The Change Agencies Need

April 30, 2019

Traditional holding companies continue the long-held practice of consolidation, but their track record of driving value and efficiencies can no longer address the vulnerability that lies at the heart of their proposition.

Advertising is changing, and most agencies aren’t, at least not quickly enough, or in the right ways.

One might say traditional agencies have been slow to react. It would be more accurate to suggest that they may have never seen it coming. Big TV budgets and treasure chests of hidden value go a long way to help drive shareholder value, but as digital has grown, traditional players have been caught off guard by the new demands for accountability and transparency. The limited data skills in the offline-dominated networks can no longer hold up a world dominated by Gen Z’ers, influencers, big data, machine learning, crowdfunding and pop-ups.

A recent study stated, “72% of digital agencies worldwide say ‘data science and analysis are the technical skills that will be needed most two years from now.” But two years from now is five years too late.

Consumers are different, data and measurement are different, and the skills an agency needs to traverse this landscape are different. Your network planner-buyer might be whip-smart, but can she write an SQL statement, hack a 24-hour media test and attend the 9 a.m. scrum meeting with yesterday’s findings to re-write today’s priorities on the fly, without a care for an SoW?

Today’s environment requires a new type of organization and talent. 

From big (media-funded) sink-or-swim creative to granular, iterative, measurable, utility-laden, ever-changing messaging.

Digital and its expanding, fragmenting and siloed data sets is the new normal, and the big-picture-only thinking of yesteryear is no match for the new world of constant, iterative innovation. Sure, traditional agencies may have entire digital divisions, and they certainly drive digital media, but the skillsets and approach still refer to earlier times. Who stands up and says they’ll solve problems with a bunch of hackers? Likely not many in the agency world, but maybe they should. “Growth hacker” was the title du jour at VC-backed startups, but the zeal for rapid and near permanent prototyping never really made it to ad land. That’s a shame, because it’s exactly what organizations call for. Big, bold storytelling is what makes advertising so wonderfully seductive, but the long-form mass media landscape from which it was born is almost unrecognizable today.

Agencies are used to knowing the answers (or at least confidently saying they do). But no one knows the answers anymore, because the pace of change and the permutations of disparate, ever-evolving media formats can’t all be known. There are way too many possibilities and paths to purchase today.

Agencies that are changing every day (and ones that are rewarding clients for doing the same) are positioning themselves to provide the value and growth that brands require, both now and in the future.

More important, it’s okay to not know the answers, provided, of course, you have a skills base, technology and process that can find hypotheses buried in mountains of data, build complex testing programs and execute same-day media. The mindset that acknowledges there will always be more data to analyze and more strategies than you have time to execute isn’t something for which agencies have been known, but that is today’s reality. If an agency tries to tell you they know all the answers, then you can bet your life they don’t know half the questions.

Build teams that can build tools

The migration from traditional media to digital was largely carried out with toolsets and M&A, but toolsets alone don’t change culture or working style. Models that standardize process around widely adopted tools or methodologies are great if they’re future-proof, but awful during a period of rapid change. The current environment of data, discovery and iteration calls for an entirely different kind of organization. Rather than teaching teams to use tools, the new paradigm demands you create teams that can build the tools.

As far as we’ve come in digital, media formats and the advertising they offer are often still completely out of sync with the real opportunities they present to brands, and it’s precisely this that agencies need to recognize as the new normal. The cynic would say it’s never been a more challenging, tumultuous time, and that might be true. But never has advertising been a more exciting place to be, or the options available to brands in such a state of flux. Just look at the insta-cult icons who’ve launched products with zero marketing dollars, their rise to fame and the power they wield. Or, think of the beauty industry, a stalwart of traditional brand- building, and how they’ve been wrongfooted by the likes of Glossier.

Agencies that are changing every day (and ones that are rewarding clients for doing the same) are positioning themselves to provide the value and growth that brands require, both now and in the future. Building an agile culture and empowering workforces to challenge the tools available to them is what allows the right change to happen. Shifting towards a working model that is confident about not knowing the answer is the real answer.

This article originally appeared in AdAge. 

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