{"id":157366,"date":"2025-03-26T08:23:02","date_gmt":"2025-03-26T08:23:02","guid":{"rendered":"https:\/\/peraltafinancing.com\/advertising\/luke-bristow-why-most-agencies-are-built-to-fail-challenger-brands\/"},"modified":"2025-03-26T08:23:02","modified_gmt":"2025-03-26T08:23:02","slug":"luke-bristow-why-most-agencies-are-built-to-fail-challenger-brands","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=157366","title":{"rendered":"Luke Bristow: why most agencies are built to fail challenger brands"},"content":{"rendered":"


\n<\/p>\n

\n

The traditional agency model is no longer fit for purpose. It\u2019s rigid, fragmented, and built for a world that doesn\u2019t exist anymore.<\/p>\n

While big agencies still focus on servicing legacy brands, the real momentum is happening elsewhere. Challenger brands are disrupting categories, out-punching incumbents, and scaling from early traction to dominant players faster than ever before.<\/p>\n

But these brands require a completely different approach.<\/p>\n

They often operate with leaner budgets \u2013 typically \u00a31m or less per year in media spend \u2013 and need every pound to work harder. There\u2019s no margin for vanity campaigns or ineffective media. Growth-stage brands need precise, efficient marketing strategies that fuel acquisition while laying the foundations for brand equity.<\/p>\n

For agencies, this requires a model shift \u2013 one that focuses on commercial outcomes, not just service hours. 2025 is built for Davids, not Goliaths<\/p>\n

Right now, the conditions for challenger brands to break through are stronger than ever.<\/strong><\/p>\n

\"\" <\/p>\n

Post-pandemic, consumer habits have shifted for good. Value is king, and shoppers are leaning toward small or independent brands. Direct-to-consumer sales are surging with Shopify reporting they now make up 44% of brand transactions, while traditional retail\u2019s dominance weakens.<\/p>\n

At the same time, Gen Z and millennials are ditching legacy brands in favour of disruptors. Media is fragmenting, too with TV no longer dominating brand building. Instead, platforms like YouTube, TikTok, digital OOH and connected TV offer high-reach, cost-effective ways to scale.<\/p>\n

Meanwhile, AI has revolutionised creative production. What was once exclusive to big brands is now accessible to all \u2014 AI-generated assets, automation, and self-serve ad platforms are levelling the playing field. Put simply, it has never been easier \u2013 or cheaper \u2013 to take on incumbents and win.<\/p>\n

But this only works if media strategies are built differently, not just copied from the rulebook of mature brands. So how can media agencies adapt to better serve challenger brands?<\/p>\n

Burn the timesheet<\/strong><\/p>\n

Challenger brands don\u2019t care about billable hours \u2013 they care about results. Yet most agencies still charge based on effort, not impact.<\/p>\n

This is outdated. Agencies should be incentivised by commercial performance, not just media execution.To align with this reality, agencies should structure deals that link fees to customer growth, revenue, or contribution margin. They should offer commercial upside for outperformance. And ideally should use incrementality testing to ensure media investment is driving real business impact.<\/p>\n

Agencies need to be growth partners, not cost centres.<\/strong><\/p>\n

Your best planner wants to work at a startup. Agencies aren\u2019t just competing with each other for talent anymore\u2014they\u2019re competing with tech, in-house teams \u2013 and startups.<\/p>\n

The old model of paying media planners a salary and expecting loyalty is broken. The best operators want profit-share or equity incentives and clear ownership of outcomes and visibility on client commercials, not just their media impressions. There\u2019s also a desire for genuine career pathways and the ability to see the impact of your work on the company you work for.<\/p>\n

If agencies want to attract the best, they need to offer more than just salaries.<\/p>\n

*Stop paying agencies to press buttons
*The agency role is changing \u2013 and if you haven\u2019t noticed, you\u2019re already behind. Execution is being pulled in-house. Strategy is up for grabs.
*Brands aren\u2019t looking for media buyers. They\u2019re looking for partners who can outthink the competition, not just outbid them on Meta.
*Agencies need to own category-shaping thinking, not just campaign management. They need creative direction that actually converts, not just repackaged brand decks. And they must deliver growth frameworks and data models that provide clients with real answers, not just reports.<\/p>\n

If your agency can\u2019t sit at the same table as a founder, CFO, or investor and explain how your plan grows the business \u2013 not just the impressions \u2013 you\u2019re not a partner. You\u2019re a line item. The best agencies today are leaner, smarter, and closer to the money. The rest are waiting to be replaced.<\/p>\n

AI should save you time, but also make you money<\/strong><\/p>\n

AI is already reshaping agency workflows, but most are using it for surface-level automation such as copywriting, audience insights and reporting. The bigger opportunity? Apply an AI-powered strategy. Use AI-driven media mix modelling (MMM) to predict the real-world impact of media spend. Carry out incrementality testing, running structured tests to prove what\u2019s actually driving growth. <\/p>\n

And apply creative optimisation using AI-powered tools like Midjourney<\/a> to reduce production costs while maintaining quality. No AI tool can replace strategic thinking, but the agencies that combine human creativity with AI-powered efficiency will be the ones that win.<\/p>\n

ROAS (return on adspend) is not a strategy<\/strong><\/p>\n

Too many agencies are giving challenger brands bad advice. They either shove them into a low-risk, low-reward performance-only rut or convince them to blow their budget on brand campaigns before they\u2019ve nailed product-market fit. Both approaches are not only lazy but dangerous too. Why? Because they have cash flow realities, early adopter saturation, and distribution challenges that mature brands don\u2019t face.<\/p>\n

Challenger brands don\u2019t have the luxury of waste. Every media pound needs to earn its keep \u2013 not just look good in a deck. What\u2019s needed is a more commercially intelligent model that adapts to the reality of early-stage businesses. Brand and performance need to work together, not be fighting for budget. Real-time media planning needs to evolve with LTV, CAC<\/a> and growth stage. And there needs to be a strategy that prioritises profitable growth \u2014 not just reach, clicks, or fame.<\/p>\n

The answer isn\u2019t Byron Sharp or last-click ROAS. It\u2019s balance, nuance and context.<\/p>\n

\"\"Luke Bristow is CEO of media agency MNC<\/a>.
<\/em><\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":"

The traditional agency model is no longer fit for purpose. It\u2019s rigid, fragmented, and built for a world that doesn\u2019t exist anymore. While big agencies still focus on servicing legacy brands, the real momentum is happening elsewhere. 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