Agencies types and why Agency Of Record has died

I have one project so why do I need so many advertising agencies?The client has asked.

There’s a lot of confusion about different types of advertising agencies and particularly their names which should reflect their area of expertise. It’s undoubtedly tightly linked to a path which a single ad needs to go through to be designed, created, distributed and then spotted by its target consumers.

It might be confusing for anyone whose advertising is not the main area of activity but more importantly clients who might want to advertise a little bit more feel disoriented about all these names such as: “Creative Agency”, “Production Agency”, “Studio”, “Media Agency”, “Digital Agency”, “Advertising Agency” or “Agency Of Record” (AOR).

In this blog, I am going to focus on all agencies listed above although you can find many other names which might confuse you even more. The reason for this is because other names will depend on their clients profiles and industries they specialise in. For example B2B, Corporate, Recruitment or Financial  Advertising Agencies etc.

Imagine, there is a client “X” who wants to advertise a product or service “Y”.

It usually starts with a research phase to identify a target group for the product “Y” and find out which communication channels will best fit that group.

Remember, in the end it’s never about selling a product but benefits it provides. It’s crucial to have a great design which will solve people’s problems or play with their emotions.

Then a Creative Agency comes up with a creative idea starting with a traditional way of using a “pen and paper” or proposing a visual presentation or mock up of the ad for the product “Y”.

Then it’s handed over to a Production Agency which will produce the ad with help of experienced people like: Graphic/Web Designers, UX Designers, Developers, Creative and Art Directors, Architects, Technical experts and other specialists supporting the whole production process.

Ads can be also produced in a Studio which has specialised Producers and teams who build the ads.

After that a Media Agency is supplied with the ready ad and is fully responsible for distributing it to publishers and trafficking the ad by providing statistics and marketing results on how the ad performed.

So where is a Digital or Advertising Agency in this process now?

The aim of both Agencies is to produce digital ads and their names are used as an alternative.

The last agency left is AOR. When you look at the agencies above each of them takes part in this advertising process.

A few years ago, all of this has been done by one agency which is called an Agency of Record. AOR’s are full-series agencies which no longer operate or they do but just to some (very limited) extent. The idea of AOR is still valid for small firms and it depends on the industry, the client’s marketing needs and the product itself.

When being responsible for various areas of advertising, you can’t ensure you have experts in all your creative and technical departments who keep up with the latest technologies as well as handle the speed and complexity of all projects. Depending on a project a different agency is hired then. The clients no longer expect any agency to be excellent in everything they do and with a power of advertising, there is more and more demand for advertising.

Once a company I worked for, onboarded a new client who used to work with only one agency (AOR). Taking over their work and responsibilities was extremely difficult as many areas of projects were quite neglected and process was not followed.

Although AOR’s slowly tend to disappear, the best case scenario however is when a client treats all agencies as a true business partner and not a vendor. Then an exclusive and long-lasting partnership is built.

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