The agency model was built for a different era. It was designed for a world where the primary challenge in communications was production: creating enough content, securing enough coverage, distributing enough messages to break through in a competitive market. In that world, agencies functioned as execution engines, and the value they delivered was measured by volume and velocity. The more they produced, and the faster they produced it, the more valuable they appeared. That model made commercial sense when production was the constraint. Production is no longer the constraint. The structural problem with the activity-based agency model is not that it delivers nothing. It is that it delivers the wrong thing while creating the appearance of delivering the right thing. A client who receives monthly reports showing press coverage secured, posts published, and impressions generated feels that their communications is being managed. What they are receiving is evidence of activity, not evidence of progress toward the actual communications objective, which is not coverage or impressions but a measurable shift in how their target audiences perceive and understand them. These are not the same thing. Confusing them is expensive. David Maister, one of the most influential writers on professional services, identified this distinction as the central fault line in advisory relationships. In The Trusted Advisor, co-authored with Charles H. Green and Robert M. Galford in 2000, Maister described the spectrum between what he called “service providers” — who deliver what they are asked — and “trusted advisors” — who understand the real problem behind the request. “The most successful advisors,” Maister wrote, “are not the ones with the deepest technical knowledge. They are the ones who understand their clients’ businesses well enough to know when the brief they have been given is the wrong brief.” The majority of communications agencies operate as service providers. They deliver what they are asked. The brief is rarely examined. The underlying problem is rarely diagnosed.

Gartner’s annual CMO Spend Survey has tracked marketing and communications investment patterns across large organisations for more than a decade.

Gartner’s annual CMO Spend Survey has tracked marketing and communications investment patterns across large organisations for more than a decade. Its 2023 edition found that communications and marketing leaders rated “demonstrable impact on business outcomes” as their most important unmet need from agency relationships, ranking it above creativity, speed, and cost. The finding suggests that even the clients of agencies are aware that the activity-based model is not delivering the value they need. The gap between what agencies are producing and what clients are actually trying to achieve is both widely felt and rarely addressed at the structural level. Tim Williams, founder of Ignition Consulting Group and a leading authority on agency business models, has argued for years that the fundamental problem in the agency industry is the hourly-rate model, which makes agencies structural optimists about volume. “If you price by the hour,” Williams writes in Positioning for Professionals, “you have a financial incentive to do more work, not better work. The client pays for time, not for thinking. And the most valuable thinking, the kind that prevents you from doing the wrong work in the first place, takes the least time to produce but is the most poorly rewarded.” The billing model and the strategic incentive are misaligned. Most clients have not examined this misalignment. They have simply continued to pay for more of the thing that is not working. The alternative model, which the most sophisticated communications clients are increasingly demanding and the best advisors have always offered, begins at a different point. It begins not with “what do you need us to produce?” but with “what are you trying to achieve in the minds of your target audiences, and what is currently standing between you and that outcome?” That is a diagnostic question. It requires the agency to spend time understanding the client’s actual communications problem before proposing any solution. It requires honesty about whether the client’s current positioning is working. It requires the willingness to tell a client that what they have asked for is not what they need, and to back that assessment with strategic reasoning. This kind of relationship is rarer than the industry acknowledges. The Harvard Business Review, in a 2021 analysis of long-term agency-client relationships, found that the engagements with the highest reported business impact shared three structural characteristics: they began with a formal discovery and diagnosis phase before any execution was attempted; they included clear, agreed definitions of what success looked like in terms of audience behaviour change rather than communications activity; and they assigned senior strategic responsibility, not account management responsibility, to the relationship on the agency side. The majority of agency relationships have none of these characteristics. They begin with a brief, proceed to execution, and are measured on outputs. The practical consequence of this mismatch is an organisation that is highly visible in the metrics and largely invisible in the minds of the people who determine its success. Coverage is generated but not converting. Content is produced but not building authority. The budget is spent, the reports look professional, and the strategic position has not moved. Six months in, both client and agency are frustrated without being able to clearly articulate why. The why is almost always the same: the activity was not connected to a clear diagnosis of what the communications was trying to achieve. And the diagnosis was never conducted because the relationship was structured to skip it. The organisations that build durable communications positioning are not necessarily the ones spending the most. They are the ones that insisted on doing the diagnostic work first. They identified with precision what shift in perception or understanding they were trying to produce, in which audiences, over what timeframe. They built their agency relationship around that objective rather than around a content calendar. And they measured success by asking, at regular intervals, whether the perceptions they needed to shift had actually shifted, not by counting the outputs produced in the attempt. The question every organisation should be asking of their current communications agency relationship is simple but demanding: are we clearer, to the specific audiences that determine our success, about what we stand for and what we offer than we were six months ago? If the answer is yes, the relationship is working. If the answer is no, or worse, if you cannot find the metric to answer the question because the relationship was never structured around that objective, the problem is not the quality of the agency’s execution. The problem is that the relationship is structured around the wrong question. And restructuring it begins with insisting that the right question be asked first. The practical question that follows from this analysis is how to restructure an existing agency relationship that has been built around activity rather than strategy. The answer is not to fire the agency and start again, although in some cases the relationship is too entrenched in its existing dynamic to be restructured from within. The answer, in most cases, is to change the brief. Specifically, to insist on a formal discovery and diagnosis phase before any subsequent work is commissioned: a structured period of inquiry in which the agency is asked to investigate and report on how the organisation is currently perceived by its target audiences, what the specific gaps are between that perception and the perception the organisation needs, and what the communications strategy should therefore be designed to achieve. This phase resets the relationship from execution-first to strategy-first. It also reveals, quickly, whether the agency has the strategic capability to work in this way. Many do not. The ones that do are worth keeping. The accountability framework that should govern any strategic communications relationship is similarly specific. The key performance indicators need to be shifted from activity metrics to perception metrics. Rather than measuring the number of press releases distributed or the number of posts published, the relationship should be measured against specific, agreed shifts in how target audiences perceive and understand the organisation. These shifts need to be measurable, which requires baseline research at the outset of the relationship and tracking research at agreed intervals. This kind of measurement is more expensive and more demanding than a monthly media report. It is also the only honest measure of whether the communications is working. Activity metrics measure effort. Perception metrics measure impact. The first tells you how much was done. The second tells you whether it mattered. There are specific red flags in agency relationships that indicate the fundamental structure is wrong regardless of the quality of the individual output. The most significant is what might be called the “brief acceptance problem”: when an agency receives any brief from a client and proceeds immediately to execution without questioning whether the brief reflects the actual strategic need. An agency with genuine strategic capability treats every brief as a hypothesis to be tested rather than an instruction to be followed. They ask why this brief, why now, what problem it is designed to solve, and whether the solution proposed in the brief is actually the best response to that problem. The agency that asks these questions occasionally frustrates clients in the short term. In the medium term, it is the only agency that produces outcomes rather than activity. The honest assessment most organisations need to make about their communications is whether they are buying thinking or buying production. Both are legitimate. Both have appropriate price points. The mistake is paying thinking prices for production work, or expecting thinking-level strategic outcomes from a production-model relationship. The shift in the market, driven partly by AI making production cheaper and faster, is creating pressure on agencies to compete on strategic value rather than execution volume. The clients best positioned to benefit from that shift are the ones who have already restructured their agency relationships around strategic outcomes, so that when an agency arrives with genuine strategic capability, they know how to use it.