It seems fitting in the week when the ad community has decamped to Cannes, an event which seems increasingly dominated by the ad technology players, to write about agencies and technology. This is also the week of-course in which Publicis Groupe have announced that rather than spend money on flashy awards and events, they are investing in creating an internally-focused, AI-based 'professional assistant platform' to connect their 80,000 employees. It's laudable to want to empower different ways of working and to bring dispersed disciplines and resources together in new ways, but the cynic in me worries that this just another example of an overly enthusiastic focus on shiny/proprietary technology at the expense of focusing on the people stuff that really drives change – behaviours, culture, the very fabric of the way in which you work (this has been a key theme in the digital transformation work I've done with clients over the past years). I'm sure we'll see.
Anyhow, there was some really interesting feedback around this theme that came out of the interviews I did for the IPA Future of Agencies report which came out recently. The overarching metaphor/model I used for the report was Charles Leadbetter's Systems and Empathy matrix, which captured neatly the dichotomous nature of the dynamics in the market right now and the spectrum of capability along which agencies are positioned, from the systems end (characterised by data/technology/operational and business models and efficiences) all the way through to the high empathy end (founded in human insight, creativity). So it is with agencies. Large, traditional consultancies schooled in business and strategic consulting, organisation and operating model design, moving to expand design and creative capability to create more of a 'full stack' approach. More creatively and digitally led agencies broadening out from marcomms and front end into consulting, technology and digital transformation. A disparate set of consultancies and agencies converging on that top right quadrant.
One of the key challenges in this shifting dynamic (particularly for the creatively-led end of this spectrum) is to understand the new context that technology creates for marketing and advertising. Whilst some agencies seem determined to ignore it, the reality is that this context is changing dramatically. And I'm not just talking about the growth in ad tech. Each year (friend of ODF) Scott Brinker does a heroic job of tracking and mapping the burgeoning marketing technology landscape. In fact 'burgeoning' is something of an understatement. Back in 2011 when he first started mapping the market he was already tracking 150 vendors. That number has roughly doubled each year since then so that in the latest survey which has just been released we now have over 5,000 different marketing technology solutions across a huge variety of competencies. Solutions that are increasingly platformised, enabling marketing teams to plug together a variety of different specialised and vertical solutions to create their own 'marketing stack'. It's a huge degree of complexity that is fundamentally changing the discipline, function and operations of marketing.
More than one interviewee for the IPA research noted that agencies simply do not have enough understanding about this technological shift (and that clients themselves are struggling with this level of complexity). This is a challenge for agencies, but it's also an opportunity. It may not be necessary for many agencies to understand the operational intricacies of specific technologies (unless of-course that is a key part of their proposition), but there is an imperative on every agency to appreciate the technological context within which they are operating. Work and ideas that make sense in the context of the client organisational focus on all aspects of customer experience, a broader set of customer touchpoints, more diverse brand content delivery, and growing marketing automation and technology-driven execution are critical.
With so many martech vendors convergence is an inevitability but there is an opportunity for agencies to make sense of new waves of technologies for clients and to distil and enable the realisation of the value that they present. In the report I focused this into three key areas:
- Potential:- the ability of agencies to enable clients to better understand the potential of specific technologies and trends to enable better prioritisation of client attention and investment and properly assess strategies and focus
- Integration:- to understand how different combinations of technologies might be brought together for beneficial effect (and be larger than the sum of the parts)
- Application:- to appreciate and advise how technologies might be applied for business benefit
As successive waves of new technology (AI, VR/AR, IoT) take hold, this role as ‘sense-maker’ for clients creates further opportunity in the operationalising and optimisation of new technologies and capability. There were a number of agencies I spoke to, for example, that were doing some really interesting work around creating the equity/practices/processes designed to help a client operationalise and scale a new capability around the globe.
There is enormous value to be had in being the trusted adviser and enabler. But without an understanding of the broader context in which advertising and marketing now operates, agencies will really struggle to play that role.
You can download a copy of the full IPA Future of Agencies report here.
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