Hopefully by now everyone has read Frenemies by Ken Auletta. The book addresses the epic disruption that all of us in the $2 trillion global advertising and marketing industry are experiencing. The CliffsNotes would say Auletta drives home that technology has changed EVERYTHING.
I would argue the most impactful way technology has changed our industry is that it has forced a level of transparency between client and agency. It has pulled back the curtain. For any agency that does not exercise humanity’s favorite adage, “honesty is the best policy”, the jig is up.
As Gary Vaynerchuk from VaynerMedia at ANA’s Masters of Marketing Conference in 2016 said, “It’s an amazing time to be in the industry if you’re on the offense. It’s the worst time if you’re on the defense, and ninety-five percent of you are on the defense.”
Clients are now a couple of clicks away from learning the realities that used to be easy for agencies to strategically spin in their favor. Who is actually completing the work? What is that person’s level of expertise? What does that cost my agency?
Technology has made clients smarter. For agencies this has translated to smaller commissions and shrinking margin.
So, how do agencies survive this seismic shift?
Agencies that are succeeding in this new economic environment recognize the landscape has changed and are not afraid to do things differently.
As a service provider for agencies, it has been an exciting time to have front row seat. In my experience, the agencies that are still trying to do and be everything are the ones struggling. The agencies that are taking the challenge of this new environment head-on, experimenting with different solutions to keep overhead low while keeping the integrity of their product and investing in their core competencies seem to be on to something powerful.
Time will tell who will leverage this change to their advantage and thrive in this new ecosystem.