Throughout the advertising industry, there is a continual fear that the traditional agency of record is going by the wayside. Indeed, as brands both pivot to more project-based work and develop their own internal teams or in-house agencies, there is legitimate concern about the future of the AOR.
Last year, Budweiser officially moved away from its AOR model, and more work created by in-house agencies (Google had ads in this year’s Super Bowl) is becoming more commonplace. Additionally, according to the Association of National Advertisers (ANA), 78 percent of its members reported having some form of an in-house agency in 2018, up from 58 percent in 2013 and 42 percent in 2008.
“Traditional agencies are becoming increasingly challenged as marketers move more work in-house while encouraging their external agencies to provide differentiated services and increased value,” said ANA CEO Bob Liodice in a statement last October. “We expect the current trends to continue, with accelerated client movement to in-house agencies.”
Yet recently, Kroger, the nation’s second retailer with more than $122 billion in annual sales, announced that it is seeking its first-ever creative agency of record. The company, based in Cincinnati and founded in 1883, sent out its first RFI about two weeks ago that includes, according to Mandy Rassi, Kroger’s head of brand building, a range of creative agencies.
“We’re considering larger firms and independents,” she said. “What we’re really trying to do is make sure that we’re casting a [wider] net to consider all of our options.”
What makes the Kroger brand an enticing opportunity for a creative agency is the sheer breadth of the brand itself. In addition to its own banner, Kroger owns more than a dozen well-established local and regional brands across the country including Ralph’s in California, Fred Meyer and QFC in the Pacific Northwest, King Soopers in the Rocky Mountain region, Mariano’s in Chicago and recently-acquired Harris Teeter in the Carolinas.