Advertising is “so broken”. But should it be?

Here’s the irony: media usage has never been higher. People now spend a whopping 11 hours with media every single day¹. Advertising should work, at least with those numbers, right? But it doesn’t. In many ways, we’ve reached “peak disillusionment”. According to the Edelman Trust barometer, 2018 marks the first year that media has become the least-trusted institution in that study’s eighteen-year history.

And why is that? Well, at least some of the fault lies with advertising agencies. Yes, us.

Many have observed ad agencies are mired in old models and are slow to change. Why does creative thinking, in some cases, still start with a TV ad? Why do media agencies work with buying demographics that haven’t made sense in a decade? Why do agencies even need to be told they must show their ROI (and where the actual money is being spent)?

Advertising is at risk of a bigger reinvention than ride-hailing, hotel booking, or grocery shopping. Remember, none mourned Blockbuster when it was replaced by Netflix.

blockbuster-closed1.jpg

And why are we at this crossroads? It’s because many agencies have forgotten that the tension that comes from change—social, economic, emotional—is the driving force behind our business and great work. Once you stop changing and being thrilled and interested in change, you stagnate. And you get replaced.

When did Change become something agencies fear?

You could point to the FAANGs of this world as the culprit, or the growing pressures from client procurement. But the awkward and uncomfortable truth is that we as an industry haven’t truly confronted the fact that consumers—no, make that people—don’t want to be advertised to anymore, and have the means and will to block advertising out of their lives.

Clients can smell the lack of confidence. They have tightened fees, demanded transparency, shifting to project basis rather than roster. Most concerningly, they’re looking to different models to address their needs: cue the rise of the hybrid consultancy-as-agency, or the creation of in-house agencies.

The “other” uncomfortable truth is that marketers are just as confounded by the speed of change as agencies. They’re beset by operational challenges, market saturation, a dearth of talent, and most importantly, stagnating growth. Their categories are just as vulnerable to reinvention.

In the midst of all this change, agencies and clients alike are searching for a strong point of view.

Clients are thirsting for an informed opinion about what to do next. It’s the reason why creative personalities like Bob Greenberg and Alex Bogusky still carry so much weight. They have strong opinions—the lifeblood of our industry. Or look at Nike’s recent work with Colin Kaepernick—love it, hate it, it’s sparking conversations. You have to put your finger on the tension point and have a POV to stand out, to evolve, to survive.

  Nike, “Dream Crazy, Wieden+Kennedy

Nike, “Dream Crazy, Wieden+Kennedy

And with the talk, comes the walk - it’s not enough to have a point of view. You need to commit to change from within, and have a strategy to evolve how you tackle your own business. In particular, R/GA continues to evolve, and—agree or disagree with their direction—they’re taking action.

Right. So what’s the strategy?

The funny thing about transformation and change is that it’s one of the reasons why many of us got into advertising in the first place. We need to lift ourselves out of day-to-day implementation mode and invest in the agency’s future. Here are just some of the big questions agencies are considering as they lay down the roadmap to change:

  1. What are the most exciting things about our business, and how do our clients benefit from it? Here consensus isn’t as valuable as having multiple perspectives and streams of thought. Embracing diversity of thinking and a habit of inquiry has an immediate and beneficial impact on culture. Better work and stronger revenue follow.

  2. What kind of agency/client relationship do you want? Agencies and clients must co-evolve how they work together. Frustrated by agencies’ efforts so far, clients are often the one leading this charge—witness how P&G has already piloted three new agency models. The key is to know what kind of work, clients, and relationships you think is best for your agency.

  3. Where is my revenue model going? The retainer is already on its way out, and project-based fees are increasingly popular. Cash flow may be your emergent problem. What kind of models and businesses—IP, rev share, incubators—can serve both your strategy and your bottom line?

  4. How do we make ourselves indispensable? The AOR is becoming a relic as clients seek out “best in class” agencies. The most successful agencies will be those that figure out how to do at least one thing superbly and most effectively coordinate their work with other partner agencies.

  5. Do we have the right talent and teams? Traditionally, teams have been organized by function, and projects shuttle from one to the next in a predictable (and boring) fashion. To get fresh ideas and help teams become more responsive, agencies must explore more cross-functional teams, and find ways to ensure all teams have skin in the game.

  6. How do we keep it fresh? To get the best ideas, agencies must be willing to collaborate, even to the point of bringing in new perspectives from different agencies and industries, to, at minimum, keep that culture of inquiry and learning alive. 

It’s a spectacular time to be in this business. The key is making a shift in mindset: to treating change like the transformative force and true currency of advertising that it is.

Because we like to live the advice we dispense, this piece was co-authored in a highly collaborative fashion between Sarah Ivey of Agents of Necessity, and Paula Cizek of NOBL. Agents of Necessity is a global strategy agency, passionate about the future of the marketing industry and strategy’s rightful place at its helm (we are biased). NOBL is a global change agency that trains leaders and organizations to adopt new behaviors in order to capitalize on market opportunities.

¹Q1 2018 Nielsen Total Audience Report, US

LandingSarah Ivey