms around it is I’m seeing a lot of agencies develop relationships beyond the traditional marketing department or the CMO.

Traditionally, agencies have done most of the work inside their clients through the marketing departments. Even if they were doing work for another department, the work itself came to them through a CMO or a marketing department. But what I’m seeing now is as companies get more siloed as different budgets are divvied up by department and as the marketing departments inside companies are getting leaner and so they can’t pay as much attention to all of their internal audiences, what I’m seeing is many agencies developing relationships with the sales department or the HR department or some other department inside the organization.

This is smart for a couple reasons. Number one, as we all know, the life span of a CMO is pretty limited. Every time there’s a CMO change, every agency is at risk of the new CMO bringing in an agency of their own liking.

By having multiple relationships inside an organization, you’re a little stickier if the CMO comes and goes, but also there’s pockets of money in all of those departments and the more relationships that you can create inside the organization, the more solid your footing inside that organization and the more likely it is that you’re gonna get an opportunity to sit at the C suite or at the planning stages of at least some of these departments.

It’s good revenue. It’s different pockets of money so if you’re marketing department client has sort of run out of funds, there are other funds inside the organization, as you know. Many agencies are taking advantage of that by creating relationships that go beyond just the traditional marketing department.


Trend #14: More Agencies are Involved with Each Client

Another trend that I think is a little longer in the tooth, so I think we’ve been seeing this for a while and we certainly saw evidence of it in the CMO research that we did in 2015, where we talked to 500 plus CMOs and asked them about their agency relationship, this trend is a little more mature, but I still see it evolving and some agencies are facing it more than others.

The reality is for many agencies, you are not the only agency in the mix and so, there are foxes in the hen house, if you will. And unless you are really a specialist agency, meaning that you have a depth and a niche, which makes you such a subject matter expert that the client can’t imagine a generalist agency holding up their end of the bargain compared to what you do.

If you are more of a generalist or if you do a little bit of everything, odds are, at least with some of your bigger clients with bigger budgets, you are having to share them with other agencies. And I will tell you that time and time again, in conversations I have with CMOs, they get very tired of the grousing that agencies do, and often it’s a passive aggressive grousing.  

It’s not a very pointed complaint, but it’s a passive aggressive sort of throwing the other agency under the bus sort of behavior. And what CMOs are telling us is the agency that’s gonna stick around is the one that learns how to play nice with others. If you find yourself in the situation where you are sharing a client, you’ve got to find a way to find the balance between protecting your own turf, but also not talking badly about the other agency and ideally, working well with the other agency.

I’ve got a lot of agencies in networks that have found ways to sort of swallow their pride and really come together with other agencies that are serving the same client and actually delivering a great combo product or set of services by working together. And in fact, those relationships have led to other partnerships and other referrals from other agencies who perhaps don’t do something that you do. Be careful about throwing the other agency under the bus, but don’t be surprised if there are other agencies in the mix.

Alright. I’ve got a couple more top agency trends that I want to talk to you about, but first, let’s take a quick break and then I will come right back and we’ll wrap up with the last five trends.

Alright, welcome back. As you know, this is my solocast and we are talking about trends that agencies are facing this year, and some of them are emerging trends and others have been around for a little while, but are still really shaking things up in a lot of the agencies that we work with.


Trend #15: Agency of Record (AOR) Relationships are Becoming Extinct

Another trend that I think is a little more mature in its existence is the whole idea of agency of record relationships and today, quite honestly, they’re almost extinct.

Even if you have a contract with a client and even if it’s a large client, it’s really oftentimes more of a set of projects or deliverables against a certain dollar amount, but there’s nowhere in the contract that says that that client is bound to give you all of their work and that’s what an agency of record contractor relationship is really about is that they offer you exclusivity in exchange for offering them exclusivity.

For example, if you had a big car dealership as a client and you were the agency of record, part of the deal is if they had any money, they would spend it with you rather than other agencies and in exchange, you would not work with any other car dealers that they would deem as competition.

One of the things that is sort of an interesting offshoot of this trend is that while many, many clients refuse to sign AOR contracts or even consider them, agencies are still offering that exclusivity to their clients on the other end.

I think one of the wake-up moments around this trend is if you’re not being offered exclusivity, do you need to offer it in return? I think it’s a very case-by-case thing. I don’t think this is a black and white thing, where you absolutely should never offer exclusivity because sometimes that means you’re gonna lose business.  

But I also think that we offer it as a default and in some ways, sometimes we offer it when a client doesn’t even ask. We just assume that because we are working in XYZ industry, it’s only right or ethical to only serve one client in that space.

