The geeks are taking over, but where is the money?
A view from Danny Rogers

The geeks are taking over, but where is the money?

What are we British good at? Motor sport and aviation (historically), sport (all of a sudden), infantile fawning to the royal family (most notably the...

And this inventiveness is becoming apparent in the UK advertising business. My visits to various agencies in recent months have been eye-openers. I’ve seen Dare demonstrate a kids’ book that automatically adjusts the mood lighting in the room, Abbott Mead Vickers BBDO’s car sensor system that ensures safer cycling and VCCP’s nascent tablet-based holiday planner.

Where once ad agencies would turn on the screen to show the new films, today they introduce you to their esteemed geek, who will show you some cool gadgets.

How can we explain the rise of the inventor? Partly because it has dawned on brands that traditional advertising can be expensive and limited in ability to engage vital audiences. Marketing directors have looked at the success of Apple, Google and Nike and realised that breakthroughs in user experience lie behind their success, not simply communication.

Is this a game-changing consultancy model or have clients and agencies drunk too much Silicon Valley Kool-Aid?

It is also the result of squeezed margins. The old model whereby creative agencies take a cut of media billings has broken down and ad bosses have found it difficult to replace media mark-ups with advertising consultancy fees. For many, the development of apps or online content now looks more lucrative than making TV ads.

As much as anything, this innovation works because there is world-leading talent available in Britain for hire.

However, this new approach throws up major challenges for the creative consultancy. Structurally and culturally, agencies are still divided into teams of suits, creatives and planners. Today, technologists, inventors and developers understandably demand senior roles, high salaries and their own teams.

Moreover, there is a major question mark over the commercial model for such innovation. Despite the justified enthusiasm for these new offerings from ad bosses, few have offered me a cogent argument about how they will monetise them. The answer must lie in new ways of protecting the intellectual property of great ideas, and in either licensing them to clients or adopting revenue share models.

And, yet, this is largely uncharted territory. There is a dearth of case studies in which agencies and clients have signed mutually beneficial and long-term innovation agreements. In short, where is the money? The question looms large: does this represent a game-changing consultancy model or have clients and agencies drunk too much Silicon Valley Kool-Aid?

danny.rogers@haymarket.com

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