Digital audiences are booming, measurability is keeping brands excited, the scope of digital creativity and platforms is exploding and budgets are up. On the face of it, digital could not be healthier.
With innovations such as the iPhone, the iPad and 3D TV getting into the hands of consumers, digital won't stop evolving and brands and advertisers have work to do just to keep up.
This evolution is driving fundamental change in brand opportunities through digital media and it's blurring the lines of traditional agency specialisations. Print, pre-press, TV and online specialist agencies no longer apply in the digital world, replaced instead by a raft of multi-purpose agencies that all "do digital". And how hard can it be?
In truth, agencies are overwhelmed with digital opportunity. So much more reach and range are at the fingertips of the creative and concept teams to bring a brand to life, but at the production end, the skills and expertise to do justice to this new breed of creative are hard to come by. And what's even harder is delivering digital production profitably.
At the same time, brands are demanding more from agencies. In the digital world, it really is possible to connect with individual consumers, influencers or buyers; the marketing opportunity is intoxicating but the surge in the type and frequency of digital advertising introduces new risks that brands are not yet fully engaging with or demanding answers to from their agencies.
For brands, the internet has the power to build and crush reputations in minutes and without boundaries. Quality digital production and accuracy is paramount for brand integrity.
The responsibility on agencies, as a result, is magnified. Unfortunately, despite the increase in revenue, the volume and precision demanded by digital production often has a habit of exposing an agency's cracks and turning potential success into a bid for survival.
Brilliant ideas can't save loss-making delivery
Fantastic creative ideas used to win clients and win budgets. But with procurement professionals involved in today's agency world, the need for more cost-efficient ways of producing work, the production mechanism, tools and technologies used and activation in market means the playing field will be levelled.
Profitability is the single biggest threat to agencies working on digital campaigns. Agencies are under the spotlight to deliver perfect output at the same time as facing a squeeze from procurement teams within clients' businesses. Agencies must adapt antiquated workflows to accommodate the fast-paced, perfect demands of digital or they risk disappearing.
In old school adland, it's an industry joke that budgets are burned in creative development before landing a grenade on the production team to "make it happen" with no time and no resource. Rather than the old adage of "not rushing ideas", the culprit here is a combination of poor estimating, a need for expectation setting, little risk management and a lack of control over scope and change management. Rushing through fantastic creative to get the campaign out of the door not only compromises quality, it also hikes the cost of delivery. Armies of freelancers are drafted in at great expense and co-ordination becomes so tangled that sanity, never mind efficiency, is hard to find. There is a better way.
Value and profit are driven by production
The new model for the digital industry already exists. What needs to change are out-dated attitudes. Agencies and clients need to embrace outsourcing of the digital supply chain, where specialist partners deliver specialist work, effectively, cost-efficiently and accurately. This isn't outsourcing where job books are flung over the fence to be delivered; rather this is engineering an ecosystem of partners in which digital can truly fulfil its promise.
Networks already offer specialist production shops, and businesses like ours stick to what we're good at. We let the creatives do their job and we take their ideas to completion in a way that makes the agency money, yet maintains the craft and brand integrity.
The car industry should be the poster child for digital. Building perfect driving machines is complicated. The model works because manufacturers hang on to all the brand equity, the design, aesthetics and intellectual property; the marque doesn't make its own brake pads, steering wheels or engine cylinders. A supply chain of external experts takes care of actually bringing the car to life, because they are established to produce specific parts and can do it in a more efficient manner.
If we apply the same logic to campaigns and comms, agencies build their reputations on creativity, clients can be confident of hiring the best skills for the job and digital production is transferred into the hands of experts.
A new approach for a new era
The challenge to all of us in the digital industry is to think differently. We need to tear up the rulebook of how agencies work and start working in parallel with how the advertising and business landscape is evolving and how economic and societal developments affect our daily lives.
Agencies need to take a look at their core value proposition and be open about where specific expertise really lies. If you're creative, the chances are you're not equally strong in delivery. Honesty will meet this challenge head-on and demystify which specialists can actually deliver on promises.
The pursuit of revenue has forever been the holy grail; but now there's a new prerogative of building a well-operated business, generating profit, guiding and educating the workforce and delivering a great idea. Great work is not up for compromise in this equation, just a shift in the balance of how clients can continue to be delighted by the agencies they entrust with exceeding their expectations.
The ideal is a progressive and sympathetic combination of skillsets and expertise delivered through specialist partners within a digital supply chain. This combination of skill and knowledge enables every link within the chain to perform to its greatest potential. If we are brave enough to challenge what has gone before and open our doors to new ways of thinking and working, the promise of digital will be realised for brands and their agencies.
- Digital budgets are growing as brands seek to engage today's audience
- Creative development needs digital expertise, plus bulk and volume adaptations alongside localisation abilities
- Attitudes must be refreshed to produce great communications and campaigns
- Embracing the digital supply chain is key to agency profitability.
- Ivan Skoric is the co-founder and managing director of TSL Digital