Why 'ad agencies' could be on brink of extinction
This week, a CEO confided in me: "It's weird how both 'advertising' and 'PR' have become limited, old-fashioned and dirty words." And to this we could add "direct" and "billings" - all terms that have dominated the pages of this title for decades.
In an age when technology is the principal driver of creativity, and when all types of commercial communications are converging and personalising, much of the marketing lexicon is falling out of favour.
As examined here recently, even "digital" is becoming meaningless at a time when there’s actually little left that is analogue (although this term still retains cachet with brands seeking an overdue step change in progress).
But there’s another term, again central to our world, that is even more problematic – "agency".
Upon examination, this is a word that conjures up "agents": middlemen who take a cut. Agent derives from the Latin verb agere – to "do". Instead, however, modern clients actually want their agencies (read specialist "consultants") to think – or to collaborate.
The partners at Mother have been agonising over this recently, concluding that "an agent, as an intermediary to businesses, is an endangered concept". The partner Dylan Williams believes agencies will only survive if they can prove they know the consumer better than the client, and that few currently achieve this.
Meanwhile, businesses such as Bartle Bogle Hegarty and Albion are discovering that broader collaborations are the key to success. These consultancies are putting together teams of strategy and user-experience experts, as well as product designers and search specialists.
The BBH boss Ben Fennell says: "I increasingly believe that, in a creative business, it is at the points of ‘connection and juxtaposition’ that the magic happens."
And this is what many clients are seeking – a dash of game-changing magic for their brand. Interestingly, this is a concept that much bigger creative businesses now talk about, including the animation leader Pixar.
The danger to ad agencies is that if they can’t convince clients that they offer a shortcut to such thinking, then brands will find it elsewhere. Many fashion retailers, including Topshop, now produce their own creative content, distributed virally. Young technology companies are also developing their own content resource in-house.
It is a big challenge for established creative agencies because they have to rethink their hiring policies, new product development, even acquisitions strategies.
But I would argue it is worth the effort because, without reinvention on an almost annual basis, the "advertising agency" could be about as relevant as a Betamax recorder, or "New Coke".
This article was first published on campaignlive.co.uk
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