Most of us cannot remember the 3 martini lunch, or the indicators of the industry heyday that surrounded it. While every industry goes through economic cycles, some never survive that era's industrial or technological evolution. Today's technological evolution is focused around communication & information and will effect the advertising & communications industry more than any other. This technological evolution - best associated with broadband access and the evolution of online search, places us in the middle of a revolution not seen since the industrial age. Think of what happened to the railway lines at the advent of the automobile and the building of roads.
While the income within our industry has evolved to include multiple revenue sources, it is grounded in the concept of the media buy. As a testament to that, accounts up for review are still listed based on the size of their annual media budgets. From an agency perspective this has to change.
Unless agencies are prepared to invest heavily in technology solutions to rival the likes of Google & Yahoo they will eventually be cut out of most media buying. It will not be long before fully automated solutions touch traditional media buys such as publications and television. These traditional media buys will then become as much of a commodity as the online media marketplace has become today.
Our position will be farther weakened as management consultants like McKinsey & Co, Accenture etc. start to chip away at an organizational level within our clients marketing departments...and marketing budgets. For example, Accenture has recently been engaged by Wal-Mart to better align their ad spend and help select an 'agency' or grouping of 'agencies' to service their needs.
The form of advertising will also change completely, with brands having to integrate their message more seamlessly into online and offline offerings. In other words, the messages will not take the form of advertising as much as content. Remember, this is driven by technology and the consumer is now in control. 'Advertising' will undergo a creative convergence within content. Authentically so. Few large agencies do this well.
Smaller shops with lab-like environments will harbor artisans that come together to create bespoke solutions within this new media content mix. Bespoke - not just in content, but in form. These creative shops will live and breathe within the new media solutions such as: wikis, blogs, RSS & mash-ups, as well as be responsible for inventing new ones. How many of you are familiar with Renkoo, Gahbunga, Ning, and Squidoo? If not, get cracking!
Brands will allow their agencies to produce content that offers value to consumers first and advertise second. To win back respect and take control of the market from clients, agencies must share in the risk. In order to bring about true partnership, agencies should be willing to take compensation risks for quantifiable solutions. Not being willing to stand behind your own work is not a good sign. Without this alignment, opportunity will fall by the wayside like more junk mail. The new agency’s role will essentially be that of the Brand's associate producer - with the Brand as executive producer.
There are signs within the industry that we are paying attention, and not just to the shifting media dollars online away from TV. This years Lion's television commercial submissions are down 3%, while online submissions are up by 30% - a good sign our industry is reacting to the future.
In order to take control of what it is we know how to do best, the following needs to happen:
1. We must partner with our clients in paying for the development of our branding & line extension ideas. We can do this by lowering our fees, while taking a piece of the back-end. By doing so we are essentially going into business with them and aligning our interest with theirs.
2. Get away from our traditional approach to media and it's fast approaching commoditized media marketplace.
3. Change our fee for service vendor mentality.
4. We must invest in, develop and monetize intellectual property.
5. Creative is king!
In a nutshell, creativity & shared risk...our last hope........again!
Management Consultants Push Further Into Ad Business
http://adage.com/article?article_id=109690
Honda Sponsors Internet Reality Show
http://www.broadbandenterprises.com/news/detail.asp?NEWS_ID=8
A Sponsor and Its Show, Intertwined
http://www.nytimes.com/2006/04/17/business/media/17adcol.html?ei=5070&en=883e48b6f64ad909&ex=1145937600&adxnnl=1&emc=eta1&adxnnlx=1145314394-XXiSK8AHcddL0V/9GqAiSg&pagewanted=print
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