DANA POINT, CA: Agencies unable to prove they are driving value for clients risk becoming little more than "dust", a leading executive from Diageo has warned.
Marc Strachan, vp/on-premise strategy and multicultural marketing USA at Diageo North America, discussed this subject at the Association of National Advertisers' (ANA) 2015 Brand Masters conference.
And he outlined a transformation agenda which could help agencies resist commoditisation and the growing competition from consultancies, tech companies and other operators seeking to encroach on their turf.
"If you can't add and drive value, you become dust. You become a vendor. And I can buy vendors a dime a dozen," Strachan said. (For more, including details of how the firm is reorganising its agency relationships, read Warc's exclusive report: Diageo redefines the rules for agency engagement.)
Today's digitally-empowered marketing ecosystem, Strachan stated, is clearly defined by a "whole different dynamic" than in the past – meaning agencies, too, urgently need to adopt new working patterns.
"It's not just advertising any more. Advertising, in fact, in most cases isn't the lead dog on the sled any more," he said.
"If advertising is all you're bringing to the party – if all you're trying to do is sell me ads – I'm not buying."
By contrast, Strachan continued, "Partnerships are very important. But they are difficult to maintain, nurture and drive."
These partnerships do not apply solely to relationships between clients and their roster shops: agencies must now work together in delivering seamless cross-media solutions as well.
"My digital agency, my strategic agency, my off-premise agency [or] my executional agency may come up with a brilliant idea that everyone else has to conform to so we can find ways to fit it into the consumer dynamic."
Not only is the prior insurance policy of being an agency-of-record fading into obsolescence, Strachan asserted, but brand owners are increasingly able to challenge their partners on key points of data and strategy.
"Clients weren't as savvy back then as they are now. They didn't have people who could sit here and argue with their agency case-by-case on a consumer insight. But they do now," said Strachan.
Data sourced from Warc