It is tough times out there in agency-ville; Publicis awards-ageddon, news of Dentsu-Aegis Q2 profits sliding by 2.7%, (significantly down on the 7.2% reported for the same period last year and 10.2% in Q2 2015), warnings from another CEO of a “slowdown” in digital advertising. The rough weather doesn’t look to be calming anytime soon either if the new study from independent media consultancy Media Sense is anything to go by. The report raises some concerns for agency heads and brand CMO’s as they prepare for the future against a backdrop of profound and sustained shifts – here are the highlights – and how to counteract the effects:
1. Brands are taking more control – customer data is empowering marketing to drive growth: Marketing is now considered as a driver of business growth, not an expense for some brands. The study reveals marketers with strong data assets are more positive about their ability to contribute to business success. Traditional media planning and buying skills are becoming less important for brands as they become more capable fuelled by ownership of actionable data.
COUNTERACT BY? Using the data you have to become better partners that are equally, if not more, obsessed with good attribution.
2. Brands are building marketing teams around their data capability and seeing the benefits: The overwhelming majority of respondents, – a massive 78% – confirm that data analytics and data insight is the critical media capability. Brands are taking control, recognising that they need to build distinct skillsets within their organisations and continue to bring more specialists into their business, particularly those with data science skills.
COUNTERACT BY? Training, partnering and creating half-way houses. Not everyone will be able to afford this – is there a new model?
3. Brands and agencies are experimenting with more agile operational models: To meet the needs of a more data-driven, customer centric marketing model, all those interviewed recognise that a more “agile” internal and external operating model is now required.
A more dynamic creative and media operating model is emerging out of the imperative to be more agile, but over 80% think significant organisational change is still required to deliver it.
COUNTERACT BY? Owning the organisational change – a little like Publicis is doing – big changes are needed – it will be uncomfortable – get through it quickly and efficiently.
4. Media Agencies continue to extend their remit, but there is an elephant in the room: Media Agencies continue to acquire more technical tasks but will need to work hard to stay up-stream. Brands are seeking simplicity and control, and are experimenting with on-site and in-house agencies to achieve this. The threat comes from the big Management Consultancy firms, capable not just of solving marketing, but also addressing entire business challenges.
COUNTERACT BY? Yeah…about that…all I can say is think big, promote and stay agile.
5. We have reached peak media complexity: As brands come to terms with the realisation that many of their investments into digital media have been squandered and that digital technology has not yet returned the results or behavioural change they had hoped, there appears to be a re-discovery of the importance of brand building with paid media to retain and anchor customers.
COUNTERACT BY? Owning this area fast. Buy in the talent, use the data you have and ask real people what they expect…now go beyond those expectations.
The fanfare of expectation created by automation, dynamic content and social platforms has – at least for now – somewhat subsided. However, as the landscape settles expect further evidence of the slowdown – and consolidation – in digital. Those agencies that cling to change instead of trying to change it will continue to see success. Ignoring the ‘jazz hands’ stuff and getting your hands dirty will see results that matter. Good luck.