As traditional agencies continue to scuffle for survival, virtual agencies are growing. Suited to the modern client and business environment they are disrupting an old industry in desperate need of reform.

Like the dinosaurs 66 million years ago, traditional agencies find themselves struggling to survive in a changed environment. For the dinosaurs a meteor the size of a mountain slammed into Earth. Filling the atmosphere with gas, dust, and debris altering the climate. For traditional advertising agencies, the advances in technology over the past 25 years have changed how business is done. In all industries in fact. New business models have emerged delivering customers greater value and convenience. The advertising agency world has been slower to adapt to these changes. Quite ironic given that the industry develops and embraces new ideas for its clients. Yet things are changing. Over the past ten years the global emergence of the virtual advertising agency has become more prominent. This blog post discusses the advantages of this new model while looking at the inherent issues with the traditional agency model.

To begin it is important to understand what a virtual agency is. Whilst a virtual agency often offers digital services it is not the same thing as a digital agency. It is also not a traditional agency that has its staff working remotely. A true virtual agency is not only location independent but also has a structural fluidity. Offering superior expertise to clients by integrating top talent from around the world. Expert teams are assembled based on the client’s needs. The client wins through having this fluid diversity of talent. Additionally, many overheads that add no value to the end product are not included in this model. Examples include: rent, physical infrastructure and unnecessary staffing. So what’s so wrong with traditional advertising agencies? On the surface of things… nothing. Functionally a client will get the service they pay for. However, the business model has limitations impacting the quality of service received. Permanent employees are fixed overheads that must be paid for and thus utilized. This may or may not be a match with a client’s needs. For example, is the copywriter assigned to your account more retail than B2B? Maybe you want to optimize your website for a better user experience and search engine ranking. Whilst the agency’s digital team improves things somewhat, your ranking is still low because they are not in fact SEO experts. This is often the result of a trade off that traditional agencies face all the time. “Do we provide the best solution for the client and outsource (because what I have in store is not fully adequate) or do I look after the bottom line? You can guess what the answer is more times than not. Traditional agencies also suffer from having an outdated mentality on advertising. For example, for many years part of the show of advertising has been that of the funky agency. You know the place. Where all the cool kids hang out. In these agencies you’ll find the stereotypical song and dance. Aesthetics is a big selling point that receives priority. Have you seen such things as a bold red couch or some new age furniture? Maybe you’ve observed walls adorned with inspirational quotes with striking colour contrast. Letting everyone know how creative and edgy they are. There is also the cubed glass meeting room, designed to do the same. Then there is the young playful self-image showing that they are a different breed of people to the average Joe. Sometimes that translates to having a foosball table, punching bag or bean bags on show. Things only creative geniuses have. Then there are the viral videos flexing the team as being fun, young and creative. Btw most staff hate these mandatory videos. Hey, I’m not hating on cool architecture or being fun (or appearing to be). What I am saying is it has become clearer that clients have become less impressed and motivated by this. What they want are effective solutions that move the needle of their business. The smoke and mirrors approach doesn’t cover the cracks in performance. Many modern clients are now no longer impressed by this superficial impression management. Instead, they want the right agency and the right team. This leads us on to our next point. Clients are wising up to the bait and switch tactics of traditional agencies. That is, the tactic of pitching with senior people but having juniors working on the account once it is secured. Clients hate this. They want senior people to work on their business, helping them achieve their marketing goals. What they don’t want is to pay for overpriced overheads, extravagant office space and subsidizing the agency head’s lifestyle. Ah the good old days…. With many agencies downsizing because of the pandemic, who works on a client’s account is now even more suspect. Many senior staff have been let go, leaving the more affordable juniors to do the work. There are even instances where staff members are being pulled across departments into different specialties to help manage the agency’s workload. Yes, this happens! Leading to greater client dissatisfaction. The murmurings from the client world are becoming louder. “Enough of the overpriced facade, we want a team of professionals that can move the needle of my business”. So what does a virtual agency look like? Often, they have a core senior consulting nucleus providing marketing and communications expertise. This core team is a constant with the client. They tend to be hyper connected with professionals from around the world. Allowing them to form teams from anywhere to best meet a project’s needs. Similarly, they work with geo diverse clients. Offering a senior team, with no bait and switch tactics, or round pegs in square holes. Or put another way, they get reassurance that they will get a great team catered to their needs. For the time being the dinosaur agencies still walk the earth. But it is the virtual agency that is seizing the day!

F1 Agency is a virtual advertising agency. We work with a wide international network of marketing communication professionals. To find out more how we can help your business, contact us for a free consultation at: LetsTalk@f1-agency.com.