For an industry that has witnessed the incredible
evolution of media over the past 60 years, as well as the revolution of
consumers over the past ten, the structure of the advertising agency has
changed very little since the 1950s. At its core the agency has retained the
ownership of big ideas and storytelling, but as the marketing and
communications industry fragmented into disciplined specializations like PR, branding,
social media, digital, direct, mobile, activation and even further into
vertical specializations within specific industries, the agency has struggled
to retain control of budgets and brand narratives.
Agencies like to see themselves as
generalists who retain guardianship of brands and whose primary role is to
generate ideas that can then be adapted and infused into a consistent narrative
for all the specialists to run with. And while specialists sometimes can’t see
the forest from the trees, the generalists are being undermined by the
pervasiveness of ideas and innovation that specialists and even consumers are
generating. Also the primary objective of advertising, which is to create
awareness, is no longer a priority for brands as the most important metrics are
geared towards action and measurable lead generations, conversions, sales and
long term return on investment.
While consumer reviews and opinions along
with a brand’s digital presence and optimized content in organic search is a
more powerful tool for raising awareness, agencies have shifted their focus
towards project management of all the different specializations. Agencies are sifting
through data to evaluate and optimize all initiatives to desperately retain
control and influence over all the touch points.
Furthermore, the focus away from
acquisition of consumers to retention has made the traditional role of agencies
somewhat redundant. As consumers look to other consumers for credible opinions
about brands, their services and products, agencies spend increasingly more
time creating content and value added experiences that will positively
influence the consumer and in turn create better reviews and testimonials as
well as a tangible online presence.
Another ongoing battle agencies face is the
shift from traditional paid media to the “owned” media that’s becoming
increasingly important and specialized, particularly in digital form. Rather
than compete for share of voice, brands are dedicating more of their budgets to
becoming the one and only voice in a medium that they own and control. When
agencies and brands adopt this strategy, the need for even more specialists
becomes a further tax on the traditional role of an agency.
And herein lies one of the biggest
existential struggles facing agencies: being “digitally capable,” where taking
traditional assets of an agency online tends to produce watered down ideas that
attempt to engage with audiences who frankly have no interest or time and are
experiencing engagement fatigue. Some agencies are very good at overcoming this
problem by truly being media neutral and generating consumer centric work that
aims to enhance the experience of a brand, while the majority of work tends to
be adaptations of above the line campaigns.
As communication becomes more and more
direct between brands and consumers, seen clearly across social media, clients
are becoming more involved in the actual dialogue, all while agencies keep
adding specialists’ offerings to keep up and retain a slice of the ever
shrinking marketing budget pie. There comes a point where only giant
multinational advertising networks are able to offer truly integrated comprehensive
marketing and communication services. But despite their best intentions, there’s
a risk of creating uninspiring work that’s not as effective because networks look
at disciplines as separate profit and loss entities, rather than a seamless
brand narrative and experience that resonates with the consumer at every touch
point, every time.
Though the advertising agency is not dead,
it’s certainly evolving. Even if many consumers and pundits foresee the death
of the advertising agency in the next ten years, and despite mysteriously not
changing the internal structure since the 1950s, the industry will continually
evolve and adapt to ensure its survival.
(First appeared in Venture Magazine Oct 2013)
