Will Agencies Be Left Behind In The People-Based Marketing Revolution?

Working in advertising and marketing requires two things: an obsession with measurement and a strong opinion about agencies. Some have positive opinions and some have negative. But one thing is not up for debate: The value of agencies is at risk in the coming era of people-based marketing. 

With products like Facebook’s Atlas and AOL One incorporating login data and Criteo’s embrace of the hashed email address, people-based marketing’s widespread adoption is inevitable.  Forward-looking brands and advertisers already clamor for it. Previously, it had been a pipe dream, guessed at with probabilistic data. Now, at the cutting edge, deterministic data is being leveraged by the smartest players in the game to institute their own people-based marketing models. 

This type of offering is not just gathering momentum—the industry has crossed the Rubicon (the proverbial river, not the innovative firm also dipping its toes into the space). We know from our own experience that people-based marketing campaigns are among our fastest growing campaign types. These campaigns deliver superior results and brands can measure them with far more precision. 



Nearly all of the people-based campaigns we’ve been involved with have been client direct. That dynamic is a foreboding sign of the predicament that the agency world may find itself in if it doesn’t up its game in the use of first party data and people-based marketing. 

People-based marketing uses first-party data as its cudgel. Platforms and other entities that have had access to first party data for years (Facebook, AOL, Google, etc.) have developed a reputation that engenders trust with the data. This dynamic, in which first-party data is shared, built on trust, has taken years to develop. Our track records and experience in handling first party data in a conservative way with the utmost respect for the end-user makes the foray into people-based marketing an easier decision for brands and advertisers. 

For a subset of platforms and companies, handling data is our bailiwick and the small community at the forefront of people-based marketing all know each other’s strengths. As different as we all are, our shared value is our commitment to privacy and security of data. Instituting safeguards to reflect these values like the aforementioned trust, has also taken years to develop. Adopting the storage of data may not be the best use of agency resources. Brands inevitably change agencies and moving first party data presents huge technical challenges. It requires the best data engineering, data architecture, and data science minds in the business to do it smoothly.  For brands that have already learned to house their data, trusting it to an intermediary seems superfluous and harmful. 

Beyond the questions of security and privacy, does the market really know if agencies can be trusted to truly understand and leverage first-party data for people-based marketing? It is essential that an agency integrate the company’s goals at the highest levels. If agencies were to own or access this trusted data, their relationships would need to extend beyond the usual contacts on the client side--they need to include the CMO, the CTO, the CIO, even the emerging Chief Programmatic Officer. 

It is imperative that advertising agencies establish their “nerd cred” and fast. While we’re still in the early innings of people-based marketing, an ability to leverage data and make it a useful tool is paramount to each people-based marketing campaign’s success. The general consensus is that agencies lag behind on this front. But there are are outliers, and those outliers may, in fact, be representative of the efforts the industry itself is making. 

The Wunderman network has emerged as an aggressive and innovative thought leader by empowering its data management arm, KBM Group, to make strategic acquisitions like that of I-Behavior and integrating its DMP, Zipline with its larger practice. Wunderman has even gone as far as to create their own Center for Advanced Analytics, a heralded initiative that has gotten the reputation industry-wide of developing talent and pushing innovation. 

This is an example of an agency putting itself into a position to succeed in the new era of people-based marketing. When agencies access and masterfully use this trusted data, they truly own the relationships and the campaigns. They are at no one’s behest but their clients. Agencies who have not kept up and invested in the future by honing their data game will find themselves behind the 8-ball as people-based marketing envelops the industry. 

That said it’s not too late for agencies to become leaders of the movement. In the people-based marketing ecosystem, like everything else in advertising, there will be players and posers. But the true winners will be the agencies that brands can rely on to be the experts in this marketing space like they have been in other ad-tech revolutions like programmatic, native, and RTB. 

Of course, the agency bread-and-butter has never been in the secure storage of first party data, nor should it be. This is not a call to action for agencies to adopt this role. Agencies should not be housing the data. Instead, they should establish themselves as being skilled in using first-party data, understanding the ecosystem, and advising brands on how to use their assets.  When agencies achieve this reputation, people-based marketing will be yet another arena where agency leadership is valued. 

In order to establish themselves within the tight-knit people-based marketing community, agencies should focus on hiring talent conspicuously, providing thought leadership and being available as a resource to whoever needs it. These initiatives will provide agencies with the authority they need in order to compete in the coming marketplace. 

Matt Keiser is Founder and CEO of LiveIntent, a provider of email advertising solutions. 

4 comments about "Will Agencies Be Left Behind In The People-Based Marketing Revolution?".
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  1. Ed Papazian from Media Dynamics Inc, December 18, 2014 at 10:19 a.m.

    Some good points here, Matt. However, I think we should be clear about what ad agency functions we are talking about. If it's coming up with brand positioning strategies and the creative ideas for branding ad campaigns and their execution, then I believe that the agencies will continue to reign supreme, primarily because few advertisers feel competent in this vital area. If we are talking about marketing strategies, including how to define the most likely targets for a brand's ads, sales analysis, future growth forecasts for a product/service category, new product launches, etc. then here, as well, I believe that the agencies will have a role, though this is an area where many clients may also seek "outside " help. If we are talking about media planning and buying, this is probably where the agencies may lag behind and where they are most vulnerable. For the time being, I doubt that many advertisers will desert their agency media conglomerates when it comes to buying national TV. Whether this will also be the case regarding spot TV, radio, print media and online or "digital" media, remains to be seen. If it can be demonstrated that automated systems can really do a better job of targeting and reaching consumers----a big if, at this point-----and the numbers really tell the whole story, then who needs an agency's "expertise" and special relationships with the media? Just program the computers to buy what you need and they can do it. I think that once the agencies see which way the wind is blowing, they will adjust to the situation and catch up fast in the media area. But media is only one function an agency provides. It may be asked whether the totality of functions---account handling, creative and media, is properly integrated and whether this is one of the keys to future agency survival. The honest answer, at present, as in the past, is that despite claims to the contrary, these functions are not fully integrated. Whether this will change is one of the big questions to be answered and here , the ball is clearly in "the client's "court. Full integration means that more people at the agencies start talking to each other and learn skills and disciplines not directly associated with their job descriptions.. That means more person hours and higher fees to the client. I wonder how many penny pinching advertisers will be willing to see their agency fees go up in the name of better integration?

  2. Jonathan Hutter from Northern Light Health, December 18, 2014 at 11:42 a.m.

    Congratulations on renaming the discussion and frame of reference as "people-based-marketing." The truth is, agencies have done this all along, by understanding motivation and having intuition to see beyond what people say, or say they will do, and understand deeper meaning. The same holds true with use of data. Leveraging data and making it a useful tool has indeed changed the game. But if you can't apply this data towards a human interaction, and a business result, as opposed to a series of data and media metrics, you aren't going to succeed in affecting the clients' business. Data nerds (said lovingly, being one) are great. But, if your end report or result is met with the question, "but what does it mean?", you need to go back, meditate, ruminate, intuit, and feel. This isn't always measured with the precision of a kpi, but the results will be more important.

  3. Alvin Silk from Harvard Business School, December 18, 2014 at 1:45 p.m.

    Kindly define "probabilistic data" and "deterministic data." Examples of same would be helpful.

  4. Scott Krauss from LiveIntent, December 18, 2014 at 5:56 p.m.

    Simple definition:
    probabilistic = probably
    deterministic = definitely

    probabilistic = some proprietary combination of variables (MAC address, IP, device type) stitched together to "probably" identify someone

    deterministic = logged in customer data. Customer ID, Email Address, Facebook ID etc...

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