Innovate or die- agencies must evolve to survive
Agency structures and their models are broken. Not just KIND of broken where you can slap some duct tape on it and it’s good. No, it’s sending it to the junkyard, melt it down and redesigning the whole damn thing broken.
Gone are the days of producing a TV spot with digital and print to support it. (Where’s Don Draper when you need him?) Yet, some of the largest global agencies still structured to support their clients in this way, why?
Simple. Advertising benchmarks show Agencies haven’t evolved.
Marketers have moved from producing 4 pieces of content per year for $2M to hundreds if not thousands of pieces for $50k. It’s now an endless cycle of promotion.
Digital media for the first time in 2019 will surpass traditional media spend. And despite it all, the agency structure hasn’t evolved to support it.
At the ANA Masters of Marketing conference in 2015, then PepsiCo president Brad Jakeman had a lot of harsh words for advertising companies (Source).
“I am really worried that this model is not going to bend – it’s going to break if we don’t really think about how to innovate.”
When Brad spoke again in 2018, he discusses their lack of interest in acquiring content studios, and a reluctance of advertising veterans to move away from traditional platforms like TV. Although we may disagree with him that agencies haven’t kept up with the digital age and away from traditional platforms, we can agree that the traditional agency model is due for modernization.
Marketing Consultants say Agencies must Innovate or Die a Slow Death
The structure and technical capabilities of production must be the basis to hybridized with the creative assets of a traditional agency. Planning shouldn’t dictate agency work, they need to be quick enough to react instantaneously. This is what the production structure and mindset allows.
Four Production Benefits for Advertising Agency Structures
Production models allow agencies to bring content to market quickly.
There’s no waiting or back and forth with third parties. The creative process and production schedule are controlled from start to finish.
It enhances the creative process by allowing experimentation.
Having production capabilities in-house, agencies can push ideas while getting rid of what doesn’t work without incurring third-party costs.
Production models provide a huge variety and volume of content across platforms.
Showing what you are capable of iterating, delivering beyond the brief and pushing creative in many different directions is invaluable to the brand.
Agencies can react to what’s happening in the news and culture in real time.
You can’t just create content, it must be relevant. Especially for brands trying to gain earned media and have a voice in the cultural conversation.
Creative and implementation (delivery) have always had a complex relationship. Like an ex-girlfriend showing up to hang out with the new girlfriend. Both will be looking for attention, but only one will get it. Traditionally, this is how agencies are viewed. They can’t manage each equally.
The digital age has changed dating for better or worse (just one word, think – tinder). Just like agencies are managing to become organized while continuing to be creatively lead. Brands shouldn’t have to lose out on creative ideas, to be well coordinated and constructed.
Marketing Procurement thinks Agencies will learn about Darwinism the hard way.
Creative agency models born from production companies will be set for the future. Building creative off a production foundation, agencies are prepared for the new high-volume environment.
We aren’t saying agencies can’t evolve. Some agencies are increasing production capabilities. They are building studios and hiring in-house production teams.
But other agencies may have to take a hard look in the mirror. And some may have to break it.