One of the clearest themes that emerged from our conversations with leaders in the advertising industry is the changing division of labor within and between agencies and brands. For example, Aaron Duffy, Founder and CEO of SpecialGuest, says his agency continues to evolve its model as brands bring creative development in-house as a pseudo “internal agency” model. “The trick has been to ask ourselves, how can we compliment these internal creative teams rather than make them feel threatened by us? Is that possible?” he says. His answer to this question is “yes.”
Duffy thinks the migration of creative talent to brands and independent platforms is good for the advertising industry. “As a former partner at a production company, it was scary for our creative agency clients to see us working with brands because it seemed like a threat,” he explains. “But it’s become more of an amorphous world -- in a good way. Philosophically, the more creative people you can have involved at all points in the pipeline the better the outcome will be.”
Although Duffy is the co-founder of a creative agency, he believes that it might make more sense for brands to be internally concepting their own e-mails, social content, etc. “Brands can find great, creative in-house people to do these things, and no one knows their product better than they do,” he notes. “They often need to move quickly. Concepting an idea, getting it approved, produced and then posted sometimes happens in under five minutes. It’s hard to argue that you should add someone outside the room to that process.”
Duffy says he doesn’t feel threatened by these changes. “I’m not one of those people who is talking about the death of ad agencies,” he explains. “That’s not very realistic, and I don’t think it’s going to happen. Rather, they are evolving. For example, maybe it makes sense for that five-minute turnaround on a social post to happen with the in-house team, but when you really need to think outside the internal bubble for a major tent-pole statement, you find the creative partner outside your walls to help you do it.”
The trend toward greater integration extends to the structure of advertising and marketing departments. As Salesforce reports, they’re increasingly working together: “The majority of companies (59 percent) now share common digital ad and marketing budgets, and use the same teams to build campaigns.” This is why advertisers should be listening to what their colleagues in marketing have to say (and vice versa).
According to Nielson’s 2018 CMO report, 74 percent of CMOs “have little to no confidence they have the right technology in place to achieve their marketing goals.” This suggests that companies will be making larger investments in new technologies and digital advertising in the coming years -- a projection supported by data from Deloitte’s 2018 CMO Survey. In February, the survey found that firms were planning to spend 1.7 percent less on traditional advertising over the span of a year, but 15.1 percent more on digital advertising.
Marketers and advertisers are under increasing pressure to produce evidence that their campaigns are achieving specific, well-defined business outcomes. As Gartner’s 2017-2018 CMO Spend Survey indicates, marketing budgets fell last year as companies demanded “accountability for business performance” with existing investments. This is one of many reasons why it makes sense that 79 percent of CMOs “expect to invest more in marketing analytics and attribution over the next year (according to Nielson).”
This brings up another way in which brands are capable of greater self-sufficiency: they have never had more access to sophisticated analytical tools. AI can leverage the rapid growth of communication platforms (such as social media) to access a massive universe of data and engage with consumers. As advanced technology becomes more affordable and user-friendly -- and as budget and timeline pressures continue to push brands to consolidate their advertising operations and optimize their workflow -- advertisers need to be aware of the challenges they face.
Duffy says advertisers should expect to move to a project-based model. “My suggestion to anyone looking ahead is: If you want to be a creative in this world, don’t depend on the retainer,” he says. This means agencies need to hire versatile creatives, understand how to work with external production teams, and quickly adapt to changing circumstances. They need to be more agile and cost-conscious, which means they shouldn’t overlook UGC. And most of all, they need to renew their focus on what they do better than anyone else.
Key takeaway: The relationship between brands and advertising agencies is evolving. This will mostly come in the form of out-of-the-box thinking, “big” creative, executable ideas and innovative approaches to storytelling. As brands produce more creative content in-house -- and as advertisers are increasingly asked to prove the effectiveness of their campaigns -- agencies have to demonstrate how they’re uniquely positioned to add value to the relationship.
Note: The full report, titled Catch&Release 2019 Trends in Advertising: The Incredible Journey Back to Authentic Storytelling, is available via a downloadable .pdf.
Coming next: Trend five -- Digital Integration Fosters Human-to-Human Interaction
Photo credit: Werner du Plessis/Unsplash
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