Big Q: Agencies, consultancies have much to learn from each other
by MarkLives (@marklives) What may the broader agency and marketing community learn from the rise of non-traditional firms now operating in the advertising agency space? What processes and practices are giving these firms an edge, and to what would the rise of these players be attributed, in spite of the best integration efforts by the traditional agency networks? We asked a panel of key industry executives for their take. Next up is Prakash Patel of Fogg.
Large consulting and technology firms such as IBM, Deloitte and Accenture have moved definitively into the digital-marketing-and-communications space ad agencies once hoped to dominate themselves. In the UK, IBM iX, Accenture Interactive, BAE Systems and Deloitte Digital UK already rank in the top five interactive agencies based on revenue; Accenture Interactive, part of Accenture Digital, was named the world’s largest digital agency network by AdAge last year.
Prakash Patel (@PrakashPatel_1), a seasoned strategist and data-driven digital marketer, is managing director of Fogg Cape Town. Previously, he was CEO of Prezence and chief digital officer of FCB/Mesh. Prior to moving to SA, Prakash spent over 18 years at some of the world’s largest and independent data and digital agencies in the UK. Now he is trying to keep up with tomorrow today and helping brands add value in the #TraDigital era.
With the world, let alone products and services around us, changing beyond recognition, we seem to always come back to this — the role of the traditional agency vs the role of the agency of the future, the new agency of now.
Since the birth of advertising, the consumer-experiences evolution continues at an unprecedented rate, and never more so than in the past 40 years, from digital to intelligence. Mobile becomes smartphone, TV becomes platforms, science fiction becomes reality. Technology becomes an enabler. Big data becomes businesses’ greatest asset and AI, virtual reality (VR) and augmented reality (AR) grab the attention of marketers.
The world around us has been changing at a phenomenal rate. Yet agencies have barely changed their business models to meet the needs of today’s hyper-connected consumer. Acquisition is short-term. Changing the mindset, strategy and proposition of the future agency is at the heart of the solution to these needs.
These changes have fundamentally changed the way we do business, communicate, connect, entertain ourselves and engage with one another, and indeed brands. Through this, we are no longer receptive to the old traditional ways of marketing. Yet agencies in general have barely kept up, evolved, or changed their business model to meet these new demands.
In short, some agencies are still grappling with who owns the brand, integrated marketing, data, technology, digital, and whose line is it, anyway, vs trying to understand the challenges facing brands today, from both a consumer-experience perspective and high strategic level. Creativity and marketing aren’t just about the big idea. To reach today’s consumer is complex, connected (or disconnected), is in real time, and is technically led and digitally infused, anywhere and anytime. It’s demanding and unforgiving. Without this knowledge or understanding, what is the role of any agency?
In general, the needs of marketing and brands have fundamentally changed and are no longer aligned to any specific model, let alone agency model. There are far too many components involved in today’s consumers’ (purchase or experience) journey that require integration and complexity at every single element, and it is through these challenges that the opportunity arises of a more-suited contender for the title of ‘new breed agency of the decade’ — firms and consultancies that understand the new wave of consumers and marketing, firms that understand the financial pinch and strategic imperatives being faced by C-Suite executives, firms that understand today’s complexities and nuances of the entire consumer ecosystem, that play across multilayered touchpoints rather than the messaging or communication, that understand the importance of digital transformation end-to-end, outwards and inwards, that are experts in ICT and see technology and digital as enablers to business problems, firms that sit with C-suite executives in resolving imperative issues and challenges facing their businesses.
Along comes the rise of the new players in adland, players who, for all intent and purposes, have over the past five+ years by choice or accident created a proposition to address these exact challenges and requests from executives — not advertising or creativity but through showing solutions, with supporting evidence through insights and intelligence from data and analytics, with robust technology, marketing and creativity1 in ways of connecting with today’s consumers in their space, on their preferred platform, a place where they may visit and connect intuitively with relevant and appealing experiences, underlined by an entire business strategy that drives the most-innovative and -effective path to purchase across touch-points, to resolve real business problems.
I believe today’s agencies need to connect all the dots, regardless of the touchpoints, and create seamless consistent brand experiences that drive end-to-end, omnichannel thinking that accommodates today’s consumer behavior at the heart of the solution.
So, despite the best integration efforts by agency networks more recently, in particular acquiring digital agencies to fill the only-perceived gap in their business model, they are still in some cases missing a trick or two behind the bigger picture and the new players in adland — attributes that most agencies are still grappling with and attributes that are far closer-aligned to the offerings of these new players and consultancies such as IBM iX, Accenture Interactive, BAE Systems and Deloitte.
The reality facing many agencies is to reimagine their business models, proposition and services to meet the needs of today’s brands and consumers with, in my opinion, data, analytics, technology and digital at its heart — to see digital transformation as more than a medium but a critical business enabler.
The continued rise and success of these new players is far more than simply being better-equipped to understand today’s touchpoints, digital or technology. Yes, “continued rise and success”, as they are here to stay and are most-definitely challenging the status quo of the agencies’ position in marketing and advertising and relegating them to second fiddle if they don’t evolve their business models. Their continued rise can also be attributed to:
- C-suite access
First and foremost, most of these players are not new to C-suite or board conversations. These consultancies already have working relationships as consultants directly with (or have direct access to) and, therefore, don’t have to go through traditional methods to reach decision-makers. They’re already there, sitting at the boardroom table, asking the right question and coming back with solutions to real business problems. The opportunity in most cases has just been a natural progression for most of these consultancies, with additional services such as advertising and marketing, content and digital, offerings that weren’t their core before.
