Redefining talent within the advertising agency

The future stars of advertising will be the consultants, craftsmen and traders. In this article I will attempt to profile the agencies of the future and their most important resource; people.

Despite their absolute dependency on their staff, agencies often neglect their people and offer, at best, ad hoc personal development. Regardless of it’s creative nature, the advertising industry avoids change at all costs. So what fun it shall be to study the agency of the future and the recasting of the of the people that define them.

This is the second article in a three part series looking at innovation and the future of the ad agency. In the previous article I introduced new ways of driving innovation inside advertising agencies. With digital underpinning much of todays marketing and communications, the rules have changed and the principles of us-ability, play-ability and talk-ability are at the centre of creating effective customer experiences. With these principles defined, we can now address the issue of talent.

You can download the PDF here.

‘The house of cards’

To sketch the future, we must establish the argument of what brands are looking for in the area of marketing services. With few exceptions, brands are drastically reducing their roster of agency partners in developed markets. Brands are working much harder to engage and converse with consumers across a growing multitude of channels and platforms. So, instinctively they are looking to simplify their vendors in-order to improve the odds of servicing their consumer audience.

Many brands have been encouraged by the economic recession to not only reduce the number of marketing suppliers but to also be aggressive in seeking discounts from the ‘lucky’ remaining agencies.

Gone is the annual fee that delivers 30% profit before tax.

The agency players left at the table face a game where one must deliver 360 integrated work that really works for the brand. So what cards should they play?

‘The missing answer’

It feels like every campaign in 2010 has a Facebook and Twitter component. So you’d be forgiven for thinking that digital agencies are in the driving seat. Wrong! The conundrum for the brand is they seek a truly competent integrated agency that can follow the consumer journey through all media. In many markets consumers are now spending equal time watching TV and using the Internet. So all agencies are being forced to be competent across several media types.

And few can step up to meet the challenge.

Brands can’t rely on the classic advertising agency to deliver digital. On the flip-side, the digital agency is comparatively devoid of the planning prowess and business maturity thus blocking their road to taking in traditional media assignments.

Glue London is one of the rare agencies who have started from being the digital partner to progress in becoming the 360 partner. And Tribal DDB, where I have previously worked, is a digital agency born from a traditional one. These are both exceptions to the rule.

Why so few examples of what is, obviously, the model of the future? Art and science are very hard to mix. Getting classic admen and geeky java developers truly working together under one roof is a major challenge. Grey and tired admen, all to often, cannot bring themselves to respect a world that moves at Internet speed. And the engineer types that you find in a web development agency often lack interest in what the ‘traditional’ or ‘above-the-line’ disciplines. More acutely, finding management leadership that can straddle these two worlds is close to an impossible task in this market.

‘Building a new order’

Traditional linear advertising has always outsourced production. Both advertising and media agencies never had TV directors and special effects studios on staff. These skills were always sourced on a ‘per-project’ basis from external vendors. From this model we saw a well ordered ecosystem of client, agency and production studio.

The Internet changes everything. Without an inherent understanding of how the Internet works you simply cannot exploit it to it’s fullest capacity.

Agencies must be able to stretch their thinking from the new economic dynamics of the open architecture of the Internet to the technical requirements of load balancing and CPU capacity of server farms. And don’t forget the developments in digital TV and outdoor. To command this vast Internet and digital universe we must bring technology inside the agency. Technology must be equally seated next to creative and planning.

The need to understand the complete consumer journey is primary. So clients will not buy the services of agencies on the traditional discipline categories (advertising, PR, DM, digital and media) as this clearly contradicts consumer behaviour. Consumers do not just engage with a brand via its direct mail. So why would a brand buy the services of an agency that cannot execute across the complete consumer journey of a planned campaign?

End to end media experiences centered around the Internet will force a complete re-ordering of the agency world. The winners will be;

Now, before you yell and scream and send me ranting email. I am suggesting these are the winners of the next decade. Sure, there’ll be agencies continuing the old way of working. But for most, if they do not command at least one of the above areas they’ll be faced with a slow and gradual attrition of their client business. And there will also be room for the niche specialist such as high-end research, 3D production and emerging media experts. But the majority of business will fall into the above three categories.

So let’s look at other industries where we can see this pattern in action. Both the movie and the commercial property businesses provide clear examples of the consultant, craftsman and trader model.

Advertising model

The consultant, The craftsman, The trader

Property and housing model

The architect, The Builder, The property investor

Movie business

The movie studio, The Director, The investor

‘The consultants’

The adman has been removed from the clients board room. Indeed, it is a rare situation these days when a client CEO is personally involved in a ad campaign. Comfortably lounged with the C suite is business consultant. Companies like McKinsey and Bain & Company have  been dutifully presenting robust business cases for new products and market place innovation for many years. This is clearly one area where the ad industry needs to return to.

The talent that will drive a more strategic approach to marketing and communications will be the rare type of a ‘integrated planner’ or a ’360 strategist’.

And they will not earn their keep by justifying a predetermined outcome to use broadcast media. Nor, as many digital agencies do, will they randomly present the latest social networking gadget as the answer to a brand problem. Rather they will forge together insight from business, consumer and media channel arenas. Clients will be presented with concisely articulated businesses cases that solve real and present issues for the brand.