As you know, there are many agencies that all they do is serve clients in a specific space. There is a way to handle that with integrity and respecting everybody’s confidentiality. Don’t be so quick to give that away unless they’re gonna give you something in return as well.

What some agencies will do in absence of the AOR relationship tied to exclusivity is make it be a dollar amount. That every client that spends over X, and for each of you, that X will be a different amount, but every client that spends over X gets category exclusivity within a certain geography. Consider that as an alternative.


Trend #16: Agencies are Being Too General in What they Sell

Another trend that I am seeing is, and this one, I don’t think we’re anywhere near where we need to be on this, so I think this has been a need and a pivot that agencies have needed to make for a long time, but I don’t think we’re anywhere near where we need to be and that’s the whole idea of when we sell to prospects, we still sell too much about the stuff we make.

So, we sell things, websites, promotional packages, trade show strategies, whatever it may be, and we don’t sell enough of what we know and how we think.

Quite honestly, as you all probably know, the number one agency in the world right now is Accenture with over 4,000 employees. And you know what? They hardly make a thing. What they really sell is their thinking and their strategy and their planning. And they’re, by the way, charging $300 to $400 an hour for what we do for maybe $125 or $150 an hour.

We’ve got to start talking about the fact that what we bring to the party, what can’t be commoditized, is what we know about the industry and the way we think about marketing and business. Because I don’t care how good you are at any of the stuff you make, somebody else out there makes it and somebody else out there makes it for less money.

We’re constantly being pushed and pulled on price around the things that we make, but I guarantee you will have less pressure on price and you will have more of a seat at the table around planning when you start talking about the fact that what you sell is your strategy and your thinking and your expertise and your contacts in the industry, and all of those sort of things that cannot be commoditized.

This is something we have to get better at and I’m seeing other businesses like the big consulting firms kind of kicking agencies down the curb by doing this better than we do. This is, I guess, an aspirational trend. I want to see agencies get a whole lot better at this. And I will tell you, the agencies that I know that do talk about themselves this way, much more in a consultative model than a stuff model, are the agencies who are showing double digit profitability that would make anyone envious. I know it’s working. We just have to change not only the way we talk, but the way we think about ourselves.


Trend #17: Clients are Demanding Agencies Show ROI

Another trend that is really starting to emerge is this understanding that agencies now have that ROI is not an optional conversation to have with clients, that our clients are demanding the ability to tie results to what we do.

Back, even five years ago, if you said to a client, “Well we would love to be able to tie results to the marketing strategies we have and the things that we’re doing for you. How does your CRM system track this? How does your sales system track that?” A lot of times, clients would come back to the agency and say, “Well, you know, we don’t have sophisticated enough software.” or “We don’t have the tools to track that.” And agencies, in the past recent history, would accept that as a “Okay, well it would be great to be able to do it, but I guess we can’t.”

And now what I’m seeing is, and I’m really happy about this, now what I’m seeing is agencies are not accepting that as an answer. They are getting very creative and a little assertive in helping clients figure out how to track leads to the sale. Even if the client doesn’t have the software and the client is not gonna invest in the software or they still take paper orders or whatever it may be, there’s always a way to track the sale.

For example, I had an agency that was working with a client who said, basically, “We have five different sales outlets and every one of them, the way they record the sale is on a piece of paper, which we then file in the home office.”

Rather than allowing that to be so daunting that the agency just said, “Okay, well I guess we can’t track to the sale.”, what the agency said was, “Great. We would like the last year of those pieces of paper and we’re going to digitize them. We’re gonna enter all of that data in and then every month, we want all of the new papers and we’re gonna start building out a database of prospects and customers and then we’re gonna be able to track whether or not the stuff that we’re doing is driving the sale.”

I’ve had lots of examples of this that I could tell you about that agencies are getting very creative about figuring out is it accurate to every single sale? Probably not. But is it darn close? Yes. Is it a lot better than saying, “Oops. I guess we can’t track.”? Absolutely.

If you are not tying results to the work you’re doing for clients, you know what that means. The minute the client’s sales drop, and you have no data to be able to show that what you are doing is or isn’t working or they’re driving people to trial, but they’re not buying, which means it may be a pricing problem or a product problem. If you do not have that data, you’re going to get blamed and fired. If you would like to keep your clients for the long run, you absolutely have to figure out how to tie results to your efforts and don’t take “No” or “We can’t” as an answer.


Trend #18: Agencies Need to be Even More Transparent with Clients

One of the top agency trends, which I think is, I guess, in some ways alarming, but not really surprising is many of you are familiar with the ANA report that came out probably about a year and a half ago now that basically called the big agencies, the holding company-sized agencies, it called them out for some really shady media practices.

