Is the current agency model broken?
Agencies need to ask themselves, are they evolving fast enough?
The agency model has been in a constant state of evolution but now needs to be evolving faster than ever before. Agencies need to ask themselves whether the job descriptions they are recruiting with, the media plans they are creating and the media deals they are brokering look the same as they did 12 months ago.
And if so, are those changes transformational enough, and happening as quickly as they need to? We’ve witnessed a great deal of disruption within our industry driven by globalisation and the growth of the digital economy. Whilst we are currently seeing a retreat of hard globalisation, due to the geopolitical and economic landscape, the digital economy is certain to dominate the social, economic and business future of the entire planet, particularly over the next five years. And we know that digital titans, Google, Facebook, Apple and Amazon, will play a disproportionate role in the $100tn (£761bn) that the World Economic Forum predicts the digital economy will deliver by 2025.
As media agencies, we have front row seats in the ‘changing of the guard’ of these industry giants, as well as a head-start on building out our strategies for how we need to pivot to meet the demands of our clients. Specifically, there are five things that I believe agencies need to focus on evolving if they are to stay ahead of the curve in today’s rapidly evolving consumer and business climate.
- Data is the currency of business
The number of connected devices will exceed the number of people on earth by the end of this year. This exponentially increases the need for the media markets to organise, interpret and activate increasingly complex data sets. Data is like crude oil; it only becomes valuable when it is refined. The refinement requires an organisation that takes data very seriously and can manage, protect and govern it in a compliant and responsible way. This is why Dentsu Aegis Network acquired Merkle last year and are in the process of integrating the art of data science into the core of Carat’s market leading insight story. Data empowers media agencies to shift from targeting people we don’t know, to people we know; driving greater personalisation, relevance and eradicating media inefficiencies.
- Total consumer experience
The explosion of media opportunities has reduced the ability of any one medium to tell the entire brand story effectively. Instead, brands need to evolve to tell their stories across the full consumer experience. As media becomes increasingly addressable, the personalisation of those stories and messages increases, driving relevance and tackling issues such as ad blocking head on. A new level of integration and collaboration is required amongst agencies and partners. Brands will require holistic and integrated strategies and plans, with specialist activation; media agencies need to ensure that they have the right people and partnerships to deliver this.
- Marketing shift from control to influence
Belief and trust paradigms have fundamentally shifted and trust is now built on consumer conversations. Brand control will continue to diminish as social influence becomes an even greater driver to purchase decisions. Nielsen’s global survey on trust evidences that word of mouth and online consumer opinion rank ahead of all other types of advertising. In the auto sector, 83% of consumers claim to use social media to research vehicles, and more than half of the car shoppers said that positive comments on social media would make them more likely to buy a specific brand. Given these findings, it is unsurprising that 48% of US marketers expect to increase the budgets they assign to influencer marketing. As the force of social influence increases, agencies will need to ensure that they are equipped to identify and execute against trust and influence metrics. Furthermore, as this becomes a standardised part of the marketing mix, agencies will be expected to accurately measure its impact.
- Focus on client outcomes and not outputs
The point of engagement consumers have with a brand and the point at which they transact have come closer and closer together, meaning that more sales can happen directly within media, making media more directly accountable for sales performance.
Agency performance can now be reviewed with greater confidence against direct business performance. To do this with confidence, agencies need to bring in new types of talent who can develop new models to be able to deliver this. This is a critical part of media agencies re-setting their place within the value chain.
- Brave leadership
In this world, agency leaders need to think in terms of having both a compass for where they are going as an organisation, as well as a radar, in order to stay agile enough to be able to adapt to the limitless opportunities that the digital economy presents. This holds true also for how client leadership needs to evolve within the agency world. As people now spend more time in media than ever before and consumers are directly transacting within media, media agencies have to reestablish the value that media as a discipline can bring to the growth trajectory of any client organisation.
Agency leaders need to be ruthlessly focused on ensuring the maximum value is being extracted from media and is optimised to support the growth agenda of all of their clients; creating a long term, strategic plan for clients, but also having the agility to activate and pivot as the landscape continues to evolve. The other area critical to leadership is partnership. If data is the currency of business in the digital economy, then trust is the currency of partnership. Trust is simply built by people doing what they say they are going to do, with visibility into how they are doing it along the way.
Ultimately, an agency’s ability to morph to the changing environment around them is what drives innovation and keeps the industry fresh and exciting. My call to action for everyone within our industry is to move faster, but focus on moving as fast as the consumer and not the market place. There has never been a more important and more exciting time to work in media, so grasp the opportunity.