AGENCY FUTURE

AGENCY FUTURE

I won a travel grant awarded annually by the Danish Association of Ad Agencies. I called the project ’Agency Future’ – it would be an inves-tigation of emerging business models in the ad industry. I’ll get back to the project in a second but first a bit about me…

AGENCY FUTURE

CHAMPAGNE & OYSTERS!

AGENCY FUTURE

As a former journalist, I seem drawn to industries beset by massive change brought about by the In-ternet! Although just a lowly reporter on a weekly newspaper with a small circulation, I wasn’t blind to the quiet urgency exhibited by the suits in the organization. I discovered Jeff Jarvis’ Buzzma-chine blog and I began to take an interest in the fundamental dynamics of the newspaper indus-try. It fascinated me that something as crude as Craigslist could decimate classified revenue, effectively pulling the rug from under the legs of the industry. I began to take a macro view.

I had always assumed that I’d be in newspapers for the rest of my career, that newspapers were too big to die, and that their function was too entrenched in society to be usurped. But when Newsquest (the publishers of my newspaper) began cutting costs and replacing more and more editorial space with ad space, I could see the writing on the wall.

But then came a woman, and Denmark, and Copenhagen and no more journalism. But I’ve retained that macro fascination with the waxing and waning of industries. I studied History at uni-versity, which furnished me with a greater sense of perspective, and the realisation that everything is subject to the same constant forces of trans-mutation.

But Agency Future – what exactly was my pitch?

OUT OF THE FRYING PAN, INTO THE FIRE

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AN INDUSTRY IN FLUX

In essence, this: ‘Half documentary, half social media exper-iment, my ultimate ambition is to produce a snapshot of an industry in flux, while also showcasing the collaborative and transformative power of the tools powering the upheavals.’

When I entered the world of advertising about four years ago, I realised immediately that it was undergoing many of the same disruptive changes as the newspaper industry. It had taken a few years to catch up but advertising too was now being forced to fundamentally re-examine its practices in order to stay profitable and relevant. In ways I was only just dimly becoming aware of, the Internet was once again the dread force at work – disintermediating, disrupting, destroy-ing.

My arrival in advertising also coincided roughly with the credit crisis which in turn precipitated a huge downturn in ad spend. The fortunes of the big four networks WPP, Omni-com, Publicis and Interpublic appeared to be on the wane. In September 2009, Sir Martin Sorrell, the chairman of WPP, announced that his organisation ‘couldn’t fire people fast enough to keep up with the downturn in ads’.

Digital agencies had never been sexier and seemed to prom-ise a smarter way to connect to consumers while eschewing the production-heavy models of the big agencies. Leaner, more agile agencies began to emerge, with a proposition of making their clients’ money work harder.

http://www.businessinsider.com/henry-blodget-wpps-sor-rell-we-cant-fire-people-fast-enough-to-keep-up-with-the-collapse-in-ads-2009-9

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What does that mean?

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The project would represent the changes be-setting the industry – it would symbolise the disruptive forces that have denuded advertising agencies and media buyers of so much of their strategic advantage. Specifically it would use so-cial media to raise awareness, and it would adopt the principles of crowdsourcing in order to tap people’s wisdom about who they thought I should speak to.

I also wanted the project to reflect the open, col-laborative spirit of the internet as I understood it. I took the standpoint of a relatively inexperienced copywriter who knew little about the fundamen-tals of the business of advertising but would use the internet to talk to people who did.

But most importantly, I wanted the project to be a living document of the changes besetting the industry. Although I would have to present my findings after a year (the presentation you are reading now), I realised that agencies would not stop evolving and that those findings would prob-ably be irrelevant before too long. As I write, my agency – Advance – has agreed that the project should continue.

The project would be a ‘disruption example’

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So the project is a blog and the content is the interviews with the people shaping the changes affecting the industry (or at least reacting to them quickest):

http://www.agencyfuture.com/

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I talked to people at a diverse range of agencies – trad, digital, new model. What they had in com-mon was a determination to evolve, and to shape the future of the industry. Preserving the status quo is not an option for these agencies.

