How will the new ad agency look like ? what capabilities they should have ? Anyone who is involved in the advertising industry understands (or will do so soon) that the place of traditional advertising agencies in the value chain is losing altitude and significance. Advertising agencies need to reinvent themselves or find another business.
The end of the advertising agency as we know it
The advertising industry in the United States feels uncomfortable with the strengthening of the so-called In-House Marketing trend. More and more super-brands are moving towards owning their programmatic advertising – L’Oreal, Netflix, Unilever, Walmart, Target, with strong brands looking for the right structure to ensure their dominance.
Super brands understand that they need to control the data of their marketing-related activity – customer media consumption habits, campaign performance, campaign responses, campaign-purchase correlation, user profile information and usage. All these are valuable treasures for brands and companies. The decision to “bring home” this treasure is adopted more and more by brands in the programmatic era.
In other words, programmatic advertising (which makes up the big share of brands’ advertising activity) is gradually leaving the conventional advertising agencies behind. Add to that the fact that brands manage campaigns on Facebook and Google, quite well by themselves, and you end up with a gloomy picture of the advertising agencies, as we have known them not long ago.
How can advertising agencies deal with the situation?
The solution lies in advertising agencies adopting technologies so that they can provide a technological answer to all those brands that are unable to buy / manufacture their own programmatic advertising. Agencies should move towards this goal, focus less on mega-brands preferring to tackle different ones (most of the market). The movement of brands is usually slow. You can take advantage of the momentum, with one condition: Implementing a start-up mentality in advertising agencies. First of all, creating media opportunities that are not based on Facebook or Google, where advertising agencies have no leverage, moving towards a significant entry into content.
Inbound Marketing – developing skills in content creation and content distribution.
Brands should start thinking like creatives. Those who can help them cross this road are the new advertisers / creative people.
It is time for advertising agencies to spearhead this industry
In short, bridging the technological gap between the advertising agency and its customers is a necessary condition. Developing expertise in non-conventional creative areas (content – including smart content distribution capabilities) is no less important.
Without these two basic changes, the industry will lose the relevance required for its continued existence.
So how will advertising agencies look in the coming years?
An advertising agency should build itself on three basic strengths:
Digital Centric Structure –
Some advertising agencies still perceive the digital world as an effective place to run campaigns. Yet, real assimilation of digital thinking is called for – the Y and Z generations born to digital do not simply pop in to properties and digital platforms. They live there. Advertising agencies should appreciate that they, too, need to join digital life and not just use it to promote their brand.
Full service and data driven organization-
Data is crucial for the continued existence of any advertising agency, therefore it is definitely advisable to establish a department that is dedicated just to that. Nowadays, any advertising agency could use easy technologies available for implementing data centers within its systems and not to outsource it to an outside supplier!!!! Data is the driving force of any marketing-business success.
Performance & Relations –
The marketing world is positioning itself on these two elements and advertising agencies should understand how to develop relationships with consumers for the benefit of their clients, and of course should incorporate performance-based thinking. These can be implemented with simple technologies and a new and measurable work concept.
An advertising agency that wishes to become a significant dependable factor for its customers, should address the following five crucial issues:
- Advertising – primarily programmatic – including media, assessment and data driven marketing technologies. These are not creative solutions but rather advertising and analysis technologies.
- Content based marketing – including content creation, content aggregation engines, content distribution software and, of course, analytics, measurement and optimization.
- Social marketing – content creation and community activity for the brand – including distribution across all networks relevant to the brand / customer, performance measurement, automated activity management through smart software solutions
- Marketology – combining basic technologies in marketing. The world of marketing is undergoing automation of all its components. Technological tools must be part of the new culture of advertising agencies.
- Management and establishment of customers’ digital assets – site, stores, applications, bots, blogs, social, brand sites, brand channels on media and smart television, YouTube channels and the like. This part includes developing technologies, analytics and promotion. Keep in mind – the goal should always be to control the processes and especially data.
An advertising agency planning to embark on this essential change will also have to change its whole recruitment strategy – more technology, data, analytics, and content people. The four anchors of change and no less important – the four main components that could bridge the knowledge gaps between an advertising agency and its clients.
“And what about creative”, you’re probably asking yourself
This factor will not necessary be part of the future advertising agency. Advertising agencies will not always keep their own traditional creative department, they will outsource specialized agencies – where you will meet a different type of workers, as well as different business models (payment per talent, payment per project, retainer, etc.).
Advertising agencies looking to continue to provide value to customers and, as we have said, also create dependency of a sort, will need to focus on the five pillars listed here and release the creative field to specialized supporters.