In a Forrester study on 2020 predictions for agencies, the thesis is hard to misinterpret. And the summary clearly lays out what are obviously problems that have been long-identified yet remain unaddressed:
“CMOs’ demand for higher-performing campaigns and experiences will compel agencies to finally embrace their own transformation. In 2020, agencies will either reassemble their process, workforce and capability to amplify audiences, activate campaigns and build experiences with results or find themselves falling further into irrelevance.”
As the president & co-founder of an ad agency that recently repositioned itself as a technology company that delivers marketing and media solutions to brands, this is what occupies my thoughts every day.
The problem as I see it is that creative and media agencies aren’t built on a technology model; they are built on a people model. And technology companies tend to solve for a specific void, which, for marketers, results in these convoluted marketing technology stacks. And these two essential components can’t seem to find a way to work together.
My company straddles both worlds, so I have unique insights into some of these challenges and solutions.
I posit that brands need technology that understands how agencies work and do what an agency does. Tech companies that understand agencies or agencies that embrace tech wholeheartedly will be the ones that survive. Allow me to break down the three main takeaways from Forrester’s analysis as I see it:
Forrester states that “Automation will reshape the agency workforce and the creative process.” I believe this is true. And yet, AI still seems very futuristic and intangible — kind of Terminator-like.
To make AI less intimidating (and seem less ethereal), connect it to something that can actually help you in your work life — for example, using AI to emulate a human’s ability to lay out the address panels on an art piece by programmatically resizing and realigning until it fits is just one way to leverage AI to streamline efficiencies. Doing this can save hundreds of hours of studio mechanical work, proofreading and approvals. That’s not Terminator 4; that’s real impact on your brand’s efficiency.
You could also use technology to programmatically select the most efficient media vehicles based on your target audience and the population demographics layered against the best media tactics based on an exact understanding of coverage.
Centralization & Simplification
The report states that “New operations-focused leaders will centralize more agencies.” I believe this has been a long time coming. The fact that this hasn’t happened yet speaks to the recalcitrance of change in the agency model. Holding companies should have been spearheading this long ago.
While Forrester analysts predict that individual agencies won’t disappear completely, buying power by holding company media groups will likely be consolidated by holding companies in order to avoid the in-house threat.
However, in order to marry operations and advertising, brands need an insider understanding of what the in-house threat actually threatens. In-house agency operations place the time and focus of the brand within the brand’s control, but what brands lose is access to inspiration and outside ideas, inclusive of technology options. A partner who also has access and insight into other brands and that understands both the agency needs and the technology solutions can bridge that gap.
For example, automating a new store’s grand opening process could help eliminate things like a store having to manually change addresses artwork and unapproved materials. An automated Grand Opening Kit solution would enable the brand to ensure that the grand opening budget was met and the franchisee has the necessary brand-required items, ensuring brand consistency and eliminating labor resources.
Embrace In-House Media
This year, Forrester predicts that a third of in-house agencies will spearhead most of the paid media budget. How was that not a foregone conclusion?
Agencies must create alliances, leverage spending and pass that along or get out-negotiated. Using technology in the ad buying space is, for some reason, still in the nascent stages. But it shouldn’t be: programmatically planning, versioning, buying and trafficking are not complex. The fractured media market and media agencies have made their money encouraging it to remain complicated.
Envision this: By combining technology and agency needs, agencies can create an ad planning tool that enables tracking of available media, locations and sales data with primary, secondary and tertiary tactics that both summarize and facilitate placing the media buys on a national, regional and local level — with approval process capabilities. All are done programmatically and leverage artificial intelligence, which improves over time based on performance.
I believe that technology will solve these issues — however, in order to do so, there needs to be a concerted hybrid effort. In order for technological solutions to be effective, technology companies need to understand how agencies work — not just how to develop technology. And if agencies want to survive, they need to embrace technology or find a company that understands both sides of the equation. But imagine the outcome — eliminating time, money and mistakes.
This is not the future. This is now.