3 ways forward-looking agencies are evolving
Digital agencies are tasked with keeping their clients ahead of the curve. But how, exactly, can that be achieved? DAC's Robert Cooney explains.
As we collectively wake up to the benefits of a growth mindset vs. a fixed mindset, the nature of questions we're asked by prospective clients is also changing. We're less often asked for a demonstration of some specific capability, and more often asked something like, “With all of this change taking place, what will you do to help us stay ahead of the curve?”
This kind of question gets right to the heart of what the modern agency-client partnership should look like. At this point, the nature of the work has evolved enough that agencies must think differently about how we make money. The following themes of change are already impacting how we work every day—and how agencies are planning for future growth and prosperity.
1. AI is finally good enough for practical applications.
Only a few short years ago, savvy digital agencies could compete on the strength of their pay-per-click bidding expertise and proprietary optimization technologies. Today, the automated bidding in major platforms such as Google and Facebook is fundamentally better than any attempt to pull levers ourselves. The platforms have more data on the user than what is being exposed to external bidding control, and the bidding algorithms have become smart enough to consistently hit targets.
While attempts to automate ad creation are not yet quite as successful, it’s a safe bet that this technology will also improve dramatically in the coming years. Non-digital media will also be increasingly purchased on a programmatic basis and will benefit from similar automation.
With AI taking on more of the platform-level optimizations, there is a decreasing need for agencies to employ as many technical experts whose skill sets are siloed by channel. Instead, we will require more omnichannel marketers who can orchestrate a connected customer experience across multiple touchpoints.
2. People are seeking advice digitally.
Google reports that mobile searches prefixed with “should I ___” have grown by more than 65 percent in the past two years. When customers turn to search to determine their best options—whether it's for car insurance or booking a vacation—there is a growing expectation that the search engine will leverage what it knows about them to deliver a personalized recommendation.
This trend has been accelerated by the rise of voice search, natural language queries and digital assistance, creating a significant opportunity for the “teaching” brands willing to produce enough content to support their customer’s entire decision journey. Glossier is an example of a brand that has very successfully leveraged a content platform to disrupt the beauty industry, allowing the product itself to take a backseat to the people who use it—and how they use it.
For businesses in which the final transaction occurs at a physical location, online-to-offline attribution becomes critical in understanding how an investment in strategic content is driving revenue. For agencies who traditionally bill on a percentage of media spend, it's an uphill battle to scale content practices and advise clients to shift budget from working media to pay for the content creation—despite the growth opportunities presented to clients looking for these services.
3. Adoption of agile methodologies has surpassed traditional.
For most progressive businesses, the concept of being fast to market and then incrementally improving has become understandably ingrained. Clients increasingly want to deploy and test campaigns before scaling what proves to work best—adopting a data-driven, bottom-up, test-and-learn approach instead of a top-down planning model.
As a result, it has become more difficult to sell up-front research and strategy unless it is perceived as directly actionable. This is one reason why the big consultancies, not traditionally known for executional capabilities, have begun to compete head-on with agency offerings. Strategy isn’t any less important; it has just become mandatory to connect it to immediate outcomes.
When clients want the flexibility to double down on what’s working, agency contracts and team structures need to become more fluid, and agencies have to think about which smaller clients will make the best long-term partners with potential for exponential growth.
Ultimately, the ability to thrive in an environment of constant change requires brands to keep the customer at the center of the marketing effort and ensure that brand values are reinforced at every touchpoint. The closer the partnership between agency and client, the greater the odds of success.
As always, the agency will bring to the table a variety of skill sets that add scale to the client's business. But these skills should skew strongly toward strategy, analytics and content development—rather than low-level, automatable tactics—to drive iterative, measurable growth.