Agencies: Change or Die
May 6th, 2008 by Jeff LanctotTags: Agencies, Change, Technology
I’ve recently listened to and participated in several conversations regarding the evolving role of the ad agency. Most marketers and agency types seem to agree that a radical change is necessary. I agree, but I think that change is going to be a harder one to make than many realize.
For many agencies, incremental change feels comfortable. It tacitly acknowledges the greatness of days gone by. It politely suggests that they can get even better. It gently nudges the business forward. The leisurely and familiar pace with which agencies change is also the very thing that threatens their future.
The most effective agencies must live squarely at the intersection of marketing and technology. They should be sprinting to that intersection. Not just digital agencies, but all agencies. As all media becomes digital, any agency that doesn’t view itself as a technology company should commence reflecting fondly on the good ol’ days. The road ahead is likely to be significantly less fulfilling.
Agencies need to make this shift in order to not just lead, but to stay relevant at all. The most engaging customer experiences will be created by designers working collaboratively with developers. The most powerful campaigns will be delivered by creatives that embrace social networks and media planners that understand auction theory. And the most successful agencies will rely on data platforms that give marketers a single view of the customer across all marketing touchpoints. Increasingly, technology is inexorably linked to marketing.
Of course, consumers have already rushed ahead, embracing new technologies without the apprehension and hand-wringing that has marked agency dalliances with the digital world. From Tweens to Seniors, consumers are sharing, publishing and collaborating. They are the new voice of authority in the marketing world- a voice that once exclusively bellowed from the windows of Madison Avenue. Just as they must embrace the role of technology in the business of marketing, agencies must now view customers as colleagues. The passive “target audience” of yesterday is now an active participant in shaping how brands are perceived.
There’s no middle ground for today’s agency. Make small, incremental changes and comfortably drift toward a date with irrelevance. Or make the hard choice to radically reinvent the industry, with the promise of becoming more valuable to marketers than ever before.
8 Responses to “Agencies: Change or Die”
Wow. Great post! The internet has either rendered much every form of media virtually obsolete or has forced them to adopt the internet as their new distribution channel.
Television and print are now both web based, even telecommunications is shifting into the cloud (see Skype). In the case of Skype there has even been some recent talk on GigaOM (http://gigaom.com/2008/05/06/global-telcos-plotting-a-skype-rival/)
about the telcos making a serious move into this industry. Everything will gravitate to the medium with the highest reach, most engaging experience, and lowest cost and that is the web.
You’re right in saying that any agency that exists needs to shift in the direction of the web and it’s accompanying technologies, or else what are they marketing with? They might as well be producing radio advertisements.
Oh and the back end on this blog is messing up submitting my entries and giving me back my text with \ in them for escaping the single quotes in MySQL.
I agree Jeff, and would add that as well as becoming intimate with technology, agencies (and their clients) have to become intimate with their customers - those who are or may buy the products they market. This is a major shift that I’m not sure most folks have gotten their head around. It’s one thing to make great marketing and then drive it down a distribution channel to the market. It’s quite another to engage with your consumers in real time, at scale, supported by technology and new business practices/organizational structures. That is truly, as you put it, a radical reinvention of the industry
The most radical changes I’ve noticed in *interactive* agencies recently is how they’re being folded back into their parents: Starcom, Universal McCann, Mindshare — there will undoubtably be more. In these shops, digital media simply becomes another group in the “traditional media department”. Putting this tech-marketing DNA back into the parent should help them stay relevant (as TV continues to lose viewers and print continues to lose subscribers).
Great post. Think there is another aspect to this: Communication. Silos made agencies profitable. Creative. PR. Planning. Account Management. etc. Each group was a profit center and each discipline had discrete responsibilities.
The web continues to expose the distance between these silos. The agencies that get good at communicating across functions and working as a cohesive team rather than independent disciplines will experience success. The agencies that remain focused on these operational silos will find competitors dancing around them. This isn\’t just about offline/online. It is about Search Keywords, SEO, Site Creation, Rich Media, word of mouth, etc.
I agree even if based on my limited experience in the advertising community. I\’m developing a Web 2.0 type site for luxury resort travel market called http://www.lifesaresort.com Yes, it is a competitive market and barriers to entry might be low, but we have other plans that will integrate back to our site and will drive a very targeted audience to visit our site using a unique push-pull strategy.
Getting back to your message, the few agencies I\’ve contacted in S. Calif. to at least introduce our site and seek insight or input, if only to see how we can make our site more value to agencies\’ advertising clients, seems to have fallen on deaf ears or deer facing bright lights in a dark forest. Yes, our platform is basic, using Marc Andreesen\’s and Gina Bianchini\’s Ning social media platform, but if the feature / front cover article in Fast Company (May 2008), is correct, we\’re on to something (we committed to Ning months ago before the article).
It does seem stange though that I have less than 6 months experience in the ad world (come from fashion manufacturing) but more excitement for digital media than some of the ad agency people I\’ve come across. Perhaps my ignorance on how the ad agency industry works
is more of a benefit than being experienced and scared that life as it used to be (traditional ad agency work) will never be the same.
We will just keep plugging forward and when resorts and travel services contact us directly (which many already have), bypassing their ad agencies, it does say something about their agencies.
I\’m glad I found you and your blog through Mixpo. They seem to get where digital video is going.
Ning is an excellent platform for this type of approach, I would say you are definitely on the right track. It is not always necessary to dive right into to social media throwing everything and the kitchen sink at it and Ning provides a great way to execute a measured approach to this. Eventually if this approach turns out to be a success you may want to move into something that is a little more customizable, but with a visionary like Marc Andreessen heading up the technical innovation for Ning I’m sure there will be a lot more customizable features coming down the pipe in the near future.
Great post Jeff, as a technology company working with agencies it never ceases to amaze me how comfortable they want to be, it’s almost as if they want to hide away from what they hope is not going to happen. Even so-called digital agencies still don’t seem to get it. Roll on the revolution, I say
I couldn’t agree more.
And to become digitized it needs to become decentralized. Not just on the web, but in digital television and mobile phone networks etc.
I think the strength in modern digital agencies is finding a group of experts in their particular field that work well together. I found some good advice for hiring digital agencies - check it out -
http://www.demonzmedia.com/DemonzBlog/?p=11