Commentary

The Future Is Automation For All Agency Services

Do you want to know what the agency of the future really is?  It's all automated.

I've recently come to terms with the fact that the agency business is almost 100% commoditized as a result of its own ineffectiveness and unwillingness to adapt.  The agency of the future will be 90% automated, with only minimal human curation of the data and the systems that are put in place, and a modicum of strategy applied as well.  The human component will exist for top-level strategic thinking, and to develop research and POVs on data opportunities and evaluate new platforms -- all of which serve to further automate the media planning, buying and execution process.  Oh, and let's not forget humans will be there to provide IT assistance for when the systems inevitably have hiccups.

The digital side of the business is headed to this realm of automation and there's not too much anyone can do about it. The simple fact is, there's too much confusion, too much clutter, too few trained professionals, and too many fly-by-night solutions that profess to be expert but actually serve to bring down the average performance of the category.

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 Agency/client relationships last an average of four years in the digital world, and slightly longer in the offline world. The debate between content buying and audience buying in online won't even be relevant in five years; the "content" buying component of digital media is being automated, for better or worse, and the "audience" buying model is proving to be effective.  The results are clear.  Using data to drive targeting works  -- and this can all be mechanized.

The offline world won't be far behind, once RFID tags or some other measurement solution are placed in print ads (assuming they don't all shift to iPad-esque versions) and TV shifts to a 100% digital, accountable model (which will definitely happen in the next 10 years).   Even outdoor ads are going to be tagged with GPS transponders that will measure the volume and average length of exposure by monitoring coordinates for cell phones in a strict vicinity of line of sight to the ads. 

The agency of the future will have a creative team that develops a concept and a list of assets, and then loads those assets into a dynamic ad delivery system that tailors the ads to whatever location they're delivered, whether it be TV, online or other.  Those ads will report back to a centralized dashboard of activity that also measures sales in real time. Optimization will happen in real time with those same dynamic ad systems coordinating assets against proven targets.  It may sound like a pipe dream, but even video can be executed in this way.  It may not be as creative as some of the executions you see now, but the almighty dollar rules the game, even in the world of mad men.

The agency of the future will have a media analysis team responsible for inputting a media brief into a DSP-type system that then spits out recommendations, across multiple media formats, and plugs into those ad development and delivery systems I just mentioned.   The real digital dashboard will be available for them to review, as well as for their clients to review (which means account execs are out of a job, too). 

I know it sounds dismal, but think positively for a moment.  What this model will do is reduce the headcount in the agency structure and focus the open headcount against specialized, data-centric professionals who can't be commoditized and who can't be outsourced.  These specialists will provide true value, and these people will have to be trained to use the systems and understand the process by which that new agency paradigm will operate.  This model makes the agency valuable again, outside of just "shaping" emerging media for brands.

You can argue until you're blue in the face, but if you know how the major holding companies are run, with their profit margin goals and growth projections on an annualized basis, then you understand that a more specialized, lower-headcount, lower-cost solution means a higher margin and more reinvestment opportunities.  Technology is the way of the future in most categories -- and I now firmly believe that it will be the way of the future in this one.

Tell me I'm wrong, please.  I would love to see it another way!

13 comments about "The Future Is Automation For All Agency Services ".
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  1. Michael Nevins from Smart, November 24, 2010 at 10:24 a.m.

    No, you are not wrong :) You need only watch the investments, including those made at the holding companies.

  2. Stephen Shearin from ionBurst Media, November 24, 2010 at 10:26 a.m.

    No argument here, and why shouldn't a market-driven industry streamline as such? Leave what requires daily immersion, specialization and focused talent to those who have selected that as their profession and take control of what makes sense to control.

    If I know I want to hit x age group, skewed toward y gender with z income bracket, I don't need someone to help me activate that with a surcharge. But if I'm uncertain how to be best received by said group, I will look to a pro.

    There is certainly no need to call a travel agent to book a flight to Vegas, but there are still travel agents to be found where they serve a valued service.

  3. Thomas Kennon from Free Radicals, November 24, 2010 at 11:22 a.m.

    Guys, guys, guys - this is hopelessly and myopically skewed towards a vision of the future which - I would argue - is hopelessly and myopically anchored in the near past & failing present.

    In a word, it presumes that "advertising" remains the dominant activity of the agency of the future.

    I don't disagree that smart, seamless & efficient automation will certainly be driving the service and value engines of future marketing agencies (at least the ones that survive or bloom anew).

    But it's gonna look a whole lot more like a social call-center dashboard, real-time listening intell & all-channel optimization toolkits than the old-school-of-the-future ad server world that this piece suggests.

    @tkennon | bigevidence.blogspot.com

  4. Myles Younger from Canned Banners, November 24, 2010 at 11:26 a.m.

    I agree in principle. There's no way a system that requires that many staff can survive in its current form. There are a ton of things that agency staff do (or don't do) that can be highly automated. However, I think digital media pundits go a little overbaord with the "data and math will dominate advertising" mantra. All too often it's used as a justification to predict the demise of the agency. In the foreseeable future, advertising will still require clever humans to dream up concepts that will appeal emotionally to other humans. Anyone who thinks that you can dump a bunch of assets into a machine and an algorithm will magically spit out the "perfect ad" doesn't fully comprehend why advertising is successful at altering people's behavior. Now...whether those clever humans are working at agencies or if some alternate business model arises is another question entirely.

