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Reinvent ad agencies

Opinion, 28 August 2017
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Mike Teasdale looks at what ad agencies can do to get out of the rut in which many of them find themselves as they watch competitors such as management consultancies move into their territory

I will declare my hand straightaway. I am an ad agency guy through and through. Other than a newspaper delivery round when I was a kid, I have only ever worked in an ad agency. That's almost thirty years as an account planner, at the coalface of advertising strategy.

In that time, the coalface and everything surrounding it has changed. We now live in a world where the dominant media format has changed from a big dumb box tethered in the corner of your front room and capable only of talking at you, to a five-inch smart screen in the palm of your hand and capable of providing an interactive multi-contextual experience while you are halfway up a mountain.

For an industry that prides itself on creativity and helping brands respond to change, ad agencies have been remarkably slow to pivot in response to the new digital world in which we live.

As a result, we are playing catch-up with a new wave of competitors better geared to meeting the new consumer needs made real by the empowering effect of the internet and social media and mobile technology.

These new competitors are not just specialist channel agencies or specialist medium agencies but also a new breed of in-house client creative units, data tech consultancies, and management consultancies using their wallets to acquire creativity skills. Worse, the lack of transparency around programmatic buying is encouraging clients to cut out agencies and deal directly with tech platforms like Google and Facebook. In a world where everything is changing, there is no reason to assume the value chain of advertiser to agency to media owner to consumer will last forever.

It's no wonder cost reduction pressure is so intense, and brand short-termism and inconsistency are so rife. Traditional ad agencies are feeling pushed and pulled in all directions as we try to get by on squeezed margins while more suppliers vie to help clients fill more channels with more content without an increase in marketing budget.

I want ad agencies to regain their momentum and competitiveness but to do so we need to reinvent ourselves from the ground up. A tweak here and there won't cut it. We need to change how we are staffed, structured and remunerated. So, how can we do it? Here's my three-point plan.

First, we must create a stable emulsion of data and creativity. And fast. It boils down to how quickly ad agencies can embrace data vs. how quickly the likes of management consultancies can embrace creativity. It should be easier to acquire data skills than creativity skills but ad agencies are not as ruthless as management consultancies, and our pockets are not as deep, and we are on the back foot. Plus, I worry that many ad agencies still haven't truly grasped that the very nature of marketing creativity is changing forever. Marketing creativity nowadays needs to be more than awareness-seeking creativity; it needs to be also data-based creativity to discover customer insights or develop innovative new products or design a user experience that is individualised. The answer to the eternal marketing question of 'what's the best way to boost sales?' is no longer simply 'raise awareness', so the solution needs to be much more than a TV campaign. Yet ad agencies continue to lead many a creative presentation with a TV campaign. Why?

Second, agency holding companies need to sweep away agency brands. As an agency guy who has worked at some of the most famous agency brands, this advice hurts, but the reality is that clients don't need them.

If we were starting from scratch today, we wouldn't create a load of overlapping agency brands each capable of only one part of the client solution and then try to make them work together in a suboptimal way. No, we would create one omni-company with all the skill sets under one seamless roof.

And third, the agency holding companies need to invest. Invest in the hiring of software engineers, designers and analysts. But also invest in setting up our own management consultancy units. Why not? Management consultancy firms are buying into us, so why can't we buy into them? At the very least, we need to be strategic power players with highly specialist, flexible and collaborative delivery partners we can bring in when needed. But that, as George Harrison sang, will take time and a whole lot of money.

Can we do all this? Yes, we can. One of the wonderful characteristics of ad agencies is our can-do attitude. Nothing is impossible, as one famous ad agency brand likes to say. But – and this is a big but – we can only do this if we don't think what is needed is a better dinosaur.

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About the author

Mike Teasdale is Director at Left-Handed Planning. His 25 years of experience as a strategist in top ad agencies such as BBH, BBDO and Lowe help him advise clients on how they can spark and nurture opportunities for creativity.

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