Wednesday, November 25, 2009

The Challenge: Building the Future Agency

Here's an article from iMedia that challenges the way traditional agencies are structured and how they work, and describes how the "digital agency of the future" should be. Read on:

The skills digital agencies will need to lead

November 23, 2009


  • The digital age is typified by the advent of two-way communication channels and greater control over the timing of media
  • The digital agency is built for rapid concepts, creation, and implementation
  • When thinking about the pace of media's growth and change, the ability to deliver today while experimenting for the future becomes an essential attribute

Next in Media Planning & Buying

Here are the facts:

  • Overall advertising budgets are down.
  • Marketers are shifting much of the remaining budget to digital media.
  • Money that used to be set aside for things like sales enablement, website development, and so forth are now falling, more correctly, into the category of marketing. Specifically, content marketing. And that content is overwhelmingly digital.

Whether or not larger, traditional agencies will be able to adapt to the speed and new media in today's digital world -- via retooling or buying new talent -- is a subject of much recent debate. But this isn't the focus of this article, because what's more important are the attributes needed for any agency to succeed in this digital marketing world, regardless of size, location, or heritage.

Successful digital agencies are proficient in these four basic attributes:

  • Ecosystem structure
  • Knowledge/Tech Ability/Experimentation
  • Pricing/Billing structure
  • Speed of response

Ecosystem structure
In the traditional marketer/ agency relationship, there are many rigid roles, boundaries, and rules. But none are bigger than who owns and pushes the marketing plan. The thought process of old was that the ad agency had more expertise to own the brand than the company. And that model worked pretty well -- when media were limited, communication was one-way, and media-buy lead times were long and hard to change.

But the digital age is typified by two game-changing shifts:

  • the advent of myriad new media (the web, mobile, desktop, social media, etc.) that are two-way communication channels.
  • much greater control over timing of media buys and posting (think Google AdWords over upfronts).

In light of those shifts, far too much control would be given up by the marketer by entering into a traditional marketer/agency relationship. So, as Marty Neumeier writes in "The Brand Gap," "It takes a village to build a brand." Though, in this case, that village is now an ever-evolving roster of in-house experts, execs, and marketing folks who lean on out-of-house experts -- such as strategy consultants, design firms, and research companies -- working in concert to market a brand; in other words, a marketing ecosystem.

Like many digital agencies, my agency started as a specialty consultancy, which means we were working as an extension of internal marketing teams -- not as outside agency soothsayers -- before the shift went mainstream. It also meant we developed working relationships rather than rigidly-bound responsibilities.

In today's world, that teamwork goes much farther, much faster than a single point of control. Marketer and agency are more often able to be sure they have the same goals in mind, because they were created together, without the need for a formal pitch.

Knowledge/Tech ability
Allison Mooney, "Advertisers and brand marketers are entering a brave new world -- one where code is on par with content. The 21st-century ad isn't something to be looked at; it's something to be used." This is a huge paradigm shift, one that requires both new thinking and leadership, as well as requiring either large, traditional agencies to tear down and rebuild their established skills and seniority, or for marketers to engage new agencies.

Plenty of digital agencies say this: We were born digital. But that doesn't mean they're all Gen Y geeks raised with computers, video games, and texting (I myself fit squarely in Gen X). It implies a mindset, an approach, an understanding of how to creatively solve both technical and communication problems. The keyword is

Digital agencies understand "the next big technology" may only be around for a year or two, and it may be something we can't even envision today. (For instance,
this IBM study about the future of advertising done in 2007 doesn't even mention the term "social media" in the executive summary. And we all know it's hard to go through a day without hearing it multiple times only two years later.) But digital agencies are built to handle that reality.

Since we weren't making money off media buys to begin with, and we were trying to make our way into the conversation in any way we could, we helped create the new, better channels in which to engage consumers by restless experimentation. Therefore we have a good feel for why trends become popular, how long the trend will last, and how to be far enough ahead of the technology curve to find success for clients in the space.

The ability to deliver today while experimenting for the future is a good attribute to have when you think about the pace of growth and change in digital marketing.

Plain and simple: Procurement via RFP and retainers isn't the way to client/ agency innovation. That system puts too much pressure on generating "soundbite ideas" and estimated tactics, and not enough focus on content strategy, execution, and rapid adjustment. That system also happens to be the one that most large traditional agencies have been working in (and perpetuating) for decades.

By soundbite ideas, I mean that the traditional pitch has been flipped on its head. Instead of building creative communications on consistent, solid strategy, campaigns are sold by spewing out a tagline and then talking about why it will work. I'd compare the agency review process to the infamous Pepsi Challenge. Sure, a sticky-sweet one-liner will intrigue at first. But you have to think about the taste when you reach the bottom of the can, and how you'll feel after the sugar high wears off.

The digital agency, on the other hand, is called upon and billed by the project, which accomplishes two things in regard to cost:

  • There is no retainer paid during the time when no action is required. The marketer pays for a very specified time and deliverable.
  • It's in the agency's best interest to deliver ahead of schedule. Call it being hungry -- if the agency wants to maximize its own profit and be called upon again, it will exceed both timeline and expectations.

That's not to say there shouldn't be some long-term relationships between marketers and agencies. It's just to say that paying for focused time makes more sense than having people sit around coming up with random ideas to throw at the wall, or being paid to wait for a call.

Speed of response
The three previous attributes all feed into this one: The digital agency is built for rapid concepts, creation, and implementation. As for many digital agencies, this ability was first developed as necessity and -- in this ever-evolving marketing climate -- quickly became an asset.

When the client is a simple phone call from not only the account executive, but also the designer and strategist; when content producers are unencumbered by a rigid creative process or being tied to the media buy as a profit center; when there is an established teamwork vibe with a culture of experimentation -- cultivating creative technologists -- you'll be able to think of your digital agency as an extension of your in-house marketing team. And you'll have found your agency for future success.

John Lane is director of creative Services for Centerline Digital.

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