  5. John Baker from Mirum, November 24, 2010 at 11:28 a.m.

    I agree with that the day where all media is served is coming fast. And that the model you describe has been proven in search, is spreading to online display and will move to "traditional" media (see the What If link below).

    The only bright thought for us humans is that automated solutions don't always produce the solution an advertiser needs. Think of how optimized DM like the old Publisher's Clearing House mailing showed bigger and bigger cash prizes on the envelope to improve decreasing response rates -- until someone does a simple well written letter and breaks the category.

    People are attracted to breaks in patterns. Computers are still basically calculators.

    It will take longer for Google to pass the Turing Test then Sony to make a digital paper. There will be a role for us cantankerous humans yet.

    John Baker
    JWT
    www.altacricle.com

    http://altacircle.com/blog/category/what-if/

  6. Denise Zimmerman from NetPlus Marketing, November 24, 2010 at 12:02 p.m.

    Hi Cory - come on. Are you just talking about media agencies? or are you trying to stir up convo. Right on the media serving, ad buying and targeting side when it gets to point of planning and execution but way wrong in terms of the overall POV, particularly for full service digital marketing agencies - and especially for those with a strong footprint in social. Strategy, creativity and ideation will become increasingly important - because of some of the things you outline. Our most successful programs and others that you know of are successful because they are driven by sound strategy, concepts and ideas that tie to objectives. In addition, the increasingly critical importance of social media integration, ideation and execution is in total opposition to this POV - as demonstrated by real world case studies. So the point about automation of digital media as defined by the buying, placing, optimization and data side of media- is valid - but only in that limited scope.

  7. Greg Alvarez from iMeil, November 24, 2010 at 1:27 p.m.

    No doubt you're a Matrix fan. Based on your predictions, we all end being the Tanks, Dozers, Links of that movie... interpreting the data the monitor shows and taking actions according to what we presume is best.

    Some time ago I read an essay that was claiming agencies and media will be put aside, since automation will take charge of such activities. I thought about it and concluded with something like "in fact, why I do need MindShare, for example, if I can do a direct buy with the very owners of the channel where my target is present". But for this to happen, channels need to decrease price, like those of Google AdWords.

    Anyhow, to beat the status quo you will need more than just automation or technology.

  8. Joshua Rex from AP, November 24, 2010 at 5:08 p.m.

    You are spot on!! It will take 10 more years of fat....

  9. Christina Inge from Measurable Marketing Strategy, November 25, 2010 at 11:46 a.m.

    Just like we haven't started taking food pills instead of eating, we're not likely to see a future where agency work is mechanized. Agencies are moving from a focus on advertising to more social media and content-driven strategies, which can't effectively be mechanized. And the increasing emphasis on sentiment analysis as a vital metric that this shift is driving means that even measurement requires significant human input, since no current sentiment analysis platform is all that accurate.

    I think what we are seeing is increasing pressure from clients to devalue our work, and price it as a commodity. Rather than bowing to this pressure to commoditize quality agency work, we should be educating the market to see that experienced agency help is vital to effective marketing programs.

  10. Ira Kalb from Kalb & Associates, November 25, 2010 at 5:43 p.m.

    You make some very good points. There is no doubt that better metrics are creeping into the marketing and advertising business, and it is about time. As they do, companies are finding out what works and what does not quicker. There will always be room for people that know how to create better marketing strategies and content. The problem is that too much of it is not very good. The evidence of this is that during a downturn, companies lower their marketing/ad efforts. If they trusted that the content works (or if marketers proved that it does), they would not do this. They would increase them. The movement of ad dollars to social networking and other channels is putting further pressure on traditional channels. Automating content creation may be possible, but the experience with expert systems and artificial intelligence to date indicates that human creativity and ingenuity is still required. I see marginal players eliminated, but those that know how to create and market better content will also have a place. That's my 2 cents.

  11. Chuck Hengel from Marketing Architects, November 29, 2010 at 7:58 a.m.

    Probably wise to assume you are right. When I think about fragmentation and complexity, the sheer amount of effort required to manage advertising a brand will require meaningful advancement to technology and integration. Seems the volume of that work will be the larger part of success in the future.

    Strategy, the big idea, and conceptual thinking will remain a constrained resource, and the illusive mana we may always find in short supply. Why not be realistic, and plan on it staying that way?

  12. Rohn jay Miller from Alpha|Beta, November 30, 2010 at 12:55 p.m.

    The biggest problem agencies face in online display media today is creative exhaustion. You target a consumer and re-target and re-target ten more times and its hard to develop enough meaningful iterations to engage with the consumer--especially interactively. Campaigns end up as background noise because we haven't figured out the creative/content strategy appropriately.

    I'm up to my elbows in the real-time targeting DSPs and Ad exchanges can afford in online media, but I see the issue of creative/content exhaustion becoming a strategic problem that only the best agencies will be able to create new models for.

    Besides, who's going to take me golfing and buy me expensive dinners?

  13. Matthew Wood from Razorfish, November 30, 2010 at 7:38 p.m.

    Why does this have to be viewed as "all or nothing"? Clearly some aspects of digital media planning/buying can, and should, be automated ( or , at the very least, made far more efficent.)
    However, and notably, this is not ALL clients, and their agencies, are looking to do. It's just one aspect. Think bulk mailing or flyer drops are just one aspect of overall DM, for example.
    The sky is not falling..although here in Seattle the rain certainly is!

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