• by Vernon Vasu , Columnist, June 21, 2016

The advertising industry faces pressure to cut out the middle man, the same way other industries have (banking, transportation, entertainment, etc.) Yet, it seems to be resisting the change: Advertising greats pooh-pooh the impact and importance of data; the process of developing, sourcing, producing and paying for ads has remained the same since the middle of the last century. 

Trouble in Paradise

Cracks have appeared at the edge and center of the agency network. Seismic shifts caused by technologies are real — digital advertising demands creative at a pace that agencies are not designed to work at; advertisers are looking for alternatives. User-generated content delivers similar results to million-dollar production budget ads. Advertisers are re-examining their procurement models and demanding greater measurement and performance-based fees. 

As the best and brightest in the industry gather at Cannes to celebrate the best creative work the world has to offer, this is a good time to re-examine the agency network model. 

It is Broken, But Can It be Fixed?

Agency networks still dominate the industry; large advertisers look to them to help their global marketing plans, they attract and retain large pools of talent and they have the dollars to acquire technologies and other innovations. But, I would argue the slo-mo self-destruct is accelerating. 

Wiser heads from within and outside the industry have noted the same. I agree, the structure is outdated. 

Today, it is possible to brief dispersed teams in real time and for them to collaborate effectively, while based thousands of kilometers apart. An A-Team of creative rock stars from anywhere can be pulled onto any advertiser account to produce Cannes-worthy work. 

Why then, have so many separate corporate structures scattered globally? Can these costs be eliminated, so they are not passed on to advertisers? There is an advantage to having local agency teams to service local clients. But advertisers have already embraced the same collaborative tools and multi-geo way of working. Some agency groups have bravely started the process of restructuring in the face of these pressures to align closer to client needs. 

Both sides have the opportunity to ride this disruption and emerge stronger from it. 

The Future is Here

Imagine a future where an advertiser has a dashboard where she can view past campaigns, read performance reports and insights and also read the profiles of the creative team. 

Briefs are uploaded and reviewed by AI, which suggests talent based on their past performance. The AI can put together data sets and references for the planning team and creative director from global and local sources. 

All meetings are virtual, and the AI checks the creative submissions and makes performance recommendations. Production follows the same process. 

The dashboard is integrated with publishers and media owners and the ad is lived to the approved media plan with a click. Performance is monitored and alerts made when any dips are anticipated. 

Multiple ad variations are used simultaneously and with A/B testing, narrowing down optimal target segments and creative direction. The creative team is alerted and tasked to develop more versions of optimal creatives. The advertiser team monitors a global campaign from a single dashboard that is shared with creative and media teams. 

This isn’t a picture of the future but a net description of various open-sourcing, reporting and collaborative tools available today. The future is here and change is at hand. The question is when advertisers will demand radical changes in engagement and working and if agency networks will lead it or be led by it.