The Evolution of the Advertising Agency

What clients want from an ad agency (a vendor of services) is often not what they really need (a provider of ideas). Most agencies however fall somewhere in the middle which in today’s business environment is a gray place to be, states Tim Williams of the Ignition Consulting Group. The traditional advertising agency faces competition on all fronts as once loyal advertisers are dissolving their longstanding relationships in favor of branding, media and CRM specialists to try and increase the effectiveness of their marketing dollars. On one side are the marketing and brand consultancies and research firms—all claiming to provide the strategic planning offered by agencies while on the other end is the media firms and production houses which are now getting into the business of concept development. But, instead of blazing a trail and leading the charge on this new initiative from their advertisers many agencies are on the trailing edge, even lagging behind conservative industries such as banks and even hospitals.

It is no wonder that fewer and fewer clients think they are in need of a traditional advertising agency.

Business Models Change
As business leaders do their best to avoid the idea that their business model may be changing it is an incontrovertible truth that over time business strategies converge, companies adopt similar practices and begin to look and act the same. Williams believes the model of the traditional advertising agency is over 100 years old and has outlived its usefulness. No matter the “spin” agencies put on it “We’re just going through a rough spot right now,” or “Things will improve as soon as the economy picks up,” or “If only we were in a different part of the country” does little to change the reality that the traditional agency business model doesn’t work the way it used to.

A Marketing Transformation
Traditional agencies operate in the area of “soft” marketing—activities that revolve around brand awareness and preference, hard marketing– pricing, distribution, sales and even the product itself has always been the client’s domain. However there’s a third domain, a link between soft and hard marketing, the domain of evaluating and improving the consumer’s experience with the brand. Everybody talks about it, but few actually do it. Agencies are focused on the traditional manifestations of the external brand and clients are focused on the basic aspects of the internal brand. The role of the agency of the future is much broader and more valuable– to move from creating and placing marketing messages to helping clients evaluate and strengthen the relationship that their customers have with the brand at all points of contact. Instead of making brand promises that companies can’t keep the agency’s role should be to create a positive and authentic brand experience for the consumer.

Connecting to the Brand
To transform the way they do business agencies need to pay more attention to connection planning—helping clients understand how consumers “consume” information and media about the brand. Instead of developing “media plans,” agencies need to develop “brand exposure plans.” Instead of media planners, they need “brand contact planners.” In the agency of the future, media is no longer a stepchild of creative but a part of the creative function.

Moving Forward
Ralph Waldo Emerson once observed, “There are always two parties—the party of the past and the party of the future; the establishment and the movement.” Rather than being the establishment agencies have an opportunity to become a movement and adopt new methods of approaching client business. Brand Management consultancies are able to deliver only on the “thinking” side of the equation. The agencies of the future will provide both “thinking” and “doing” and help clients achieve the continuity that is so important in building a successful brand.

Unlike the railroad executives of the 1920s that couldn’t envision a world in which airplanes moved the public across the country and across the world. The business model for advertising agencies is ready for transformation, and needs forward-thinking agency leaders to help create it.