Ad Agencies: De-commoditise the ad industry

Ahmad Abu Zannad
Leo Burnett

In a landscape where clients are looking for different solutions and ad agencies are suffering from a lack of differentiation and the threat of disruptive new entrants, agencies need to avoid commoditisation by reinventing the business model, creating more value to clients and capturing the next wave of growth.

It is a fact of life that certain industries are continuously facing the threat of extinction. While many factors contribute to the demise of these industries – disruptive new entrants, advancements in technology, economic circumstances – the main problem lies within their own organisations: the lack of real innovative thinking when planning for the future and failing to understand that what worked for them in the past will not rescue them from the threats facing them in the future. In our recent history, we have seen Netflix dismantle the DVD rental industry and eventually take it out of business. We have seen Uber disrupting the transportation industry and Airbnb disrupting the hospitality industry, and how these two new entrants threw into serious question the fate of these two humongous traditional industries. Today, there is no doubt that this very same threat is facing advertising agencies, and if we fail to do something major about it, we too will be facing the threat of extinction.