The death of the long-term agency contract

Opinion

Brands have pivoted towards projects when it comes to creative work. But media agencies should not assume they are safe. The seeds of a more transactional mindset are already visible.

The collapse of the long-term agency contract is hitting creative shops across the UK hard. Every agency leader I speak to is feeling the tremors and it has become the harsh new reality of doing business.

Brands have lost patience with bloated retainers, layers of bureaucracy and creative that too often flatlines once the mega-excitement of the initial pitch fades.

Instead, they are pivoting towards project-based models, treating agencies more like agile partners to be engaged and disengaged on demand, rather than permanent fixtures collecting a monthly fee.

It is hard to argue with the logic. Culture moves at a frightening pace, with trends turning stale in a matter of days. Audiences are unforgiving, the creator economy is a relentless juggernaut and brands know they must stay culturally sharp or risk irrelevance. Creative work has to flex and pivot almost overnight.

The idea of being tied to a 12-month agreement with the same agency feels not just restrictive but actively dangerous if the wrong partner is in place. A tempting mix of fewer fixed costs and faster cultural response feels, at first glance, like an obvious win.

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Appetite for stability… for now

At the moment, this disruption is mainly playing out in creative.

Media agencies still control enormous budgets and complex supply chains, with brand safety, data and compliance requirements that do genuinely benefit from long-term continuity.

There is more appetite for stability in media and switching partners overnight is no small feat when you are dealing with multimillion-pound spends across multiple markets.

But media agencies should not assume they are safe. The seeds of a more transactional, transient mindset are already visible.

Planning and buying have become simpler and more transparent thanks to technology, while performance-based KPIs have made it far easier for brands to scrutinise what they get for their investment.

If outcomes that matter to chief marketing officers — or, more accurately, their chief financial officers — can be tracked and optimised in real time, why commit to a year-long contract to achieve them?

And if automated platforms can handle much of the execution, why not commission media strategy on a project basis, just as brands increasingly do for creative?

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Canary in the coal mine

It is not far-fetched. Strip away the mystique around media buying and it is fundamentally a service — and services are fair game for unbundling.

Clients will increasingly ask why they cannot keep a slim strategic partnership and then bolt on the right specialists as needed.

And, in a worst-case scenario for agencies, media buying itself could devolve into an AI-powered software-as-a-service platform, removing the human agency layer altogether.

If procurement can buy media from a dashboard with a monthly software licence, they probably will.

Creative is the canary in the coal mine. Its pivot to project-based relationships shows how fresh thinking and cultural relevance can be delivered through transient partnerships, but it also exposes the cracks.

There is a real danger that media could follow, especially as brands grow more confident in demanding flexibility, speed and relentless accountability from their agency relationships.

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Sword of Damocles

Yet this is where marketing science matters.

The evidence is clear — from Les Binet and Peter Field to decades of IPA effectiveness studies, we know that long-term brand-building consistently outperforms short-term tactics.

Walking away from embedded strategic partnerships may seem efficient, but it risks tearing up everything we know about how brands grow. Neglecting consistency and institutional knowledge is more than a procurement issue; it is a strategic own goal.

The lure of short-termism is powerful, but it leaves a Sword of Damocles hanging above any brand that ignores the proven impact of long-term investment.

For agencies, whether creative or media, there is no hiding place now. They will have to earn their place again and again through the consistent quality of their work and the outcomes they deliver.

Some will thrive on that adrenaline. Others will struggle without the predictable revenue that the old contract model provided.

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Balancing act

For brands, there is a delicate balancing act. The pull of flexibility and faster responses must be carefully weighed against the loss of brand memory, deep challenge and strategic coherence.

Perhaps the answer lies in a hybrid structure: a streamlined strategic retainer to protect brand consistency and institutional knowledge, combined with flexible project budgets to move quickly when opportunity strikes.

Either way, the old contract model is done. There is no appetite to fund complacency or second-rate thinking. Brands will demand clear results, not hopeful promises, and they will not hesitate to move on if agencies cannot deliver.

If you are working in media, pay close attention to what is happening in creative. It might well be your future too.

Graeme Douglas is co-founder and chief strategy officer at Bicycle