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The project is a Twitter feed with over 800 followers. Twitter has been crucial in terms of crowdsour-cing ideas, and gathering suggestions as to who I should interview. Twitter has also been far more effective than email in reaching out to people, forging a connection and getting them to agree to contribute to the project.

http://twitter.com/#!/agencyfuture

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The project is also a resource with over 100 links tagged #agencyfuture and publically viewable on my Delicious:

http://www.delicious.com/Aaron78/agencyfuture

• Yes, new business models are emerging (crowdsourcing and owned IPs)

• But they are simply a byproduct of the gradual erosion of the regular, production-heavy model

• The real change is the growing realisation that in today’s world, the answer to clients’ problems is rarely better advertising

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All the agencies I spoke to agreed that advertising had changed fundamentally and that the days in which advertisers just needed to be able to shout louder than their competitors were gone forever. Some key quotes:

‘Anomaly started with a few people who were essentially all marketing refugees. The core was and is creative thinking. I think a lot of us had become frustrated with the environments we were in. In my case I was in an advertising agency. One day the realisation came that we had 200 people in a building killing themselves to produce a bad short movie that wasn’t going to be the answer to the client’s problem.’ – Johnny Vulkan, Anomaly

‘Agencies need to offer much more value to their clients than ever before but it’s precisely because they’re so big that they’re so slow to change. The genie is well and truly out the bottle now. You need to be able to adapt in real time, and you need to test your thinking as your producing it. Clients already want to work in a more nimble way. People’s attention is so fragmented and clients need agencies staying on top of what’s happening in a much more effective way and which are able to create something that works throughout different attention spots.’ – Sam Reid, Guided

‘Strip it down and the internet serves a basic human desire – it connects us to stuff. But, it also offers us more control than ever before. So the challenge now is to create ideas that people want to connect to, ideas that enhance lives.’ – Henry Chilcott, Antidote

WHAT HAVE I LEARNED?

SCOTT MELIN CEO OF FACTORY DESIGN LABS

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For me, this quote encapsulates the emerging dynamic of what we crudely call the ‘ad industry’.

THE CONVERSATION HAS CHANGED FROM, ‘WHAT DO WE WANT TO TELL THE CONSUMER ABOUT OUR BRAND’, TO ‘WHAT DOES THE CONSUMER DESIRE/NEED/EXPECT FROM THE BRAND?’

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This is uncharted territory for ad agencies. Ad expenditure is fragmenting along with media consumption. Long-held agency certainties are shattering – from team set-up to principles of effective communication. The challenges are numerous and daunting – they include getting to grips with constantly evolving digital channels, mobilizing and involving more empowered consumers and reworking the organisation to be more reactive, agile and innnovative. The new world order for agencies is flux (continuous change).

FLUX

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New channels – from search to geotargetting to apps, to tablet computing – are forcing agencies to evolve faster than ever.

BBH London recognised the problem and acted:

‘The problem is, creativity is way more complicated than it used to be. It’s a difficult process to man-age in this day and age. The world we work in has changed and we knew that if we didn’t respond we would no longer be able to deliver a sparkling crea-tive product and future proof our business.

‘These days BBH is unrecognisable from the company it started as. We’ve always been about advertising magic and the great idea, but now that thinking has been liberated by new technol-ogy and a vast new media landscape. The speed in which we respond to briefs has accelerated, clients demand more than just TV, Press, Posters etc. We have to look at brands as the whole story not just one piece of the pie. And that’s all good. But a business founded in 1982 is not going to be able to process these requests so we needed to change to embrace them and indeed, get ahead of them.’

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To quote Made By Many co-founder William Owen, ‘the future of advertising is not advertising’.

Broadcast is no longer first and last resort and controlled, one-way messaging is giving way to conversational marketing.The holy grail today is earned media.

For more on this, see Mr Owen’s peerless recent presentation on the subject:

http://madebymany.com/blog/my-talk-on-future-advertising-models-at-the-apa

JON BOND COFOUNDER OF KIRSCHENBAUM BOND SENECAL

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This is a quote from a recent Fast Company article – The Future of Advertising.

This sums up the tone of the article:

‘Over the past few years, because of a combina-tion of Internet disintermediation, recession, and corporate blindness, the assembly line has been obliterated -- economically, organizationally, and culturally.’

It’s a must-read: http://www.fastcompany.com/magazine/151/mayhem-on-madison-avenue.html

But in the interests of balance, be sure to read this BusinessWeek article that appeared just a week or so later, and shows the big four holding companies in rude health, and fighting back by ‘carefully, painfully reconfiguring their workforces to take advantage of the changing landscape.’

It’s also a must-read: http://www.business-week.com/print/magazine/content/10_49/b4206074203079.htm

‘MARKETING IN THE FUTURE IS LIKE SEX. ONLY THE LOSERS WILL HAVE TO PAY FOR IT’

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This is not easy to condense but my highly simplistic synopsis would be: ‘Think beyond messaging – think utility, entertainment, social currency. Think value, think meaning.’

WHAT IS THE MINDSET OF THE AGENCY OF THE FUTURE?

