Advertising 5.0: Who Will You Be?

As Upheavals Continue, Many Could Be in for a Rude Awakening

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Tom Martin Tom Martin
What will the world of advertising look like for small agencies in five years? More important, what will your agency look like in five years? My crystal ball says many of us are in for a rude awakening.

Everyone is saying it (or, to be more accurate, whining about it). The advertising business is in a state of upheaval. Everyone is blaming it on technology and the rapid rate of change it is causing. Hello -- it ain't the technology, folks. The technological change is simply making it easier to diagnose the real challenge. The one that has been around since the dawn of our industry but that, thankfully, we've been able to sidestep.

Consumers are complex. And more important, persuading said consumers to do things is really complicated stuff. You actually have to study things like psychology, neuroscience, discrete choice and more. You have to do something other than just create and run ad campaigns for a living if you want clients to trust and value you. You have to study human nature and humans. And to make it all really fun, the humans refuse to cooperate.

The future of advertising will be marked by a dramatic shift in the roles agencies will play, the staff they will hire and the compensation agreements they'll work under.

I think the days of the traditional generalist agency are coming to an end. The 5.0 agencies of the future will either be creators of ideas (C agencies) or producers or placers of those ideas (P agencies). The really fortunate ones will morph into Master Communication firms that clients hire to handle strategy and direct multichannel marketing programs. These C agencies will solve problems and create ideas that grow brands, companies and bank accounts. The rest of the firms will have to settle for roles as producers or placers of communications.

The C agency of the future will need ubersuits. These rare account strategists will possess the creative vision, intellectual bandwidth, and communication, strategic and organizational capabilities needed to direct highly fragmented, complex campaigns on behalf of a client. Working with fellow C agency ideators from all walks of life -- media, interactive, creative, public relations, research and likely academia and social sciences -- these account strategists will craft highly complex yet elegant solutions to real business problems. Then they'll work with P firms to bring those ideas to life in multiple channels and to multiple audiences while ensuring everyone stays "on brand."

The C agencies, with their thinkers and creators, and with the people who solve business and communications problems for companies, will enjoy more robust margins and healthier client relationships. Their insight and intelligence will be recognized and rewarded. They'll be compensated on a fee or percentage of profit basis. The P agencies will face far more pricing pressure. More and more companies will engage their purchasing departments to drive down the cost of production and placement of campaigns. Much of this work may even go offshore. Suffice to say, the successful P agency will need to combine efficiency, quality and customer service if it wants to succeed.

In Advertising 5.0 land, I think the full-service generalist agency tradition will give way to a Keiretsu model. Maybe agency networks like AMIN, TAAN, Worldwide Partners and a host of others will play a larger role. Maybe smaller firms will simply form their own Keiretsu. In any event, agencies will continue to specialize in an effort to respond to a new world order dominated by fragmenting consumer segments and cost-conscious companies.

The big scary question for all of us right now should be, "How many folks do you have on staff right now who could possibly be an ubersuit or a C agency ideator?" If you don't have at least a few, you might be facing some unpleasant changes in your future.

The late-night rantings of a madman? Maybe. Maybe I've gone all Jerry Maguire. But what the heck -- he got the girl, the clients and the money. So let's just say, I hope I had you at hello.
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