Just about every organisation, from the board down, is now talking about the importance of customer experience, breaking down silos and aligning data across the company.
In essence this is to keep up with rising consumer expectations – consumers expect to be treated as individuals, and remembered, before engaging with brands.
This has led to a shift from ‘campaigning’ to ‘always on’ – whether it’s serving customised ads based on real-time analysis of data to targeting audiences across devices.
This trend has changed the scope of many agency’s offering with implications for the kind of skills required, how they structure their capability and remuneration models.
For example, according to Brad Jakeman, president at Pepsico in a recent Ad Age interview – whereas once Pepsi might have produced four TV spots a year, spending $1m over eight months developing a single piece of content: “four pieces has (now) turned into 4,000; eight months has changed to eight days and eight hours; and budgets have not gone up.”
Advertising is no longer the main manifestation of creativity
In the past clients might have had a defined budget and then asked agencies to deliver creative against that budget.
But the increased focus on customer experience has meant that clients are now seeking partners who can build systems that not only provide platforms for customer interaction, but help them integrate with existing technologies.
Agencies are acquiring or developing new skills in data and technology. For example, in early 2015 Publicis Group completed its deal to acquire Sapient.
More recently Rufus Leonard launched engagement tool ‘Embla’ in partnership with Thunderhead to guide contextual, personalised interactions based on emotional insights and real-time behavioural data.
On the plus side, these developments have the potential to take agencies work further upstream with clients.
But some agencies are likely to face an uphill battle convincing clients that their expertise and technology can successfully re-imagine brands.
Another challenge will be to work out how to charge for these services, and then encouraging clients to pay for their recommendations.
This new dynamic is also spurring new ways of working and the term “agency” may even start to seem old fashioned.
Agencies are increasingly seen as partners, with clients expecting involvement in creating and owning the end product.
This has led to a move away from a reliance on ‘the big reveal’ as agencies open up their black boxes to let clients into the creative process.
Growth of content and the launch of Truffle Pig
Content will continue to be a key growth area for agencies – in our Future of Agencies report, one interviewee noted how broad a range of agencies are now saying that they are a “content marketing agency” (whether it’s PR, Media, or digital).
Specialist content agencies have also sprung up, specializing in co-creation, content strategy and even through proprietary workflow tech.
Elsewhere, agency groups are ramping up their content expertise and capability through acquisition.
In September 2015 for example, Snapchat, The Daily Mail and WPP joined together to launch digital agency Truffle Pig, focused on the development of bespoke content that can sit on all types of platforms – not just The Daily Mail and Snapchat.
According to its CEO, Alexander Jutkowitz, Truffle Pig’s vision is to offer clients “access to strategy, production and distribution under a single roof”.
There’s a lot to commend with the Truffle Pig model; agencies are increasingly challenged to keep on top of new platforms and emerging ad platforms, and an agency backed by some of these popular platforms potentially has an advantage.
Whether or not Truffle Pig represents the agency of the future isn’t clear – detractors have noted there’s a potential conflict of interest between distribution and strategy, especially when an agency is owned by a distribution platform.
As a result it will have to prove that it’s a true agency, not just a sales organization for media sellers.
So what could an agency of the future look like?
Agencies are rapidly improving their capabilities in user experience, customer experience and the front end.
But this is a complex environment of technology, and to engage audiences across the customer journey, the right technology partnerships will be a key point of differentiation and competitive advantage – if only to provide flexible, nimble, cost effective client solutions.
Some predict that agencies will have to move to adopt “Uber-style” models to keep up with emerging technologies.
According to Ad Age, this could see the marketing agency “owning the relationship with a client, the strategy and data without owning the execution” and in some respects we’re already seeing Uber-esque approaches with the launch of Truffle Pig.
But while technology will continue to change the client/agency relationship – and with that, business structures and operating models – one area that will remain unchanged will be the role of agencies in persuading consumers to buy products – which means delivering engaging stories along every touchpoint, driven and enabled by data.
Brands need people more than people need brands, and more than ever clients are looking to their agencies to deliver real benefits to consumers in real time.
This is precision work, and the most successful agencies will be the ones that can use data to drive insights that deliver meaningful, discreet experiences that elevate clients to new heights.
This article was originally published in Econsultancy’s Top 100 Digital Agencies 2016 Report.