Money under the table, some of the holding companies owned media outlets and were placing buys basically in their own media outlets without disclosing to the client that basically they were double dipping. They were getting paid to plan the media and then they were making all the money on the media.

Other agencies were taking prizes or rewards or trips from the media outlets without ever disclosing those to the clients. There was a whole bunch of stuff that went on. There was a lot of stuff around digital media buying and the lack of transparency around the markup and how much of the client’s money was actually going to the media and how much of it was being dispensed to all the partners who had their fingers in the pot of placing the buy.

Anyway, the net result of this is that clients, and rightfully so, are paying a lot more attention and this is trickling down now to the small and mid-sized agency space. It started in the big box agencies, but now it’s trickling down to agencies our size, as well.

What I’m gonna tell you is that the outcome of this trend, or what we need to do from this trend, is we need to be transparent about our fees. I’m not suggesting that you shouldn’t mark-up out-of-pocket expenses. I’m not suggesting you shouldn’t take a commission on media, but what I am suggesting is that you need to do it with a full transparency.

In contracts, in conversations, however you normally do that, make sure that you are covering your agency’s rear end by being very clear about all of the ways that you are making money from the client.

Whether it’s fees or markups or commissions or anything else that you have going on, there’s nothing wrong with any of it as long as you disclose it to the client on the front-end so they are not surprised by it or you don’t get caught doing something that, even if you think they should know because it’s the industry standard, remember that this isn’t their industry. They don’t have to know.

You have to make sure that you are very forthright about it and that you are very clear about it. And my recommendation is that it is in your proposals or scopes of work or your contracts, whatever documents you have with a client that outline what you’re gonna do for them and what it costs. Make sure that you are very clear about the markups and the commissions so that you don’t get caught in this fray of concern over transparency, even if you aren’t doing anything wrong. I would over-communicate, if anything, so that you make sure that your clients know that you are above board and ethical.


Trend #19: Offering Student Loan Reimbursement Benefits to Employees

And then this last trend I find fascinating. Forbes called this the trailblazing benefit of 2017 and it is a student loan reimbursement so that it is basically a bonus program that pays back or pays off a portion of your employee’s student loans. If you have ever chatted with some of your younger employees, you know that they are burdened by some pretty significant student loans. In fact, many of your middle management people in their 40s are still paying back those student loans and it weighs on them.

What’s interesting is kids today, air quotes over kids, kids today, 30 year old and younger, are much more eager and willing to talk about their financial situation publicly, whether it’s on social media or other places. It’s not like their family and friends don’t know that they are saddled with the big student loan debt.

But also interesting is one of the things that is happening in the workplace is that there’s this thing called bragworthy benefits and one of the things that is very sticky for particularly younger employees, but I would say this is true of employees of all ages, are benefits that your agency offers them that are boastworthy or something they can talk about on social media.

I’m in my 50s. It would’ve never occurred to me to talk about a debt that I had, like a student loan and how I was paying it off, but today’s generation is much more comfortable around that.

Anyway, this benefit, this student loan reimbursement benefit, which is basically just repackaging a bonus program is getting a lot of attention and really starting to gain traction.

According to the Forbes article that I read that was written at the tail-end of 2016, this is an up-and-coming benefit. Right now, only 4% or 5% of all US-based companies are offering this as a benefit. This is something you could get kind of on the cutting-edge of if you want to consider doing it.

So far, as best I can tell, there is no way to make this tax deductible to your employees, so in other words, they’re going to pay, just like they would for any bonus, they’re going to pay income tax on this even though the money is going to their student loan and it’s deductible to you just like any other bonus would be.

But it’s really the packaging of it and the way you serve it up that is interesting and bragworthy to your employees. And many of you, as we have talked about, in the last trends podcast, episode 85, many of you are struggling to find and keep your great employees. This may be something that you want to consider as you look at how to create a great workplace and make sure your employees know that you appreciate them, and by the way, because it is bragworthy, it may attract other employees or perspective employees to you.

That’s it. That’s all the 19 top agency trends of 2017 that I have been talking about, that are facing agencies or challenging agencies right now.

I’m hoping that I’ve given some of you some food for thought around this or maybe validation of things that you’re already seeing in your marketplace and hopefully I’ve given you some ideas of how you can leverage these trends and take advantage of them so that you don’t get caught too far behind and that you can have a great 2017 and take advantage of riding the wave of some of these trends.

So that’s it for today. As always, I am around if I can be helpful, [email protected]. I am grateful that you keep listening to the podcast. Thanks for all of your emails and your notes. I read them all.

I also read all the ratings and reviews so I’m super grateful for those as well. I will be back next week with another guest who is gonna help you build up your agency to be everything you want it to be, and in the meantime, have a great week and I’m around if you need me. Thanks.