- Business strategy
Perhaps the biggest questions these firms address is the high-level business strategy which most agencies have long abdicated to others or have been unable to answer. One could argue that some traditional agencies have historically created silos and departments to meet new needs vs creating an integrated business model that meets the needs of today. These consultants tend to address the big question and not just provide the big idea. Their process starts before that of a traditional agency and the possibility of their solutions are far-reaching and -wider.
- Inside-out view
The way these firms operate has been around complicated large-scale technical requirements, digital transformation, mobile and enterprises solutions, and the digital economy — which has played directly into the hands of consultants by allowing them to offer large-scale digital transformation solutions to real value-driven solutions.
“As marketing becomes more front and center for C-suite executives, there is a move toward providing a more holistic approach that includes both marketing and consulting,” says Seth Alpert, AdMedia.
- End-to-end execution
The new digital age requires more than the big idea or the creative execution; it’s about executing the business strategy at every single level, through every facet of the business and its customer touch points, outwards and not just inwards, ending with data and insights that in return drive the next fruitful informed interaction, experience or execution.
- Technology provides new experiences
In today’s cluttered world of mass media and execution, brands are fighting harder than before to create a wow factor that not only distinguishes them from their competitors but creates a real memorable experience. Technology provides this — and more — and it is at the heart of most of businesses such as IBM iX and BAE Systems.
- Building products and platforms
In an environment where innovative platforms created by companies such as Uber, Airbnb, booking.com, and Alibaba are based on disrupting traditional business models with intuitive, easy-to-use consumer interfaces and not advertising, the solutions are far more-aligned to consultancies or technically led digital outfits.
What may we learn
So what can we learn from the rise of these new breeds of competitors or shall we say, new breed of agencies? As from my perspective, it’s more about what are these players doing that agencies aren’t.
Brands are not made up of different media but are one single entity in the eye of the consumer.
- Consumers see a single brand and not media
I believe these consultancies have had a head-start in that they’ve have not been hindered by media and understand that consumers don’t see brands or fragmented businesses but experiences. They see a brand in its entirety as one brand experience, from the technology they use to the device they log onto through to the creative execution that resonates and seduces them. So, if consumers expect more and want more, agencies need to think more and give more.
- Digital is not only about websites and social media
It’s more about understanding the opportunities that digital has in reimagining entire businesses. These consultancies offer digital business transformation — a service offering never seen on any agency credentials.
This is still a fundamental asset that is still seldom used meaningfully in generating the big idea. In today’s world of big data, agencies need to thoroughly integrate data, analytics and insights into their proposition more meaningfully. Data has been, and still is, the untapped holy grail of marketing, in my opinion. A few forward-thinking network agencies such as Wunderman, Rapps Collins and rmg:connect (JWT) have been driving their marketing through data planning, analytics and CRM for decades but, overall, it’s still an untapped asset. In contrast, these consultancies drive their entire solution based on insightful intelligence and strategic planning to business needs.
So are consultancies able to creativity and compete against the world’s largest creative ad agencies? Creativity is still fundamental yet being creatively superior alone is no longer enough to win. But these new players are also quickly catching up. They are also now on the hunt for the very best award-winning creative talent, customer-experience designers, digital experts and technologists, and rapidly closing that gap through huge global acquisitions, just as agencies did so in the past to bolster their offerings.
So, in closing, broader agencies and marketing communities may learn a lot from the non-traditional firms which are infiltrating the agency space in unprecedented ways with new ways of thinking, new ways of marketing and new ways of connecting with today’s savvy connected consumer, from business strategies through to creative execution and analytics.
It is time to view consumers through their lens and not the lens created by agency business models.
Agencies need to go beyond acquiring outfits to meet perceived needs; they must reimagine their business model by understanding the total customer experience, driven by insights and business strategy at the core, enabled by technology and digital. This is something well within their reach if they can get their priorities and integration right and develop the capabilities brands need today.
However, the future is still very uncertain, as it is in a constant flux with no winners or losers. It’s hard to say that the rise of the new players is the rise of the dominant players in adland. Both traditional agencies and these new consultancies still have a lot to learn from each other. Maybe the future will be the collaboration of these entities to create the super-breed agency of the future.
Only time will tell.
- Big Q Consultancies: Ad agency, consultancy biz models converging — Andy Sutcliffe
- Big Q Consultancies: Difficult to shake campaign-dominant logic — Joshin Raghubar
- Big Q Consultancies: Problems used to be more one-dimensional — Wayne Hull
- Big Q Consultancies: You have to understand the context of clients — Heidi Custers
- Big Q: Can ad agencies take on the consultancies? — Jerry Mpufane
Launched in 2016, “The Big Q” is a regular column on MarkLives in which we ask key industry execs for their thoughts on relevant issues facing the ad industry. If you’d like to be part of our pool of potential panellists, please contact editor Herman Manson via email (2mark at marklives dot com) or Twitter (@marklives). Suggestions for questions are also welcomed.