Is there a future for the advertising agency as we have known it to date?
In recent months, there has been a slew of articles about advertising agencies and their future/fate in a world that is so dramatically changing when it comes to the marketing of brands. Without question, brands have been amping up their internal resources and bringing many of the resources that have typically fallen within the domain of the agency back inside the organization. It is not uncommon for internal marketing teams to have senior chops in the areas of creative development and analytics down to community management, loyalty program management and even the day-to-day handling of certain media activities (like search engine marketing, affiliate marketing and more).
What's an agency to do?
It's a murky, unclear future for the marketing agency, but one thing is for certain: things are changing at an exponential pace. An agency used to act as the executional arm of the marketing department. An outsourced idea and creative team that could get the production done at a cost that was less than what it would cost the brand to have a permanent staff in place. Over time, this role has changed. The digital channels have definitely amplified the need for agencies to evolve and adapt. How people connect to traditional channels like TV, print, radio and out-of-home has changed from their intended purpose of interrupting consumers with a message during content consumption. Social media pushed this even further by forcing brands to engage with consumers - one-on-one - for the public to see, in a very human voice. Mobile continues to offer many ways to connect with consumers who now wield tremendous power in the palm of their hands. With that everyone is curious about how big data is going to play out, what's in store for wearable technology and just what, exactly, the screen of the future will look like and how consumers will interact with it? Still, the role of the agency is fairly simplistic (in philosophical terms): help a brand increase their sales and loyalty. Nothing more. Nothing less. And that value-add has not changed since agencies were first invented. So, now what? How do agencies ensure their future by being able to help brands sell more and build stronger loyalty in such a disrupted and disintermediated world where every individual is consuming so much media in so many different channels and, in the same breath, are their own media channels (look no further than Facebook, YouTube, tumblr, Twitter and more)? How does an agency stay ahead of the curve?
Here are five new attributes for marketing agencies to develop:
Is the agency of the future just a back to the future moment?
Sadly, most people think of "advertising" when they think of "marketing." Marketing - as traditionally defined - is about the Four Ps (Product, Price, Place and Promotion). Marketing agencies have spent the bulk of their time focused on just the promotion part of those Four Ps. The world - because of technology and connectedness - is forcing marketing agencies back to the entire sphere that encompasses marketing. Now, more than ever, marketing agencies will be challenged to prove their results and mettle. It's going to be interesting to see which agencies can transcend and thrive in these times.
What do you think are some of the attributes marketing agencies need to remain valuable to brands?
The above posting is my twice-monthly column for the Harvard Business Review. I cross-post it here with all the links and tags for your reading pleasure, but you can check out the original version online here:Tweet
R&D is a tough one. I suspect there would be too much of a legal battle. Who owns the final outcome the brand or co ownership which legally would be a nightmare.Reply
This is an intelligent assessments of the state of the industry and where the future might take us. Coming from the PR/Comms side, we're seeing creative agencies getting more into the social/content side of it as well as seeing PR agencies adding the ad/creative services. Like you mentioned, we've done a great job at the commoditization of what we do treating it more like a product than a service, but that approach is not working as we're left recycling ideas and processes (lather, rinse, repeat...right?). We're always trying to stay ahead of trends and I'm left wondering is big data the next social? I think our future strength is on being lean and being able to be better at analyzing data and working on the other 3 P's. If we can show value at research, pricing structure, and marketplace analysis...we've created a relationship that provides great value.Reply