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I think Henry Chilcott, managing partner of Antidote, says it best with this.

CREATE STUFF THAT HAS A RIGHT TO EXIST

IN PEOPLE’S LIVES

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Antidote were asked to raise the profile of the cycling performance wear brand Rapha – it sug-gested pop-up cafes in New York and London to coincide with the Tour De France and beyond. The result was a massive upsurge in awareness and sales.

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Rapha’s London pop-up café.

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Burberry’s Art of the Trench - ‘A living docu-ment of the Burberry trench and the people who wear it.’ In sync with the participatory dynamic of much successful contemporary brand com-munication and successfully positioned Burberry in the burgeoning street style movement. Earned an estimated 6.8m in PR coverage and increased trench sales by 85%.

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Anomaly’s ‘Domaination’ campaign for Converse took the bold step of rethinking the traditional campaign as a game.

http://vimeo.com/8254341

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So far, I’ve talked a lot about how advertising has changed, but not specifically about what agencies need to do to stay relevant. The behaviours that follow are some of the key trends I’ve identified based on the interviews I’ve conducted and my continuing study of those agencies’ actions.

NEW AGENCY BEHAVIOURS

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The copywriter/AD team is arguably no longer fit for purpose in a communications landscape utterly transformed by digital channels. Both BBH London and W+K London now employing creative technologists and are reporting successful integration. The role is still vaguely defined but I like this description from Weir and Wong:

‘It’s someone who knew the ins and outs of technology and they were able to work out the creative possibilities of an idea. This person didn’t sit at the end of a factory-line creative process, but got involved in the strategy, the big idea, and then the implementation and how it grew from there.’

http://weirandwong.com/blog/creative-technologist/

HIRE CREATIVE TECHNOLOGISTS

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Many of the agencies I spoke to found strength in their networks. There was a refreshing realism at work, with both Anomaly and Made by Many readily acknowledging that ‘they couldn’t possibly know it all’ but were prepared to work with who-ever necessary to solve their clients’ problems.

Indeed, agencies are collaborating even when not solving specific client problems. Dentsu London and Berg have recently worked on a series of films, speculating on the future of media. The results are beautiful and thought-provoking:

http://vimeo.com/16423237

It’s a relationship that recognises that no one agency has all the answers, and which pushes and develops their own creativity, while enabling them to take the lead in the discussion about the future of media.

LEARN TO COLLABORATE

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Made by Many’s recent Signals experiment is a good example of this. Existing alongside their regular blog but fulfilling a more specific function in terms of positioning the agency as invested in particular topics. A lot of their work revolves around content provision so their Future of News and Future of Television signals are especially apt. The signals are ‘streams of content and analysis around the big themes they think are exciting and urgent’.

Leading and shaping the debate around these ‘big themes’ is an increasingly important way for agencies to market themselves and increase their visibility. Today’s hyperconnected world makes it easy for clients to see who the real authorities are.

http://madebymany.com/signals

BECOME AN AUTHORITY

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Of the agencies I spoke with only BBH have gone so far as to set up an actual ‘Labs’ entity within their organisation, but all agreed with the neces-sity of constant innovation and keeping up with technological and behavioural changes. The job of an agency Lab is to explore new expressions of creativity, and to act as a scout for the rest of the agency – pulling it into the future.

To quote Mel Exxon, founding partner of BBH Labs: ‘The role of Labs here boils down to two things, I think - 1. Reducing complexity (new stuff can look and feel labyrinthine at the outset, it helps to have a few scouts) and 2. Accelerating the transfer of knowledge.’

More here: http://www.influxinsights.com/blog/article/2636/why-agencies-need-labs.html

BECOME FUTUREPROOF

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Made by Many describe themselves as ‘thinking like a start-up’. It’s an attitude that many more established agencies may need to adopt in the near future as clients continue to drive down billings and means of production continue to get cheaper. An early example comes in the form of co:

Describing itself as a brand innovation studio, co: has assembled a network of best-in-class specialist agencies from which it can assemble teams to solve any brief. Co: itself remains lean and nimble, with minimal overheads.

http://www.cocollective.com/

LEARN LEANNESS

co: is a brand innovation studiofor the 21st century CMO & CEO.

MARCEL PROUST

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Forgive the slightly pretentious ending, but I want-ed to stress the wholesale nature of the changes besetting this industry. We have to learn our jobs all over again. We need new eyes.

‘THE REAL VOYAGE OF DISCOVERY CONSISTS NOT IN SEEKING NEW LANDSCAPES BUT IN HAVING NEW EYES’

THANKYOU!@AARON78

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ADVANCE.DK

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