Is it time for the ad agency model to be Canned?

I can't remember how many times I have read or heard about the imminent demise of the advertising agency model.

Greg Delaney: co-founder of the content creation agency Watchable
Greg Delaney: co-founder of the content creation agency Watchable

"The buggy whip makers of our times"; "stuck in the Mad Men era"; "No longer fit for purpose",  the last rites have been read many times.

And yet, rather like Sepp Blatter, the model has seen off a number of challenges over the years from media shops, direct, digital, PR and then social agencies.

Despite the odds and the calls from these Cassandras, ad agencies have continued to mount the podium once again, declaring victory, before heading off to the gutter bar at Cannes.

Recently though, I have developed a suspicion that something potentially more seismic is on its way – after all, even Blatter eventually had to call it time. There a few developments that could shake the old agency model up a bit, or at least ought to give the luvvies heartburn while they knock back the Domaine Ott on the Croisette later this month.

Speaking recently with some people who work closely with a number of client companies, there’s a lot of talk about change. Change in the way clients now work and also change in the kind of agency partners they now need.

What we all know is that the CMO’s life is tougher and more pressured than ever, as they try to come to terms with a multi-channel, always-on world where they have to continuously hunt and engage with increasingly flighty and unpredictable audiences.

Put simply, they need to make more and more "stuff" to stay connected with their targets.

"Clients just have more channels they need to fill with more content", says Matt Miller, president and chief executive at the Association of Independent Commercial Producers. The rise of social and digital media simply means "more marketing materials are needed."

This need for "more stuff", which generally, but not always, translates as more film content, inevitably puts even more pressure on already strained marketing budgets. And the result of this is that clients are starting to look outside their pre-existing and time honoured agency arrangements and models, to try and find the people who can help them.

In response advertising, agencies have rushed to claim that they have the capabilities to fit this new need, at a price and within a timeframe. But it’s a price and within a timeframe that many clients are now unwilling or unable to pay or wait for. So they are starting to cut out the middleman to go straight to the manufacturer.

Recent research by eConsultancy found that more and more brands are bringing creative and digital efforts in-house, bypassing agencies and working directly with production company partners. The study showed that the share of brands claiming that they don’t work with any agencies at all doubled this year, to 27 percent.

The Content Marketing Association has found that 20 per cent of marketing spend now goes on content and eConsultancy’s review of marketing budgets shows 73 per cent of companies planning to increase their spend in this area.

A recent piece by the client intermediary Roth Observatory concluded that "the traditional marketing approach is at odds with content marketing disciplines".

They cite the need for "nimbleness and agility" and claim that: "To be effective, the content needs to be frequent, meaningful and engaging."

The shift from "campaign to continuous content", it concludes, calls for "new operational models" with the CMO as editor-in-chief, running a department that looks more like a publishing house than a traditional marketing department.

In response to this need, film and video production companies need to get out of their comfortable zone of commercials production and seize the opportunities afforded by film content, where costs and margins will be lower.

They will also need to add strategy and creative to their production capabilities, ensuring that brands don’t speak with lots of disparate voices, even if they are appearing in lots of different channels.

And as ever, the quality of the video content needs to be curated so that it remains high, even as the costs of production are inevitably lowered.

If all this starts to happen, we could be seeing a few men overboard on those ad agency yachts in the harbour at Cannes – jumped or pushed.

Greg Delaney is a co-founder of the content creation agency Watchable

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