More clients are opting for project-based collaborations with agencies over long-term retainers.

As this trend gains momentum, we sought to understand whether this impacts brand building in the long run and who is to ‘blame’ for this shift.

Navin Talreja, founding partner, The Womb Communications and Gautam Reghunath, co-founder and CEO, Talented, share their thoughts.

Why are we seeing more clients looking for short-term projects?

Navin Talreja (NT): The shift towards short-term projects is driven by multiple factors.

1. In boardrooms, long-term brand value is not being discussed as often as it should be. This has pushed CMOs and their teams to focus more on short-term metrics rather than investing in long-term growth.

2. Brands today operate in an environment of rapid change, where market dynamics, consumer behaviour, and trends evolve quickly. This has created a landscape where clients feel they can cherry-pick expertise based on the ‘metric of the month’.

3. CMO tenures are becoming shorter, leading to the deprioritisation of KPIs focused on long-term brand value.

4. The proliferation of hyper-specialised agencies promising overnight results at rock-bottom costs has further contributed to this shift.

Gautam Reghunath (GR): New market realities indicate that the days when agencies could build themselves by renewing multiple long-term, high-value retainer contracts are a fading memory. Creativity has staged a populist revolt. Clients are no longer captive to agencies and have a buffet of options beyond traditional agency models. Agencies have also tended to treat retainers like subscription businesses we renew every year, so unless we’re adding serious consistent value, it makes no sense for clients to stick to this model. It’s a buyer’s market.

Is brand building and effectiveness affected due to short-term projects? How does the shift from long-term retainers to project-based work impact a brand’s overall marketing strategy and consistency?

NT: Short-term projects can dilute the consistency of a brand’s messaging and identity. Brand building is a long-term game. It requires sustained effort, and consistent communication, backed by strong insight and a cohesive strategy to resonate deeply with audiences. According to a study by the Institute of Practitioners in Advertising (IPA), brands that maintain the same creative agency within five years produce higher creative quality and grow their advertising distinctiveness. Similarly, brands that allow creatives to wear in produce higher-quality ads. Last but not least, brand building is a team sport. Short-term projects do not foster the creation of great agency-client teams.

GR: The sentimentalists will throw the ‘brand building’ chestnut, arguing for long-term relationships as some sacred marketing covenant. There’s some truth in it, but brand building is no longer just the agency’s prerogative either.

What would you rather work on? Why?

NT: I find long-term retainers more rewarding. They allow for a deeper understanding of the business, the brand, its objectives, and its consumers. This depth of engagement leads to more meaningful work that aligns with the brand’s long-term vision and builds business. With retainers, agencies have the time to experiment, refine, and build marketing programs that change behaviours and deliver consistent business growth. On the other hand, short-term projects can be exciting because of their intensity and focus, but they often lack the opportunity for sustained impact. That said, we occasionally take on projects when we find the challenge or the opportunity exciting. Sometimes we also do projects basis personal requests because, in the end, we are in a relationship business.

GR: There’s a reason why, as much as we love long-term brand retainers, we have equally embraced the project model. It demands a job-by-job focus on margins and they have kept us on our toes commercially. We are able to assign internal teams sustainably and show agility by bringing on external partners. We can truly sense our creativity and add more value by being able to focus more on sharper brand problems and less on insignificant daily output. More often than not we finish these projects with a sense that the pricing model fairly reflects both our effort and the outcome. The proof is in the numbers: approximately 75% of our project clients return for additional work, validating our approach.

How does either of the approaches affect the agency’s financials?

NT: From a financial standpoint, long-term retainers provide stability and predictability. They allow agencies to plan resources, manage overheads, and invest in talent confidently. Retainers also create an environment where agencies can focus on quality and innovation without constantly chasing the next project. That is why, we have consciously limited projects to about 10% of our revenue. While individual projects may be profitable, the unpredictability makes it harder to forecast revenue and allocate resources efficiently. Agencies may also experience talent burnout as they frequently ramp up for projects with tight timelines. This model can lead to a more transactional relationship with clients, which might not always align with the agency’s goals for creativity and impact.

GR: In a project model with room for shorter-duration projects - there’s plenty of room to monetise. To put it simply, you can take your profit margins off the top at the beginning and cost accordingly. Unlike bloated retainers, these shorter engagements allow for higher-margin deliverables because the output expectations are crystal clear. Historically, agencies have sacrificed our business model for a surety of 12 months of predictable revenue. But that ‘surety’ often masks deeply unprofitable arrangements when retainer terms aren’t ruthlessly negotiated. The collateral damage is severe: eroding talent respect, accelerating burnout, and reducing creativity to a commodity. The irony? Obsessing over client retention has paradoxically created unsustainable margin pressure through mounting indirect costs. We’re essentially penalising ourselves for a misguided loyalty to predictability over profitability.

We are seeing more brands going the in-house route. Is this one of the reasons for clients looking for agencies only for projects and is this ‘in-housing’ a growing and concerning trend?

NT: New models have always evolved and will continue to evolve as market dynamics change. Every client faces unique marketing, organisational, and financial challenges that guide their choices between short-term projects, in-housing, or long-term retainers. Our job as agency leaders is to stay honest to our work and capabilities, continuously evolve our offerings, and remain indispensable to our clients. When we do this well, there will always be willing partners ready to work with us.

GR: We’re huge fans of brands with their own in-house teams. We love working with creative people. The more the merrier. Advertising is a team game.

(This article first appeared in the January issue of Manifest, part of the monthly Perspectives feature. Buy the copy here)