Back to the future

In his second article on the future of marketing and agencies, Chris Ingram examines the potential effect of social media and the evolving digital landscape

Predicting the future of marcoms is particularly difficult: it’s not just the speed of change, but the fact that big agency groups control such a large proportion of the business they have a potentially distorting effect on what might “naturally” happen. But let’s put that to one side for now and look at some of today’s big themes and how they could affect the market.

First, blogging, texting and social networking sites are modern word-of-mouth communication. Is this the golden opportunity for PR to grab the high ground with, on the one hand, governance issues dominating the agendas of many companies’ boards and social networking on the other? The opportunity is there, but few executives have the hunger, agility and breadth of vision this demands to truly change the market.

Then there is the increasing focus on accountability and productivity, which should open up huge opportunities for direct marketing: it’s a sector comfortable with “measurability” and accountability. Marketing executives want it and procurement departments demand it. The Net is the modern DM executive’s dream – it’s an inherently accountable and infinitely “testable” medium. Will DM execs expand their offer and elbow aside the creative agencies or at least insist on being regarded as true equals?

There is a precedent: media agencies were treated in the same dismissive manner by ad agencies and the chip on the shoulder this created was a huge driver for the first generation of media people. The most interesting development in this context is the merger of Draft and FCB. If this big-scale experiment works, more will follow.

Meanwhile, despite its rise, digital is an area that many people view narrowly. Some assess it as a communications medium, others as a distribution channel and others still, as a directory. Of course, it is all of these things – and much more. It is as important a development as electricity, but, like any utility, will become just as mundane. Now, it’s what people do with electricity that’s interesting, not how well it’s produced.

So digital businesses may well be “absorbed” by conventional agencies, although the record of integration is not great and the two cultures are, currently, incredibly different. However, there must be a real alternative: the sheer hunger, talent and agility within digital agencies is such that some of them will be perfectly capable of morphing into rounded communications businesses.

And what of media agencies? Before the impact of digital, they were the most significant change to the industry in the past 40 years. The biggest media agencies are huge with £7.5bn to £12.5bn turnover, even before they are grouped together under common ownership, but like any large beast they need to keep moving.

What next? Here one cannot avoid the fact that, with the exception of Carat, all the majors are owned by agency groups. Should they provide creative services? Formally, it’s likely they won’t be allowed to by their agency group owners, but in reality they are already involved in creative. First, through their digital subsidiaries; next through increasing involvement in content. This may be through sponsorship, product placement or ideas for taking creative work across other platforms (say from TV through mobile to a social network).

The fact is that many agencies are much too slow and expensive when it comes to producing creative work for today’s 24/7 society. There is no reason why a media agency (and its client) should lose the opportunity because of this failing. Therefore, they will use their own digital resources or sub-contract the task.

Some will argue that the importance of surcommissions in the media agencies finances acts as a severe block if they wish to move centre stage. The argument is that hidden commissions distort agencies’ objectivity and their ability to recommend what’s right for their clients as opposed to what is most profitable for themselves.

Certainly, there is an important proportion of clients who believe this, but given the rapid turnover of marketing directors and time pressures, there is a bigger proportion who wonder what all the fuss is about – and leave it to procurement. One can argue that it’s pragmatic or that it’s a cop-out. Either way, it is the only potential drawback to the rise and rise of the media agency – assuming that their agency owners give them their head.v

Chris Ingram is chairman of brand-building agency Ingram

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