The Rise of Specialty Agencies

Since the Mad Men era, the traditional agency of record (AOR) model has revolved around a full-service marketing agency that does everything from marketing and creative to workforce admin and data and legal services. While still relevant in today’s fast-paced and complex ad marketplace, an alternative has emerged from the one size fits all approach: the specialized agency. 

Specialized agencies have been around for decades. In the earliest iterations, some agencies began to focus on particular skills in advertising channels like print or television. Yet, as marketing channels proliferate, there has been an even greater need for specialization. In fact, in a 2023 survey from the World Federation of Advertisers, 47% of respondents said the need for specialized agencies will remain strong in the coming years. This signals brands’ clear intent to continue investing in agencies that have deep expertise in topical areas that materially impact business outcomes.

In a competitive field, the traditional AOR agency is often only as strong as their weakest department. In crowded, evolving marketing arenas, “you have to have specific technical expertise and have to be exponentially better … to get to the top,” Bill Peatman, senior content strategist at Alaniz Marketing, told The Drum.

Let’s get into the conditions that gave rise to the proliferation of specialized agencies, the benefits, and considerations for brands who want to make the most of their ad dollars. 

The rise of specialization  

There are several factors that have given agency specialization tremendous momentum over the last several years, including the impact of the pandemic and the economic uncertainties that followed. While early 2020 heralded boom times for some brands like Zoom and drove a shift in marketing strategies, it also highlighted gaps in expertise in certain marketing channels. The years that followed saw a market downturn that forced brands to make tough decisions related to their ad investments. 

Many advertisers had to identify what exactly it is they want from the agencies they hire. Whether it’s more creativity, skills in a certain channel (last year saw the first TikTok agencies of record announced, for example), increased value, or better market knowledge, advertisers looked to diversify agency partnerships to maximize campaign budgets, stay nimble, innovate, and keep up with the pace of evolution in those areas of specialization.  

Consumers move faster than brands, and specialized market knowledge is often necessary to stay agile and address specific challenges and goals. Psychologist Abraham Maslow once said, “If the only tool you have is a hammer, it is tempting to treat everything as if it were a nail.” Yet, today’s marketplace offers the possibility to apply the right tool for each unique situation—which can have a meaningful impact on business. 

The benefits of specialized agencies

Some key benefits of partnering with specialized marketing agencies include: 

• A dedicated team of experts. A team with dedicated knowledge in a specific subject matter contributes to more creative, adaptive, and effective campaigns that maximize budget.
• Media plan creation. Specialized agencies have a depth of experience and breadth of knowledge that non-specialists don’t. They can draw on previous work with hundreds of brands—including those similar to yours—to develop a plan grounded in real-world results. 
• Greater access to industry partners.  Specialization allows for deep industry relationships that aren’t typically matched by large AORs. In audio, this can lead to better media rates, more connectivity with the influencers, first looks at new content, and a greater ability to get added value for your campaign.

• High-performing creative. Specialists have experts in-house with knowledge and experience developing creative optimized for the channel and the way it’s consumed by users.
• Access to rich data pools. Specialized agencies tend to have more data related to their area of expertise than general AORs. This data can be leveraged to create more informed media plans that maximize returns. For example, ARM has been buying audio media for more than 25 years. With such a rich data pool, our audio experts can create media plans that beat typical market results by using AI to analyze historical results and build detailed plans that identify which brands, products, and services will work on which shows relative to specific KPIs. This abundant proprietary data yields maximum results from day one. 
• Optimization at scale.  With a sole focus on one channel, speciality agencies can not only pick up trends faster, but are nimble enough to make quick decisions to adapt and optimize the campaign to ensure maximum value. The use of proprietary tools relative to measurement, attribution, and real-time planning enhances this capability relative to their AOR competitors. 
• Innovation. Since these agencies are focused on one sector they have access to the latest software, platforms, and tools to boost your brand’s presence. 
• Precise measurement. Marketing measurement continues to be a complex and, at times, confusing endeavor. Coupled with the various nuances on how the disperate ad channels are measured, it can be overwhelming for marketers to understand. It’s important to work with partners who understand the ad medium well enough to ensure the campaign is not only being measured in the correct way, but the results can be communicated clearly and in a way that is actionable and ties into the rest of the marketing mix.  

Is a specialized agency right for you? 

There are advantages that come with both specialized and more general approaches to marketing services. Partnering with AORs can be optimal for businesses prioritizing a centralized approach to marketing management and those that do not have sufficient staff to manage the multiple reviews, contracts, and invoices that result from partnering with several specialized agencies. The drawback is that agencies that do everything tend to not be great at anything.

Alternatively, if your brand is looking to maximize growth and campaign performance within a specific channel or portfolio of channels like audio, it is ideal to work with agencies that understand the nuances, unique audiences, platforms, technology, and industry partnerships of that channel—while also anticipating what’s around the curve. 

No matter which path you choose, make sure that the agencies that you partner with are willing to develop a deep understanding of your business, making time for the conversations and collaboration necessary to develop campaigns with impact. With consideration for where the business is today, and where it is headed, your partners can then carefully consider solutions to propel you forward. 

At ARM, we’re proud to function as extensions of our partners’ in-house teams, providing high-touch customer service alongside unmatched industry knowledge. We believe that the medium of audio requires its own unique message, and we know how to break through the noise. Want to know more about our approach? Let’s talk.