The Evolution of Agencies not borne of the digital era


Last year I wrote about whether the UK can be the next digital production hub, which led onto the piece ‘what are digital agencies doing to ensure that they are not becoming the next dinosaurs‘, so I thought it would be interesting to see what those agencies not born of the digital or social era (previously know as ‘traditional’) are doing?

Well on the surface very well. If you look at last year’s Cannes Cyberlions, the top three ‘interactive agencies’ were CP+B, BBH New York and W&K Portland. AMV BBDO has won Creativeshowcase 3 times in the last 18 months (although they were usurped by AKQA and Tribal DDB who have both won it 4 times in that same period) and the most interesting digital piece of the last 12 months for me has come out of W&K Portland (Old Spice Responses).

However if you dig deep into these agencies (CP+B probably excluded), I am sure they would be the first to admit that the digital/social thinking does not pervade the whole agency. And looking at the wider industry, the situation is far worse. There are still too many people hanging on to the tv centric world of storytelling and not yet got their heads round this connected social world and move towards story building and engagement. Thom Gruhler, President at McCann Erickson NY said “Its changing more each year as the new talent that comes into our business brings with them native skills that push us forward, but by-in-large there is still a gap in the leadership at most traditional agencies. Lasting change requires top-level commitment and a significant cultural shifts within organizations. Successful change is hard work, takes investment, and creates vulnerability; not all traditional agency leaders are willing or able to take that on.”

However many of the agencies (especially in the US) have recognised this and are making significant investments to address this issue. And one of the organisations that is busy trying to help accelerate change is Hyper Island, the leading digital school from Sweden, which now has offices in London and New York and is running Hyper Island Masterclasses (HIMC), which are more focused on change management rather than digital, for some of the biggest agencies in the world. Thom Gruhler, who himself is a HIMC student, commented “”Hyper island is an important resource for us. Its a sharpening of the saw and can often lead to important definition of where our focus should be with our team and our clients. Lets face it, getting great work made is much harder than having a great idea and requires that we continuously push ourselves beyond our comfort, that we be more focused on what’s possible than what’s proven and that we think more about experiences than executions

James Connolly, another HIMC student said “The biggest surprise for me [on attending the course] was just how fearful the average account exec is of digital media and social media in particular – there seems to be an underlying idea that they have to “know it all and be on top of it all” every waking moment. My Eureka came when I saw VPs declaring that it’s better to ship a product that works today than to wait for perfection tomorrow.”

I have the pleasure of being a Hyper Island Masterclass speaker and one of the key things I say to ‘students’ is that they need to spend some time re-wiring their brains. Digital and social is leading to real changes in behaviour – until you truly understand how behaviour changing, it is very hard to expect to come a up with ideas which truly connect. I remember being at a panel (which included senior executives from Hulu.com and the iplayer) a few years ago and being shocked at the widely held view that the IPTV industry had been innovative as they were now doing 15 second spots (rather than 30 secs). When I suggested that they should be looking at creating interactive advertising which allows you to click on products within the content and then browse and even shop as you are watching the show, I was told ‘you can’t do that, it will break up the content’. From my perspective, I wondered whether these business leaders were really in touch with how people were actually now behaving in this digital world. And to a certain extent this sums up why the advertising industry was so slow to adapt, it spent so long worrying about people were feeling, they lost sight of what they were actually doing.

Obviously the other way that agencies are adapting to change is by hiring key talent. While Creative Social was founded by people working in digital agencies, mostly independent ones, many of those Socials have naturally found themselves in the larger, more traditional agencies. Lars Bastholm is one of those and certainly made a splash when he was promoted to Chief Creative Officer at Ogilvy (Is Putting Digital Experts in the Top Creative Spot the Right Thing?). When I asked Lars what changes he was seeing he said:

‘Too numerous to list. Often I think the biggest challenge is clients who compartmentalize their budgets and are signed up with different agencies for different part of their marketing pie. I think creatives worth their salt under a certain age do not think in silos or discreet executions, but in programs. Not being allowed to do that because of archaic set-ups can be incredibly frustrating.’

However there are some fundamentals that go to the heart of an agency model and the challenge for ad agencies is to work out how they actually change culture and a deep rooted way of working which was founded in the 60s. Digital agencies are used to the speed of change that is currently occurring and we consequently built agile businesses (although even we found this challenging as we grew and implemented increased process). As Lars puts it “There are constantly new approaches, tools, and technologies coming to market. So you’re never done sorting this out. You’re in constant beta-mode. This was never the case with advertising agencies, and many who are not from the digital world have a hard time living with change and uncertainty as a constant

Louis-Hugo Marchand of Draftfcb Montreal, another HIMC student, concurred : “I believe the biggest challenge for ad agencies [not borne of the digital era] in the next couple of years is going to be them getting comfortable and getting their clients comfortable with the idea of ‘perpetual beta'”

Another thing that is clear, is that while digital agencies are used to making stuff, ad agencies are simply not used to it – they have got to used to writing scripts that are then made by a production company. Lars concurs “Digital agencies are rooted in the world of rapid proto-typing and creation, while ad agencies have historically outsourced anything that would get their hands dirty. That is not, IMHO, a sustainable model moving forward.”

