Thursday, July 13th, 2017 | 8 min read
I used to work for an ad agency, and I always found it irritating when people told me that the agency model was broken or that we were “on a burning platform.” It bothered me because I knew that agencies weren’t just standing still, living in the 1950s; we were trying just about everything and anything to modernize and stay alive.
Agencies know that they need to keep moving, but when you are in the thick of it, it’s hard to see things objectively and it’s even harder to make strategic changes when targets are looming and client expectations are shifting on a month-by-month basis.
I no longer work at an agency, but I work closely with them, and the problem has only become worse over the last few years. The tech revolution has made it hard for agencies to be experts in every aspect of digital advertising, making them vulnerable to tech specialists such as vendors and consultancies. At the same time, there has been growing mistrust of agencies, media outlets, and advertising, along with a gradual shrinking of fees.
When you’re part of an agency, the tendency is to ignore these problems and carry on fighting fires. You can dismiss it as an image problem or argue there are other agencies who are much worse off. Now that I have some distance from it, I realize that it’s a much deeper problem. The whole client–agency relationship needs a rethink. I can see the clear gap between what clients need and what they get from agencies (and the gap between what they think is happening and what’s really happening).
If agencies are to survive and overcome these problems, then they – and their clients – need to make some big changes.
Full-service agencies have become bloated by doing far too much unskilled work for their clients, following orders, and trying to make a margin. They are busy ferrying goods and stacking shelves, while consultancies are helping their clients to decide which products to stock and where to open new stores.
The most successful consultancies – and progressive ad agencies – have a totally different DNA than old fashioned agencies. They act as partners and they only get involved if they are allowed to collaborate on strategy. They believe in the brands that they work with and tell them the hard truth when necessary.
This represents a shift in the value that agencies offer to their clients. Supplying colonels rather than infantry, partnering rather than servicing, and being transparent rather than secretive.
Automation is a chance to reset and pass over much of this infantry work to algorithms and external partners. It’s a chance to go back to the kinds of headcounts that existed before the tech revolution – core teams of creatives and strategists. The agencies of the future will be nimble, collaborative teams supported by flawless technology. Bloated and unaffordable headcounts will be a thing of the past.
The top agencies still have the best people – the most creative people with the most experience – but at the moment this expertise isn’t being used in the right way. Agencies simply lack the skills to get the most out of a client’s data and feed that information into the work that their best creatives are doing.
There’s a gap that needs to be closed. When agencies catch up on technical expertise, they will have the best offering – the best ideas and the best solutions. At the moment, however, consultancies are better equipped to handle day-to-day technical matters.
Agency work is often a battle between what the client wants to do and what the agency wants to do. Agencies want to receive a well-defined problem and the time to come up with a solution (or to be left alone to do the work when a solution to the problem is provided by the agency).
Agencies need to understand that clients don’t want to be clients anymore. Brand managers are not clueless – they are knowledgeable, well trained (often ex-agency), and they expect to have all necessary information at their fingertips all the time. Weekly reports won’t cut it; they want real-time access to campaign performance. They also want advice, consultation, training and cooperation. They don’t want someone to do something for them on the outside, they want someone to come inside and work with them.
Clients also share some of the blame. They need to be braver, to shake things up and demand a different working relationship from their agencies. P&G’s Marc Pritchard issued a rally cry for increased media transparency, but unless other brands support him, nothing will change.
Brands have to allow agencies to get involved earlier in the process of crafting long-term strategies. This means trusting smaller agencies and allowing them full access to their business’s biggest problems, rather than issuing narrow briefs.
Agencies haven’t adopted martech en masse, but consultancies have embraced it and made gains. This should serve as a sign to agencies that today’s clients want martech expertise and support. It’s not a gamble anymore – it’s where marketing is going.
However, agencies can’t just adopt the technology and continue operate as usual. The whole ethos needs to change. You can’t use martech effectively unless you buy into the idea of transparency and act as a partner with the client’s best interests at heart – simply because martech platforms are built with transparency and cooperation in mind.
The real opportunity for agencies is the next step for this technology. Automation and AI are only in their infancies right now, but rather than viewing them as a threat, agencies should recognize them as a means to solve some big headaches, focus on what’s important, and finally solve the issue of shrinking profit margins.
If agencies are to succeed, they need to understand this is a fundamental change – they must commit to transparency and cooperation before they try to integrate martech into their setup. Otherwise, it just becomes another piece of software. Agencies don’t need to copy consultancies, they need to realize that this revolution isn’t about software, it’s about accepting that the needs of clients have changed.
The role of an agency is now to assist, to truly understand the client’s business outcomes (and its numbers) and provide that extra spark of creative genius. It’s about giving advice and context on a day to day basis, rather than taking ownership of a project and building something away from the client’s influence.
This isn’t a strategy that I’m just imagining – it’s based on conversations with agencies that are now moving in this direction. And there are many others who are fully committed to leading the way on data, tech platforms, AI, and automation.
Publicis Groupe has just announced plans to build Marcel, the first AI-powered professional assistant, which its 80,000 employees will eventually use to support their day-to-day work. Marcel is described as part Alexa, part Google for Work, part creative community Behance and part Kickstarter.
This is a perfect example of an agency group embracing technology to provide something that others can’t, pooling their vast global talent, streamlining workflow, and providing clients with better creative solutions. It also demonstrates to clients that Publicis is walking the walk, putting data, machine learning and technology at the heart of their operations.
Agency groups and agencies that do this will not just survive automation, they will dominate the future of advertising.
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