Clients’ fear of retainer model means agencies need to be ‘leaner’ says Sphere boss
Michael Abdul
Advertisers are becoming “petrified of a retainer” relationship with their agencies according to Sphere Agency founder Michael Abdul, who says he has reshaped his offering to take advantage of the project briefs coming to the table.
Abdul told Mumbrella the agency has spent the last 12 to 18 months remodelling the agency structure after realising it was no longer “relevant and effective and what clients actually need and want in terms of environment”.
“To be honest what we’ve been seeing and hearing for the last 18 months or so is clients are petrified of the old retainer model,” he added, pointing to moves by big brands to reevaluate their relationships.
Last month Schweppes pitched its creative agency roster, with the company’s general manager of marketing Troy McKinna telling Mumbrella the brand is re-evaluating not only the agencies it works with but how it works with them, saying its retainer model is not producing the right results.
It followed on from AMP Capital ditching its retainer model after a pitch in February, instead engaging digital and direct communications agency Apparent to work on campaigns on a project-by-project basis.
Abdul said the retainer model has “restricted clients from working with highly skilled, and readily available experts in their field”.
“What we’re seeing is many clients are looking for a hybrid model, one where they can tap into fresh ideas but also use a combination of agency resources alongside their internal resources,” he said.
“For us flexibility and agility is key and the retainer model sometimes can be restrictive.
“The question for us has always been how can we build a sustainable long-term model that appeals to clients and delivers results? How do we manage to deliver to full service clients without the security of a retainer in place?”
Abdul said they had reworked Sphere to operate in a leaner manner.
“Lean is the new normal. It no longer means you’re suffering. For us it means you’re working in a stripped back environment with a core team,” he said.
The agency has a core team of 14 full-time staff, with an extra four part-time staff, to deliver integrated ideas across creative, media and digital.
“We’re handpicking from a wider executional team to deliver components from that big idea. We’re able to tap into our network of best breed partners. From that point of view, from time to time we’ll tap into our own clients internal resources,” Abdul explained.
“The one goal is to deliver the big idea in the most efficient and effective manner.”
Abdul said the agency would continue to work with clients who were wanting a retained relationship.
“The retained relationship requires a flexibility to change in accordance with the fast-paced environment we’re living in,” he said.
Sphere is not the first agency to adopt the new leaner structure. Nigel Dawson and Randal Glennon formed Three Wise Men, which launched in August last year after forming alliances with a number of partners.
At the time they said the model gives the agency more flexibility and less risk as there is no overhead of having the agency partners under one stable.
Miranda Ward
Miranda Ward worked for Mumbrella from 2013 to 2017, eventually becoming deputy editor. Miranda joined Mumbrella in September 2013 from Sky News.
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That’s right. Nothing new here. I think every agency has different clients on a myriad of different remuneration models. It’s not rocket science.
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