CPG Marketers Should Rethink Their Agency Models to Keep Up With the Changing Times

Hey CPG marketers, we see you. Your job is harder than it has even been before and with more money on the line. In 2023, CPG brands spent more than one quarter of their overall budget on marketing. CPG marketing has turned into a more complex and layered puzzle. You're trying to grab attention on the shelf, on TikTok, and get in good with both kids and parents. Not to mention how macroeconomics and even GLP-1 weight loss medication are impacting the market. Consumers are more savvy, they expect more from the brands they support, and are bombarded with brand messages across multiple channels, all while being more distracted. So what’s a CPG marketer to do?

For starters, maybe it’s time to rethink your advertising and marketing partners. CPG brands have traditionally been the anchor clients for large advertising agencies. Million dollar accounts with teams of dozens to help support all aspects of advertising and creativity — from account management, to media buying, to creative, packaging, design, experiential and everything in between. These large conglomerates serve a purpose, but oftentimes clients get trapped with a revolving door of team talent, having senior executives who pitched the business disappear to deal with other new business and overall getting stuck in the slow process of meetings after meetings and deck after deck with little action.

The new world of CPG marketing requires a different type of partner for advertising and marketing support. A team that is quick, nimble and small. A team that was built specifically for your business challenge based on their expertise, and not just made up of whoever is available. There are a variety of new companies that offer this more bespoke service, whether you're looking to lock in a specialized partner, whether that be naming, packaging, sonic branding, or more of a network model where the best talent is brought in to help on bespoke tasks rather than kitchen sink model.

These smaller agencies and network models have the advantage of much lower overhead, minimal layers and access to exceptional talent, which translates to cost savings and sharper output. They can also move fast, which is a necessity when you're trying to keep up with rapidly evolving consumer preferences. Think days and weeks instead of months and even years to the answers. When the right talent with the right experience is on the case, CPG brands should expect ideas and results in a fraction of the time. In these models they only pay for the top talent — not for the junior execs who are learning and need everything reviewed, taking up valuable time and manpower.

Lastly, the age-old agency of record (AOR) is dying a slow death. Problems are getting more diverse and complicated. Timelines continue to shorten. In-house teams are becoming more capable and proficient. Client access to senior brains with the experience to solve problems quickly is and always has been at a minimum. CMOs have a full hat rack of different caps to wear on a daily basis. Yet the model of signing a seven-figure contract with a bloated team structure and a semi-fixed scope for 12 months continues to be the norm. As the AOR model trucks along blindly, network models and other project-based consultancies are listening, swimming with the current of progressive client needs, and will undoubtedly disrupt these heritage models.

So before you sign away millions of dollars for a huge AOR, see if there are some smaller fish that better fit your needs. The guarantee is they’ll be faster, less expensive and deliver great value for the dollar. Feels like reason enough to fish in that pond.

Brett Banker is the co-founder of X&O, a new approach to marketing with big ideas, at pace.