These ‘consultants’ could herald from a traditional media or creative backgrounds. In fact, they are more likely to come from more agnostic communications planning or research origins. Most importantly, the practice of holistic strategic brand thinking will be in high demand from brands who recognise their consumer is living in a world of channel overload.

‘The craftsman’

Do not underestimate the power of craft. Or to put it another way – execution. As any successful start up entrepreneur will tell you; ‘it’s all about execution.’

Just look at the film industry. A movie studio places the choice of director and production company in high priority. Think of the of the premium that Ridley Scott and J.J. Abrams command for their craft as a director. James Cameron has used directing to ‘reinvent’ the industry. By inventing a proprietary digital 3-D Fusion Camera System the director has created the highest earning film in history.

In the same way the advertising and marketing world will be seeking the ‘interactive director’. They’ll be seeking the James Cameron’s of marketing.

The individual capable of imagining and delivering brand narrative across multiple channels and leveraging instruments of paid, earned and own media. Primary in their understanding will be the notions of us-ability, play-ability and talk-ability.

These craftsmen will also hail from a world that understands the complex nature of technology. Importantly, attention will be given to vigorous testing and quality assurance. When your new ad campaign is a complex platform that spans many media types in 20 plus markets – there is little room for mistakes. Especially so, when a negative tweet is only seconds away.

Imagine the possibilities when a worldclass integrated thinker teams up with a craftsmen of equal calibre. When a powerful ‘big idea’ is combined with compelling, multi-platform creative work. When an idea is brought to life with a rich set of content and applications. Very exciting.

So now all you need is the person who can monetize this program or campaign. Someone to create the new economic framework that makes all of this work for the brand.

‘The trader’

The media buyer is dead. And to make matters worse, their survival plan is the tall order to re-invent themselves as the Goldman Sachs of media. Media agencies must become the marketing equivalent to an investment bank or hedge fund. Look at IPG’s Cadreon as an early example of this approach.

This media trader will perform three things across all paid, earned and own media. Earned and own media being rather tricky as this is not the traditional hunting ground of today’s media agencies. The three parts to media trading;

1. Data: matching user profiling and market data related to brand/product

2. Aggregation: all ad (both digital and non-digital) unit exchanges and marketplaces in one place – creating transparency

3. Platforms: a simple interface towards the client to execute orders

The media trader will need to be so good at delivering a ROI to the brand that they can afford to risk their own money in the media buy.

In the main they should be working on a mixed revenue model based on performance and commission. The talent needed will be a heady mix of mathematicians that can optimise proprietary algorithms and Wall Street types who can create trade dynamics and deals. Critically a rare find of a comprehensible digital analytics expert will be in the driving seat. An individual who can interpret interaction data and provide the brand will clear instruction on improving their financial returns.

Traditional agencies may feel some discomfort. They may be looking at their annual fee revenue and commissions decreasing in both volume and margin. So what type of agencies are in for trying times;

• ‘Too many suits’ agency; the account manager is a endangered species. They will have no role in the ‘consultant’ and ‘trader’ space because the principle thinkers will do much of the engagement directly with clients. Equally, the producers at the ‘craft’ agencies will absorb much of the client facing duties. So if your agency has more than 10% of staff in account management you can expect clients to be questioning your value.
• ‘Middle of the road’ agency; if an agency cannot claim to be great at either consulting, crafting or media trading then its relevance will be doubtful. The agencies on the watch list are the generic mid-to-large global networks. Too expensive and bloated for an agile craftsman-like play and not smart enough to be a creative agency. Additionally, the bland digital agency with several offices and no defining traits are doomed. So if you haven’t won a significant effectiveness or creative award in the last years – start to worry. They’ve done well in times of low supply and high demand. But as agencies like JWT install digital leadership at traditional shops, the prosperous days of the generic digital agency are limited.
• ‘Run of station’ media agency; many media agencies may finds themselves with inadequate strategic prowess and not enough buying power. Just plain old bookkeepers. Without a fallback of either innovation or purchase power the situation could be dire indeed.

The power of three

But there is no need for this to be all doom and gloom. Agencies can do some simple things to get things moving. Firstly, red flag any work that does not match up against the principles of us-ability, play-ability and talk-ability. Secondly, get technology into the agency through promoting young progressive thinkers in the agency or recruit them in. Thirdly, agencies can embrace real talent development by implementing a personal development program that is focused on cross pollination of skills and rewarding innovation.

For the leadership of the agency they must ask themselves;

‘What can we be the best at?’ Are we more like consultants, craftsmen or traders? A frank analysis of the facts is the start to a long road of change.

But it’s really worth it. The power of doing one of these three practices well is compelling. If you can really crack the brand problem with your strategic minds then you’ll be creating real value. Likewise, if your creative craft can deliver truly exceptional narrative across all media – you’ll be indispensable. And if you’re able to frame marketing in a compelling ROI – you’ll also have a seat at the table.

The biggest winners of all will be the very rare teams that are capable of being world class at two or all three of these practices. Those will be world class agencies that, under one roof, can deliver an integrated idea, executed across all media and deliver knockout media ROI. A great challenge indeed.

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