Consumers are evolving faster than advertisers ever wished they would. The biggest advertisers are falling behind their consumers more than anything else. Agencies, advertisers, consultancies, tech firms and even start-ups are facing an identity crisis, trying to find their corner in the new consumer marketing ecosystem.
In a typical servicing industry, you get to interact more with people who worry about today. I make sure to spare time worrying about what’s next. Every now and then, you hear some voices questioning the future of the agencies, but here we are, stronger than ever, focused and determined to continue the journey of connecting brands with consumers. Specifically, media agencies are strongly equipped to solve the complexity of today’s consumer: investment, media and tech relationships, consumer intelligence, diverse talent…the list goes on. I always quote Publicis Groupe’s Rishad Tobaccowala, who said: “Agencies are like cockroaches; they can and will survive anything.”
Where are we headed? This doesn’t mean agencies are going to get to where they want; it just means they have a solid chance and, hopefully, the leadership and resources to do so. Here, I’ll try to share my view, summarized in 12 points, on where the industry is heading in the next five years, assuming the players do the right thing.
- Intent and demand generation. The role of the agencies will evolve. The aim is to grow vertically by working with advertisers to consult on how to harness the intenders who engage with the brand. Also, most importantly, the goal is to help generate additional demand from consumers. The industry is shifting from pure paid media to a complex ecosystem that includes peer-to-peer interaction and influencers, among others. Agencies’ role will continue to expand, bringing more business to advertisers by creating a need, expanding the category or simply stealing market share.
- From cost to value. This evolution will settle with media that talks business. The legacy of delivering cost efficiency and hard cash savings will always be a reason for advertisers go with a media agency. What we’ll see next is a much stronger correlation on how the agency can add top-line revenue directly to the advertisers – and much more accountability coming from the agencies. This is not only to show the direct correlation but, more importantly, to get compensated based on it. This will continue to allow agencies to diversify their fee model into tech fees and more result-driven models.
- Platform-led organization. Agencies need to reinvent the way they operate internally. Moving away from legacy processes will ensure that they are focusing their time on building the right capability instead of working on mundane and repetitive tasks. Advertisers need to also start understanding that 100-page presentations are not the way to assess an agency’s commitment – they need to embrace automated visualization, tracking, analysis and snackable content.
- More for less might actually work. The pressure on advertisers has always been passed down to the partners. Technology will be the key to allow the ecosystem to find efficiencies – meaning, how do you maintain quality and increase speed while lowering the cost? Going forward, moving toward a platform-led organization will be essential. From an agency perspective, automation is two-fold: how to simplify internal processes to have more time to strategize and how to optimize the time we spend connecting with the consumer.
- Collaboration will be the biggest change that agencies will – or at least need to – go through. Technology will keep disrupting internal processes; specialization will continue to be built to cope with the complexity. The agency model will have to accept overlapping reporting lines and fewer silos, underpinned by technology to facilitate the flow of knowledge and collaboration. Externally, the model will become more hybrid – a triangular model between agencies, advertisers and partners. Agencies will need to learn how to better orchestrate and involve the external partners as an integral part of the solution.
- End-to-end experiences and services. The drive toward delivering end-to-end experiences has two consequences. The first is for the consumer to experience a personalized, omni-channel experience. Second, we will start seeing more consolidation as the lines between media, creative and technology are blurring. The future of smaller players will continue to be positive, yet in an evolved way.
Agencies will continue to invest in data, tech and talent to harness and understand consumer signals. Advertisers will bring their data in-house and rely more on their agency to provide context around people’s motivations, attitudes, behaviors and more. Universal IDs will remain key to building the needed segmentation in a digital world. These profiles will live across partners, channels and dimensions. This new “full-service”, client-centric model will enable agencies to combine their strategic input on media and communications with back-end technology and integration, delivering business accountability and results.
- Marketers will shift to usefulness. Consumer habits and expectations, digitization, the demographic shift and the proliferation of media will force marketers to prioritize on delivering added value or experiences instead of typical advertising. This will naturally gravitate the contact with consumers toward a more personalized message focused on content.
- People as media channels. With peer-to-peer rising in importance, advertisers and agencies will continue investing to better understand and provide content and utility in order for consumers to become their new media channels. This means the importance of earned media will continue to gain importance and momentum.
- Data ownership is obsolete. The industry, both globally and locally, has progressed rapidly in the past years. In conjunction, the typical user journey is no longer linear. With the availability of data on one hand and the unpredictability of consumers on the other, it’s no longer only about what data you own; it’s about how you access that data and link signals, and the tech infrastructure that powers that intelligence and connectivity.
- Supply side to work harder for their dollar. Till date, tech or media partners are in the business of selling what they can provide and not yet what the client needs. With global pressure on the big players, the industry will correct itself and add more accountability to the supply side, which will have to be more fluid, transparent and accountable to deliver on clients’ business results.
- Self-employment marketplace. Cost sensitivity and the growth in the numbers of self-employed individuals will put positive pressure on agencies to build marketplaces that can benefit from these shifts. Technology will also be the driver for this change, breaking geographic boundaries, leading to globalization. You will no longer have to depend on talent in your HQ. Regional talent will start playing a bigger role in our business, delivering more impact to our advertisers. Self-employment will become a whole new economy by itself – bigger than the current workforce.
- War on talent. The shift toward data-driven marketing will translate into a talent war. High demand for data, tech, analysts and broadly entrepreneurial skills will lead to a war to attract the best talent. The talent pool will start flowing faster between tech firms, consultancies and data and media companies. The type of talent will evolve and we will see more specialization and more generalists that came from a specialist background.
Publicis Groupe just went through an existential transformation to have a chance to deliver on these changes. The future cannot be built on the pillars of the past. We will always remain in the business of connecting brands with consumers. We will slide away from being a media agency; we’re a partner for our clients to deliver business transformation in marketing and communications. We need to make sure our partners deliver such transformation, so we can continue to exist and grow together.
