Middle-market companies need more business sophistication than CPG giants with leading-edge teams

As creative businesses, agencies naturally fixate on Web3, the metaverse, retail media, interactive ads, even AI, while the top 200 advertisers command their attention because they fund the most experimentation and highest production values. Yet agency growth depends on meeting the intensifying needs of the middle market, the growing swath of companies with challenger mindsets and revenues of between $100 million and $1 billion. With 350,000 companies, 53 million employees and more than one-third of the gross domestic product, they’re bedrock for the economy and our industry. 

Unlike big brands for which the conventional agency playbook was developed, middle marketers are often redefining their companies as they grow. They’re reorienting from manufacturing to marketing mindsets, inventing new ways to sell products, rapidly acquiring brands and perpetually repositioning to keep pace with their markets. And they’re doing it with fewer resources (data and people to do scenario planning) than established competitors. The upshot: Middle marketers can’t be wrong as often, afford any waste or justify an iterative strategy. They need to make fewer, bigger bets that pay off. To do it in the years ahead, they’ll need a new level of speed and orchestration to achieve systemic solutions. 

Often the real issue is designing an approach that will solve a complex business problem; what’s really needed is to organize around what will work on the many levels of B2B2C. For example, midsize brands that now dominate consumer products need agencies to supply more business sophistication than for CPG giants that have massive, leading-edge marketing teams and more established connections between distribution, retail, e-commerce and consumer research departments. 

These marketers’ need for business solutions that transcend communications disciplines will usher in critical shifts in what agencies provide and how we organize:

Solve the orchestration problem

As middle marketers hire more specialists, they need to manage more agencies. Yet they lack the resources to make everyone work together to solve more than audience capture; they’re already overstretched by the rising complexity of business, an avalanche of data and the intensifying demand of measurement. When they set up integrated agency teams, they exacerbate the overwhelm and invite competition. Agencies can solve the problem by orchestrating internally, either within one or several collaborating shops—so clients can hone business strategy rather than juggle resources.

Differentiate on business strategy

Rather than creative, the key service and differentiation will be business strategy—the understanding of clients’ businesses applied to interlocking components of marketing. Agencies need to solve for a multilayered business dynamic, not just an audience dynamic. It’s not enough to plan across the span of marketing communications. Agencies need to look through both customer and consumer lenses across the continuum of a client’s business, addressing product assortment, supply chain, distribution, packaging and promotion. 

Emphasize continuity—and make it count

Continuity is best informed by multifaceted teams that stay consistent across a client’s business. Teamwork over time broadens specialists’ vision beyond their individual crafts. So, a creative director intuitively relates to a client’s priority retail channels and customers. A media director incorporates trade marketing needs and programs into the strategy. And agency leadership helps frame the brand’s five-year business plan.

The industry has called for agencies to play a bigger game for several years now. The unmet needs of most marketers amid economic headwinds sets the stage for a higher-order expertise that business leaders can appreciate. Systemic vision also gives an agency more power in the critical components of marketing because its teams can approach creative, media, ecommerce, and promotion from the perspective of how each effort drives the total business. 

The next few years will be a crucial time for middle marketers. As they go, so goes our economy. Their need for a more complete, systemic approach to business building will create the new dividing line in the agency business. 

This article first appeared

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