I don’t think anyone questions that his prophecy is already playing out in an extraordinary way in the media, marketing and advertising industries.
Just this decade, we’ve seen software-born digitization, automation, aggregation and analytics displace tens of billions of dollars of market capitalization and many tens of thousands of jobs across media, marketing and advertising companies. I believe this disruption is just beginning, and the agency businesses in our industry will be hit even harder going forward.
Yes, software is going to eat (destroy) a lot of ad and media agency businesses over the next few years. However, I don’t believe that software will eat advertisers’ need for agencies or their services. As the world of advertising and media becomes more automated and real-time, the need for agencies will only increase.
What will change, though, will be the products, services, organization and business models of the agencies that survive and thrive in a software-driven world. Here's why I believe this:
Advertisers need agents. The world of advertising is a very specialized, unique and nuanced market unfamiliar to most companies that make and sell things. Many will always need and want someone to act on their behalf in that world. And, rather than expecting neutrality, advertisers will value expertise and true agency -- companies that act on their behalf, not primarily for their own benefit. Trust will always be imperative here.
Advertisers need market intelligence and insights. The world of advertising and media is a jungle; a dark coal mine with many shafts; outer space with no gravity. In those scenarios,
advertisers will always need real, practical and highly informed market intelligence and insights from folks who know it better than they ever can.
Advertisers need strategy. For advertisers, knowing how to run their
own business does not mean they know the best steps to take in their advertising. This starts with market knowledge and insights -- but driving desired business outcomes and growth predictably and
profitably with advertising requires well-informed strategy.
Advertisers need excellent execution.
Software enables advertising to be delivered at a scale and complexity that was never before possible. But, operating across so many different and disparate
touchpoints in real time require abilities in analysis, orchestration and optimization only achievable by entities expert in making the markets work for their clients -- and, like the machine
learning systems they use, get smarter and smarter the more and the longer they do this.
Many agencies will go away because of software, but the need for agencies won’t go away.
What do you think?