Economics, Technology

Is the Ad Agency of the Future the Ad Agency of the Past?

With M&A activity in Greater Adland surely at its peak, beckoning ever stranger bedfellows, and Capitalism seemingly falling out of fashion with Purpose set to become the fifth P, what future for the agency structure of the future? 
Here the ‘For’ side argues Past Is Prologue, while ‘Against’ suggests the promise of digital will (eventually) turn out to be more than a sweet nothing whispered in the heat of client courtship—but a certainty dire and discomfiting.  

Yes. Past is Prologue, After all!

Few industries have been more impacted by the post-2008 economic crash realities than Advertising. Caught in the tsunami of technological change and struggling for financial survival, many agencies have rushed to implement Charles Handy’s ‘doughnut model’ of organisation, wherein a smaller core of permanently employed staffers are surrounded by an army of freelancers summoned as and when required, like dockers in Plunkett’s Strumpet City.  It is not surprising that the chaos that has ensued since Google and Facebook first fundamentally disrupted the media landscape 10 years ago, has caused many to question the viability of the advertising agency model.

Prior to the arrival of Google and Facebook, advertising agencies engaged in some decades of masochistic, organisational disembowelling.  In the 1960s and ’70s, full service advertising agencies routinely delivered the full range of Marketing Services, on one invoice, under one roof. Check the in-house content production teams, media department, researchers, promotional staff and PR specialists of Mad Men if you don’t believe me.  In London, BMP, JWT, AMV and others epitomised this full-service concept; in Dublin, McConnells, Irish International and Wilson Hartnell were great, truly full-service agencies when no-one had ever questioned the term (at least while awake).

Then came the era of the bean counter, characterised by financial engineering, the relentless concentration of the Advertising industry into fewer agencies and a focus on core functions (account handling, creative services and production management) at the expense of value-added services such as Strategy, Design, Promotions and, most crucially, Media.  The idea of de-coupling the process of placement of advertising from the process of its creation was and is one of the most crass and stupid of all time.  How amusing it is, then, to see the cycle turn and things return to a form and order not seen since the 1980s. 

Now, the bigger Media Agencies are moving assertively into Creative Services and Production—under cover of digital.  Core Media in particular looks more and more like a 21st Century McConnells (assuming they can get the creative part of the equation right).  Medium-size creative agencies like Havas are trying bravely to re-integrate many parts of their service offering.  And, at the top end of the ‘Creative Agency’ market, Dublin’s Rothco and London’s Karmarama have integrated with Accenture, while other Management Consultancies are rumoured to be planning similar moves.  Ogilvy and Omnicom have centralised staff from all their agencies into a single, large office buildings in London.  I wonder why?

In the words of Hamlet, “This is hire and salary, not revenge.”  Having left the door wide open by over-concentration on the core matter of advertising creation and production management, the big agencies now find themselves eaten from both ends: by the ungrateful media behemoths that they spawned, and by the Management Consultancies to whom they abandoned the strategic field.  What will emerge from this ‘primordial slime’ is, wait for it, nothing other than the full-service agency of yore!

This is where the rules of human behaviour trump (ouch) the whims of financial engineering.  People like working with other people.  Wicked problems are not quite so wicked when tackled together.  There’s a reason why creative teams work best, why account groups are more efficient, why ‘inter-agency teams’ are all the rage.

Quite simply, what the bean counters overlooked in their search for ‘optimisation’, ‘scale’ and ‘efficiencies’ is that creative industries do not work like assembly plants.  When the subject matter is human behaviour, and when the objective is to change that behaviour, people work best beside other people, collaboratively in inter-disciplinary teams.  The full-service ad agency gathers people with complementary skills together in pursuit of a common objective. Its output is most efficient and most enjoyable to produce—and it also produces the best results.  That’s why the advertising agency of the past is the organisational form of the future. Hah!

EC

No. The Agency of the Future is a Party of One

Upton Sinclair famously observed, “It is difficult to get a man to understand something when his salary depends on him not understanding it,” suggesting the work of prognostication is best left to the unsalaried, or the unhinged. 

Indeed, history has not been kind to canaries or Cassandras, whose warnings dire and discomfiting prophecies disturb the sleepy rhythms of the status quo and threaten the bliss of ignorance. 

So then, let us begin!  Lo, what will the Advertising Agency of 2030 look like? 

In strange days like these one might think the survival of the Ad Agency As We Knew It depends on whether the narrative of neoliberalism prevails, or—by soft coup or revolution—something a kin to fully automated luxury communism takes its place.  Which is to ask whether there will be a need for Advertising Agencies at all?

Not as we know them, and no matter—whichever wing of the haunted house of humanity we end up in, Left or Right, the operating system of the future will inevitably be characterised by hyper-efficient resource management, enabled by data and optimised for full spectrum technological dominance.  None of which, the agencies of the present have been designed for.

But the more some things change, the more others will stay the same.  As of July 2019 it seems unlikely the next decade will see any great levelling in the allocation of power.  Like the poor, billionaires will still be with us—as evidenced by the Larry Finks, Jamie Dimons and Ray Dalios of this world, who ably pirouette through the pitchforks by adopting new narratives in stark contrast to the one wot made them so filthy rich.  

The good news then is that there will still be a market for ideas, and the need to market—if not products and services, then agendas and ideologies.  

Those with wealth (money or power—the means of policy, production, distribution or aggregation) will still contract those in need (of money, influence or community) to grow awareness, shore up affinity, or shift units of whatever they’re selling.  But in a hyper-efficient, data-driven system, what will differ is how those aims are achieved, and by whom.

The inefficiencies of the multi-disciplinary Advertising Agency of the 20th and early 21st Centuries first came under fire by client-side cost controllers.  Hacking away at the Fat Ducks and frequent flights that once characterised big budget commercial productions was easy at first.   After 2008 it became even easier.  Agencies themselves took up the sword.   And when the full-Shaolin, complete with lotteries for the elderly (ahem, over 40s) wasn’t enough to secure the margins, Agencies introduced delayed reimbursements for expenses and timesheet lockouts, minimum follower count requirements for new hires, and the nasty habit of asking production artists to work for ‘exposure’.  With the quality of the work, the morale of remaining staff and clients’ trust in free fall, stock prices followed, as evidenced by WPP losing 60% of its value between 2017 and 2018.

In a system optimised for maximum efficiency and resource management, the Agency of the Future, will be an Agency of One: A bean-counting, rent-seeking, media-buying, flesh-peddling, Palantir-gazing, algorithm-humping, fat controller.  Let’s call them Abacus. 

Freed from the tyrannical binary of 1s and 0s the lone wizard and her quantum computer will not only be capable of targeting individual humans at their most cash-partingly vulnerable moments, but of eliminating the need for cultural relevancy and the involvement of fallible humans running messy wetware. 

TV

6 thoughts on “Is the Ad Agency of the Future the Ad Agency of the Past?”

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