Finally the other things tha comes through quite clearly is the barriers that egos continue to have to leading to true collaboration which I believe is at the heart of succeeding in this new landscape. One of the HIMC attendees told me that his biggest challenge was implementing the concept that creativity belongs to everyone in the agency – “Getting the creatives to relinquish ‘some of the control’ and work with those “who don’t wear black” is an ongoing uphill struggle against egos.

So what does this all mean for the industry? Well from my perspective it must mean deep rooted change. I still find it incredible that the industry is still rooted in an idea (ie art director/copywriter teams) that was developed in the late 1950s. Given the speed of change around us, this just seems odd. However with change comes excitement and new possibilities. And it is certainly true that those agencies not borne of the digital era still hold the advantages of client relationships although these will only hold out so long (as we have seen with the likes of Anomaly picking up business from Fallon).

However one Social who is confident the agencies not borne of the digital era will succeed is James Cooper. And having worked at a pure digital shop, Dare, a new model boutique (Anomaly) and now a big network, JWT, he certainly seems well placed to see some similarities and differences. James commented “I went to the best of the decade one show event a few months ago. Crispin won for subservient chicken, which I don’t agree with at all [See his reasons here], but what struck me was two things. First up Crispin invited Barbarian up on stage to accept the award with them. They are generous partners. Being a good partner doesn’t change by size – it’s an attitude. No mention of Big Spaceship when BBDO accepted their award for Voyeur. Crispin also admitted that when Subservient Chicken was made – late 2004 – they had absolutely no idea how to make what was actually a very simple site. And yet 3 years later they were digital agency of the year in Cannes. What this says to me is that actually despite all the naysayers anyone can change – and actually incredibly quickly. Obviously the bigger the agency the longer it will take but so long as you have key people at the top who want to change – really want to change – not just because they think that’s the right thing to do – then change will happen. JWT is the oldest agency in history. But with that actually comes a prolonged history of innovation. No company stays in business without it. They have ridden the waves, multiple waves, not just the digital wave that we happen to all be obsessed with right now.

Irrespective it is an exciting time to be in the industry and it will be fascinating to watch to see how it develops.

Up next:
We will look at the rise of the social media agencies and how these will affect the overall landscape. If you are a social media agency and would like to be included, please e-mail me.

Other related articles:
Mayhem on Madison Avenue by Danielle Sacks, Fastcompany
Mind Lessons from the World of Mad Men by Sarah Hartley, Guardian

4 Comments

  1. Chris Ongarello says:

    Really great post here Daniele.
    Everyone in a so called traditional thinking agency needs to understand that being uncomfortable is a good thing. It will definitely be an interesting next few years.
    Lets hope we can all share, learn and grow together in the new agency world.

  2. Wow. Great post! I enjoyed reading it and see a lot of truths here. There are aspects of being in “perpetual beta” that can bring clients real benefit and agencies that can articulate that well will find themselves to be pretty busy.

  3. Just a few observations from someone who’s been consulting with marketing firms – many of them the old school traditional type – for over 20 years.

    The traditional agency must be prepared to rethink its entire model… implement creative new approaches to reach and communicate with clients AND consumers.

    The number of messages in the marketplace keeps rising exponentially, and as a result perceived value of each single message will continue to diminish over time. New technologies have not only reduced the value of each message, but also provided each consumer with greater control over the messages they receive. This growing consumer power will completely transform the marketing communications industry – both clients and marketing firms alike. Consumers can now dictate when, how and where they will listen to marketing messages. The net effect of this empowerment on the industry is substantial:
    1) The proliferation of mass media goes away to alternative media outlets and vehicles, absorbing greater proportions of client marketing budgets
    2) Agencies who continue to focus on traditional mass media are threatened with extinction because they will be able to add little value to the planning, buying and execution process
    3) Agencies need to figure out their role in helping clients build relationships with end customers
    4) Agency professionals need far greater access to information on their target audience and must know how to use it effectively – speed wins
    5) Traditional compensation and commission schemes will continue to evaporate in favor of project, performance or consultative-based value creation

    This have been known and accepted for a long time in the halls of most marketing firms… I wrote the above in 1996 for one of the large holding companies.

    The real question is why haven’t they changed?

    And the short answer is the clients haven’t changed. Or I should say, when enough clients transform their marketing departments more traditional agencies will change…

    Or fade away.

    Bob Sanders
    Sanders Consulting Group
    Blog: http://sandersconsulting.com/newbusinesshawk/
    Twitter: http://twitter.com/newbusinesshawk

  4. Allison says:

    When will agencies take ownership of their own internal education needs? I am a fan of Hyper Island, but are they the only example that anyone can use at this point? We’ve been talking about lack of digital education inside the agency for years – it’s time we own on our own programs, teaching, knowledge sharing, and classes. It’s amazing that most articles I read continue to reference HI as an answer. Where are the other examples? There are some, one just has to look a bit.