Ever the overachiever, Adweek reported yesterday that Sir Martin Sorrell is eyeing a comeback. In roughly the same amount of time it takes to set up a service call with your cable operator, Sir Martin has seemingly been able to extricate himself from the old agency model with sufficient distance to be able to proclaim that he “can see much more clearly” where the traditional advertising model’s strengths and weaknesses lie. His new agency, presumably, will focus on the former and eliminate the latter. I couldn’t help but chuckle as I read this, and all I could think of was the famous horror scene from When a Stranger Calls where the protagonist is alerted that the results of the trace are in, and “the call is coming from inside your house.” Queue the terrifying music. All due respect to Sir Martin, but his £70 million salary and everything that it represents IS the weakness.
At VidMob, we’ve had a front-row seat to the struggle between the old agency model and the new agency model that is rapidly emerging in its place. And make no mistake about it, struggle is the operative word. The old model was great for certain audiences (Sir Martin) and not so great for other audiences (everyone else—clients and employees alike). But when the people in charge are vested in the current system, innovation is hard to come by.
So we knuckled down and started building a path to a new model, one that we believed would be better for all involved. We believed, and still believe to this day, that VidMob can be a powerful platform for agencies to more efficiently produce certain pieces of marketing content for their clients. We are not a good fit to make Super Bowl ads, but as companies shift from needing a few pieces of video per year to now needing many thousands of pieces, VidMob is a good fit for a surprisingly large percentage of that new content need. And since we tend to do it for a fraction of the cost, and in a fraction of the time, we figured that if we could just explain how it works to potential agency partners, they would adopt VidMob as one of the tools in their arsenal to help deliver better services to their clients. When we heard that many digital campaigns were severely limited by the paucity of assets created specifically for digital channels, and how much agencies struggled in creating the wide array of custom formats needed to get the most out of these powerful (and increasingly important) channels, that only served to further our optimism about the fit. After all, more efficient production means more content, more agency ideas coming to life, better campaign performance and an overall better return on client’s marketing investment. It’s a win-win-win. What could stand in the way?
It turns out the answer is ‘a lot.’ The most common response we heard from the old agency set was that their production groups really liked using their traditional methods because they got really nice lunches on post-production days and it meant being out of the office all day—sort of like a vacation.
The first time I heard this I couldn’t believe the person who said it still had a job. The 30th time I heard it, I couldn’t believe the industry still existed.
Needless to say, this type of client-last thinking has strained the relationships between a lot of top brands and their old agencies. It seems like the wave of brands cutting, or severely limiting the scope of their relationship with their old agencies is growing by the day. Just in the last few weeks, we’ve seen announcements like this one from Chobani, from a host of other companies including, P&G, Unilever, Pepsi, ABI, Diageo, L’Oreal, Wayfair, Allstate, StubHub, Sprint, Booking.com, Starbucks, and BMW.
They say that necessity is the mother of all invention, and as the wave of brand in-housing of creative grows, we’ve seen an acceleration in the development of new agency models. I’ll have more to say about this in the coming weeks, specifically as it relates to how VidMob can function as a sort of operating system for this new client-first agency model, but suffice it to say that the new system reverses the priorities.
The companies that will be relevant and thrive in the new agency world will be those that are quickest to come to terms with and address these 4 realities.
1. Production — Agencies are not and cannot be scaled for production in today’s multi-platform, always-on, always-innovating mobile social ecosystem. The “produce only the great TV commercial model” doesn’t scale in a mobile social-ecosystem that requires multiple adaptations on a theme, and when the cultural moments that brands must respond to pass in days or hours, not weeks or months. Adapting to the new production reality means finding creative ways to expand the supply chain.
2. Platforms — For most emerging consumer groups, not only is TV watching down, but their gateway to mobile or digital is through apps, like Facebook, Snapchat, or Instagram not a browser on the web. New agencies will re-think their over-reliance on cheap, easy programmatic advertising and convenient display ads and move to and understand the platforms and formats their audiences engage with.
3. Performance — Loose proxies for performance, like a gut reaction or reach and frequency, no longer suffice. Today’s CMOs are data-focused both pre- and post- production. Relevant and successful agencies will be those that integrate rigorous multivariate (not just A/B) testing and an unwavering focus on actionable insights, driven by deep learning.
4. People — Consumers are (geographically) everywhere, as are brands. The old agency model placed a premium on geographic location—to participate in the old agency creative process, being geographically located in New York, Chicago, or LA was a prerequisite. New agencies will leverage networks of creative which lets the best idea and execution/ not just the best location/ win.
The mythic marble offices in the Madison Avenue skyscraper may be depowered in the new agency model, as well as a thousand other extravagances—including those special sushi lunches at the production offices. It won’t be great for those things and it won’t be great for a handful of people—their £70 million salaries probably won’t be part of the new agency model.
But it will be great for all of the other employees, and most of all, it will be great for marketers.