Commentary
The Definition Of Insanity -- Or, Manual Practices In The Agency Business
- by Cory Treffiletti , Featured Contributor, March 12, 2014
The agency business is in a transition period right now, from one that is manual and idea-driven to one that is more automated, enterprise-solution-oriented and data-driven. The obvious examples lay in the rapid expansion of DSPs, DMPs, RTB and other programmatic platforms, but there’s more to it than that. We’re seeing efficiency and technology brought to the buying process, the creative process and other areas where inefficiency has been bred, and where agencies kept doing things the same way over and over, hoping for a different, less painful outcome.
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Agencies and their massive holding companies are starting to realize they need not spend so much time, attention and resources on the outdated process of financial buy management. Instead they can reallocate resources towards billable, strategic endeavors. This movement started with the birth of the agency trading desks and is continuing to take hold as the role of these platforms expands beyond display and into automated buy management across multiple channels and media.
Research is another area where traditional ways of doing business are being supplanted by quicker, more efficient methods for gathering intelligence. Digital media, especially social, is a breeding ground for massive consumer insights. There are tools being created for self-service social insight aggregation, and these insights can be used to identify trends as well as test creative, etc. Many of these tools are being developed at stand-alone companies, but I would argue that making them a piece of a larger platform would be more valuable than keeping them separate.
Media discovery, insertion order management, billing and reconciliation: these are the areas of media buying where much of the inefficiency lies. So if agencies can take advantage of those toolsets and create their own enterprise, cloud-based solutions by stitching them together, then the next few years will see a resurgence in what they are supposed to be doing: adding value through strategy, creative and coordination of “big ideas.”
To be most effective, the holding companies are going to have to centralize systems in the way the largest organizations have done. A holding company with 15 different media buying shops can no longer manage 15 different buying solutions. That is the definition of insanity. Standardization within agency holding companies will create efficiency over time, even if it’s painful in the short term. This is a ripe period for any technology solution that caters to agency media buying. This is the time when the foundation will be set for many years to come.
I wonder how many agency people will read this and agree with me, versus how many will argue my points. Do you see the inefficiency in the business to date?
Hi Cory,
I agree with much of what you said, however, we have discovered that clients that adopt the more automated, data-driven solutions often forget, as you pointed out, the need for excellent strategy, creative, and a "big idea" as a foundation. Without that, you're just "******* in the wind."
The quote is because Albert Einstein also believed "God doesn't play dice with the world". But I think marketers see too many weird outcomes to agree with him - for any marketer to choose consistency vs dice.
Nice post, Cory.
And, whilst I agree with Sean on the importance of the 'big idea' and creative input, I believe that we are about to see a step change in working practices in agencies.
Pete - true, but Einstein didn't know about quantum physics :)
I don't know anything about quantum physics either, but I do know that the insanity of which my namesake spoke has spawned the generation of idiots that he predicted would result from our insanely misguided reliance on technology.
One key challenge with adopting automated solutions like those you suggest is that massive assumptions get built into models. And while the originators of the models are well aware of the limitations that gives to a model, those limitations are quickly forgotten by everyone else. Too often, in the end, automation leads to egregious error. In engineering we learned of the errors in automated design with critical structure failures (domes, shopping mall walkways) that more reliance in the human would have avoided. In advertising, we would sadly never learn of the degree and severity of errors made by agencies who lack the rocket scientist knowledge required to control too much automation...and it can out the agency at the mercy of a group of experts that the agency lacks the ability to evaluate (they might be good...or not...how do you know?). We should move carefully into this theory of automation.