Once upon a time advertising agencies ruled. Clients didn’t quite understand them but knew they needed them. Being with agencies was fun and amazing and insightful. It was the best part of a client’s day. Agencies were different from clients. Agencies were in charge. It was a special and magic place. Nobody on the client side could create the magic and elixir that agencies had.
Agencies did all the things that clients couldn’t do.
Then computers came and the agency magic was eroded. It really wasn’t that long ago.
Clients learned to do some of the simple things that agencies could do but for far less money. Marketers could increase their internal value by saying I have found a way to cut our costs. We are bringing some things in-house. The most cost conscious ones did it first. But they were probably the worst clients for an agency to have.
The one thing that clients couldn’t do was to create ideas. First clients paid for them and soon they found that some agencies gave their ideas away free. Some Agencies unfortunately reacted to the loss in revenue and clients by making their most valuable attribute a loss leader. They reduced their craft to a free commodity. Shameful and sad. They chased the money and not their vision and beliefs.
That was the past. Here is my take on the future.
I believe that today agencies can lead again. Honest. Some already are there.
The key today for the agencies on Main street and is not a CMO but an Agency Technologist.
Everyone is overwhelmed by technology. We can’t keep up with it and neither can clients in today’s world. Alvin Toffler predicted that we will get to a point where we have information overload and he did that 40 years ago.
Understanding technology is today’s agency magic elixir that clients can’t match and where agencies can recapture their leadership.
Agencies will always be valued on creativity and innovation but that delivery needs to be changed to a navigator of the world of technology that has been reinvented before I wrote this sentence.
Clients can’t keep up with the pace of change. Clients will value that guidance and reassurance.
Finding Technologists can be a challenging recruiting task. They are difficult to find. Just the same as when social media exploded and posers became trophy wives.
They aren’t people that do stuff. They know how to align messaging to opportunity. They see things that others don’t.
In the near future Technologist will have an important seat at the table.
They will be listened to and often decide the course.
What proportion of the budget will be directed to automated marketing, what proportion with intimate consumer dialogue in social media, what apps can help a business grow? What tablets will be at point of purchase in retail locations to overcome the Best Buy decline. What things I can’t see today but will need tomorrow before my competitors find them first.
Yes it is time for agencies to regain their lead. You see innovation and being at the front end of the future has always been agencies best ways to lead.
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I love you Hank, but I completely disagree. The big creative ideas that bring strategy to life and bring life to the brand will always have the most value. That is what clients can’t do for themselves. While I agree that the ways in which the big idea gets communicated to customers are completely different now than they were ten or even five years ago thanks to technology, integrating them into a solid go-to-market plan is not rocket science. And for marketing automation to truly yield its promised benefits, it must be integrated into a client’s BW, CRM, and ERP systems–something an agency won’t be able to do. That said, I don’t know what the answer is to the question of how agencies can lead again. But I think it has to be tied to the big idea. That’s where the value is. Thanks for listening . . .
Great to get some dialogue going.
Ogilvy said in Confessions that “clients should focus on getting more out of the 85% they are spending elsewhere to increase sales instead of chipping away at their agency’s 15%. You pay people peanuts, you get monkeys working for you.” You do not want a client who thinks he can replace your team by doing the same thing in-house. Run, don’t walk.
Seriously Hank. I think technologists already play a key role in successful 2013 agencies – SEO, Social Media, digital. mobile. big data.. even for a small firm like mine we have to have skillsets in almost all of these areas to provide value… AND be expected to come up with BIg Ideas that help clients sell more.
Thanks for this Mike. I see so many agencies that still lag. I think that the marriage of Big Idea Amplified by Technology will attract the interest of clients. Thanks for reading.
A little torn on this… Not sure I think an agency is a good leader for its clients simply by becoming a “navigator of the world of technology”. Important knowledge/skill set? Absolutely. Valuable point of difference in selecting an agency-partner? Sure, but by itself doesn’t outweigh the need for a strong understanding of brand, market, consumers (segmentation and targeting in particular), strategy, marketing ROI across all tactics, creativity, etc. Understanding today’s digital delivery options is only helpful if you know what you want to deliver and to whom.
Thanks Bill. You are absolutely right that ideads, branding, creativity are all very important. I just think that in the New Normal technology is another medium that agencies need to be very versed in. Thanks for reading.
Hank, one defining moment was when the media agencies separated from the creative agencies. A few things happened: 1) clients squeezed both on costs, now that they could see both 2) answers became very linear, we do this, they do that…and the big idea that transformed across both died 3) squeezed costs squeezed out the talent….planning became a luxury…and account people with experience became a novelty.
Ironically, this separation came in the late 1990s, just before media was about to explode in importance.
Irony is a bitch.
Very interesting observation. You sounding like Malcolm Gladwell but then again you are both from Toronto. He couldn’t get a job in advertising either.
Part of the challenge for agencies is that we are still in the Pavlovian era of the web: any marketing junior staffer read instructions on Google, look up keywords, populate a website accordingly or use AdWords, and get a response. So who needs an agency?
Agencies today can do the most for those companies that want a serious competitive advantage, and seek a multiple of response rates. Agencies can improve what happens after a consumer links to a company. Brand, messaging that prompts action, messaging with sufficient stickiness that a consumer returns – that’s the value-add today.