I started my career at Naked Communications in Tokyo. It launched with a proposition that felt radical at the time. It would sell thinking without making. We were all Brilliant Misfits out to change adland for the better. So when I read articles by senior people who have left big agency jobs in the past year and declared the agency model broken, I recognise the story.
One agency veteran argued that agencies can no longer meet what clients expect of them. Two others found that almost all the clients they spoke to wanted the model rethought. Both pieces ended the same way, with the launch of a new agency custom-built to fix it.
None of this is new. The agency has been declared dead more times than a client has asked to make the logo bigger, and it’s still here, albeit struggling a bit.
I should say up front that their diagnosis is mostly right. Clients do complain about big, layered teams, senior people disappearing after the pitch, and fees inflated by everything surrounding the ideas rather than the ideas themselves. The research behind these articles reflects what we all know, and what anyone who has sat in a meeting wondering why half the people are there has seen firsthand.
What bothers me is the declared cure, a leaner, more senior agency, because that has been tried before. In 2020, a Forbes article described the agency model as costly, overhead-heavy and built around itself rather than the client. It argued that clients wanted fewer, more seasoned people who could get things done. Change the date and it could be one of this year’s launch announcements.
Naked Communications is a good example of an agency that thought it was the answer. And, up to a point, it was. It put communications planning on the map, growing into a network spanning Europe, Asia, Australia and the US, and was eventually sold in 2008. But by 2015, Naked had become yet another agency that made things. Clients still valued the thinking. It just didn’t pay enough to fund growth. Making things, not thinking, did.
That’s the problem these manifestos skip over. Agencies only grow by adding people. An analysis by Simon Bäckelin at Stockholm agency NoA | Åkestam Holst, tracking the financial results and balance sheets of 318 Swedish agencies year by year over nine years, found revenue rising in step with headcount, while margins didn’t improve and revenue per person fell as agencies got bigger. More people bring more overhead, more layers and more coordination, which is exactly what the start-ups promise to strip out. As far as I can tell, no one has cracked growth without bloat.
So the founders of these new agencies are walking into the same problem with a sharper diagnosis and, to a degree, the same answer: lean and senior. That works well while the founders can still be in every meeting. My bet is that once they can’t, any new model will start to look suspiciously like the one they left.
To be fair, having profited from a system doesn’t disqualify you from criticising it. It does entitle the rest of us to ask what will be different this time.
Whether they have the answer will show up in a few places. In how the new model makes money once thinking alone stops paying, because Naked’s answer was making, and theirs needs to be different. In how it grows without adding people, because if the answer is filling seats with lower-paid juniors, the evidence says it will drift back to where it started. And in who steps up to train the next generation. A senior-only agency will have no need for graduates, which sits oddly with founders who then blame the industry for years of poor training.
None of this means the new agencies will fail, or that their founders are the wrong people to lead the change clients need. The manifesto is simply the easy part. The hard part arrives when growth does, and it’s where every previous reinvention of the agency has come unstuck. These new agency leaders need to break the cycle the industry has been stuck in for decades. If they don’t, another wave of departing executives will be writing the same manifestos in ten years’ time, and someone else will be quoting this one.
