How Ad Tech Is Innovating Agencies, Not Replacing Them

It almost goes without saying that advances in technology can influence how business is done, and ultimately lead to a redefinition of what the “new norm” is. Fast forward a little more to the brink of a paradigm shift, and notice how big change is generally met with two reactions: enthusiasm about the possibilities or feelings of skepticism toward the unknown.

The advertising industry is an interesting example to consider. The business itself has always been a creative art, but advertising no longer exists solely based in the creative. In the midst of the digital era, amongst the explosion of new media and channels, brands have a unique challenge and an even bigger opportunity to reach customers in an effective and meaningful way by combining creative campaigns with data-driven insights available from technology.

The role of the brand and agency relationship is also subject to transformation. Historically, advertising agencies have provided value through building trusted relationships with clients, creating bold campaigns that drive brand awareness, managing budgets, and executing on media buys. While all of those value propositions hold true in the landscape today, the digital era has given rise to a new buying culture and class of customer: a customer who expects instant gratification and one who can be an “online mystery” in terms of their propensity to buy. Clicks used to be where advertisers hung their hats, but what about being able to see the customer journey from first touch to final buying decision?



Advertisers can have access to billions of data points that illustrate each action a customer takes on the journey before a conversion, so the opportunity in deriving value from data is clear. Putting the opportunity into practice can be a tremendous challenge, however -- and one that leaves agencies unclear of what their newly defined role in advertising really is. 

Aligning common goals will help agencies to become even more valuable. In addition to building the brand, engaging audiences, increasing reach, driving sales, and landing additional budget, agencies have the opportunity to implement technology for real-time feedback on campaign performance. Data-driven insights allow marketers to make flexible adjustments to their media buys, and get the most ROI.

Technology also helps marketers to better understand how each channel interrelates. Advertisers can see how each channel performs with respect to other campaign components -- and in essence remove the silos that may exist in independent advertising efforts. The benefit of this is the ability to shed light on how media and sales channels interact together, and then reallocate resources if it is discovered that one channel (which may be less expensive, but driving more results) is outperforming another (more expensive) channel.

Let’s say, for example, that a given campaign (and budget) is comprised of the following media buys: TV ads: 40%, search ads: 30%, and Facebook ads: 20%, YouTube: 10%. As the campaign rolls out and begins to make progress, let’s also say that the agency has access to real-time feedback and analytics. The data reveals that Facebook ads are reaching an exclusive audience not available on any other channel and are attributing to a large percentage of conversions; whereas additional budget has been dedicated to search ads although they are generating fewer sales. By monitoring how the campaign is performing in real-time, advertisers are better equipped to keep pace with customers, measure progress, and refine strategy if needed.

The most impactful advertising campaigns probably didn’t earn a place in our hearts and minds because the creative geniuses behind them played it safe. So here is my advice to today’s new, well-informed agency: try big ideas and new things, let the data inform decisions -- but use human thought to augment, and have a point of view, because there is no longer a safe option. To survive and succeed in the digital age, you must take risks, you must become informed, you must think outside the box, and you must evolve.

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