Hey everyone, I hope you're all saying healthy and safe. I'm thinking a lot about the people who are sick, and the people who are on the front lines. I also know a lot of healthcare workers and people who work at grocery stores who are on the front lines, and I'm reaching out to them daily to see if there's any way I can make their lives easier right now. And like you, were all sitting around wondering what the world is going to look like moving forward. So stay tuned for that. And this episode we recorded at the end of February, just when we were all realizing the magnitude of all this. It's a special episode for me, and I think it will be for all of you. Jeff Silverman is a marketing consultant and an ad hoc CMO. And we'll talk more on that later. Jeff is one of those people who always has a laser sharp insight into things happening in the marketing world. He and I talk a lot and every time we do, I've learned something. And I usually think ah, I should be recording this. So I finally did. And in this episode, we talked about the trends of consultancies and agencies. That's something you ought to listen to. Jeff even wrote a fantastic piece on it. You can review it for free on our website. It has data to back up his ideas. Jeff also talked about the changing roles of CMOs and what agencies must do to survive. You're gonna love this episode. I know I did. Welcome to Marketing Upheaval by Creative Outhouse.
Welcome to Marketing Upheaval. My guest is Jeff Silverman, Principal of Silverman 1 Consulting. Jeff has had a long and successful career as a strategist and brand expert, and his work with every kind of company from Global 2000 to startups. He's also seen the client and agency side. Jeff has worked inside organizations as an ad hoc CMO, and he's someone I turned to, when I need to know what's happening out there. His insights are usually different than most people's I talked to. Also, he's usually right. Today we're going to talk about agencies versus consultancies and the future of CMOs. Thanks for joining me, Jeff.
So the first thing we've talked a lot about is the changing nature of marketing. And we both grew up in a traditional ad agency culture, and structure. So let's start there. You've worked on both sides, agency and client. So what are the general trends you see on the agency side?
When you look at the United States, everybody in his brother can be in the agency business. There are 14-15,000 advertising agencies and as many as 40,000 marketing service firms. When you count things like media buying companies, PR firms, digital shops, it's a category where there's only now organic growth, that's kind of the equivalent to CPI. It grows 1-2% a year. Maybe a little bit more when you count in digital, but digital is still now low growth. It's become more commoditized than ever. Because most all these agencies are still chasing, you'd say the same type of client mix with the same service offering and procurement on the client side. They're great at negotiating agencies down in terms of their rates, their compensation, there's no more margin left in the business. And one of the challenges I think, for agencies is, it's very difficult for them to invest in innovation to develop new offerings.
Full transcript here.