Agencies have a largely unsurpassed opportunity to drive breakthrough results for their clients while reinventing the art and science of brand building. But it doesn't start from the now-tiresome debate of agency structure.
Having landed in my current post after having shepherded arguably the most ambitious experiment focused on rethinking agency structure -- WPP's Enfatico -- I can attest to the dangers of too much focus on framework.
The future of our industry isn't wrapped up in how agencies are built; at the center remains the consumer and the hard work of telling compelling and authentic stories about clients' brands in a world of increasingly fickle and demanding thresholds of engagement.
The good news is that agencies now have access to powerful tools that put them at the center of the marketing renaissance with the opportunity to co-create and shape this exciting new world. Below are what I view as four areas that hold still largely untapped opportunities for agencies:
Advances in media technology, data integration, and real-time bidding allow unparalleled targeting capability in the digital world. Marketers can now serve up the right creative to the right audience at the right time through the right channel to deliver exceptional campaign results. Holding-company trading desks, demand-side platforms and next-generation consumer data management companies are at the forefront of this movement, redefining marketing relevance. Importantly, this largely auction-based, real-time bidding functionality allows high levels of efficiency over the "long tail" of digital impressions -- empowering niche content sources while delivering attractive incentives for new content creation.
While still nascent and focused on digital display, this model will eventually migrate to all addressable media types, including digital TV, online video, mobile and as-yet-unforeseen innovations. Agencies, given their central role in media decision-making (the Big 6 manage $400 billion in global media spending) as well as their investment in the trading interfaces for this new platform, stand at the center of a new approach to marketing strategy and spending allocation methodologies. There is tremendous headroom here for thought leadership, proprietary algorithms, arbitrage that delivers higher margins and scalable, data-driven approaches to specific audience segments and sub-segments.
The New Creativity
Technology is unleashing previously unforeseen creative possibilities. Just five years ago, creativity was ahead of technology -- we aspired to so much that our platforms could not deliver. Today it's reversed: Technology is out in front of our creativity, challenging us to tap into the white space it creates on a seemingly continual basis. For example, where I work now, we're inspired by our agency partners who engage us upstream in the ideation process and consider it a mission to find ever more inventive ways of mashing up our products to create unique brand experiences that delight and move people to action.
From Tribal DDB's mash-up of Google Maps and SketchUp for a newly conceived Hasbro Monopoly game to our collaboration with Arcade Fire, Chris Milk, Radical Media and B-Reel to produce The Wilderness Downtown on YouTube, to the partnership between Saatchi & Saatchi and the National Crime Prevention Council to combat teen cyberbullying, to numerous other examples across the marketing landscape, technology is redefining the possibilities of creativity in truly extraordinary ways. Agencies again sit at the center of this new world of opportunity.
Fragmentation & Complexity
We all understand the inherent challenges associated with fragmentation and complexity across consumer behavior, media, products and platforms. For agencies, though, this rapidly evolving landscape means marketers' needs for insight and advice rise exponentially. Despite the sobering statistics shared at the 4A's conference on the talent crisis facing agencies, they remain the foremost experts on building intimacy between people and brands across diverse touch points of engagement. This status will not change any time soon. In fact, we observe many agencies aggressively migrating their strategies to address these shifts in market dynamics, fragmentation and complexity are curses but also blessings. Agencies don't have all the answers, but the core of what they do is of tremendous and increasing value in our rapidly evolving world.
The Next 'Now' Thing
As marketers, we're always looking for this to keep our work fresh and interesting. Agencies have the opportunity to focus on the Next Now Thing, which offers lots of low-hanging fruit that can deliver significant short-term value for their clients, and position them as more digitally-savvy without the burdens of seismic reinvention. We've benchmarked peer-set agencies across several dimensions of online investment in search, display, video and mobile. Even normalized for client portfolio differences, we've found significant variations in baseline investment and high concentrations of digital spending among the agencies' top three to five clients. Teams are not sharing best practices or learning across their clients. Digital leads are stretched too thinly to provide counsel on rudimentary digital integration opportunities. Beyond media investment, simple blocking and tackling efforts like building mobile-optimized site experiences go unaddressed. There is significant, untapped short term opportunity for agencies to simply get the basics right.
So what should agencies focus on if they can leave behind worries about agency structure? Learn about ad exchanges, DSPs, and next-gen data management companies to prepare for the future of audience buying. Infuse technology thinking into every aspect of the creative process -- as far upstream as possible. Hire lots of young technophiles and put them in every brainstorm. Get closer to your technology partners.
Crawl before you walk; walk before you run. Resist the allure of the latest marketing fads at the expense of basic blocking and tackling. You don't need an adaptive agent-based model to know you should be spending more than nothing on search or at least experimenting with ad exchanges. Mobile campaigns are really cool except when they direct a consumer to a site experience that can't render on an iPhone. And most importantly, stop navel gazing. Agencies will continue to make us laugh, cry, ponder and yes, even spend money on things we really don't need. Resist the doom-and-gloom cynicism about the demise of the agency business.