Advermarketing 2012

So what will the world of advertising and marketing look like in three years time? More importantly, what will an agency look like? If the current trends continue my guess is that many of us are in for a big shock.

Our industry is in a state of upheaval, and it is likely that the future will be marked by a dramatic shift in the roles of agencies, and the personnel we will need.

Most people are blaming this rapid rate of change on technology. But it’s not technology that’s changing it. Technological change has simply made it easier to identify the real challenge – consumers are complex.

Even more so, persuading consumers to do things is a really complicated business. In 2012 we will have to do more than just create campaigns. We will have to study areas such as; human nature, psychology, and human behaviour, and we will have to make our output really fun.

Yes, the outlook does depend on the future of global commerce, and while technology evolves, so must the tools, talents, and skills necessary to differentiate and communicate with consumers, and today these tools are increasingly digital. Agencies must ask themselves if they have the youth, the digital skills, the real experience, and the intellectual resources necessary to compete in this evolving economy.

By 2012 the actual size of an agency will only matter to clients who are more comfortable with the old analog model instead of the newer digital reality of open-source creativity and scientific accountability.

Agencies have traditionally hired young employees because they cost less, but now savvy agencies prize youth for their digital skills, fresh perspective and creative abilities. However in today’s climate can we really accommodate inexperienced junior staff, and make money out of them?

It is likely that the days of the traditional generalist agency will come to an end. Agencies of the future will either be defined as the ‘creators of ideas’ (known as C agencies), or ‘producers’ or ‘placers’ of those ideas (the P agencies). The really smart C agencies will become combined communication agencies that clients hire to handle strategy, creative, and multichannel advermarketing programs, and these agencies will solve problems and create ideas that grow brands, and their bank accounts.

The C agency of the future will need individuals who are each a mix of account strategists, possess creative vision, intellectual bandwidth, communication, and organisational capabilities, all of which are needed to direct highly fragmented, complex campaigns.

These ‘Producer’ types (think Hollywood style here) will work with a diverse mix of specialists – media, interactive, creative, PR, research, in order to craft highly complex, yet elegant solutions to real business problems, and then work with P agencies to bring those ideas to life in multiple channels, and to multiple audiences, while ensuring everyone stays ‘on brand’.

The thinkers and creators, those C agencies that solve business and communication problems, will enjoy better margins and healthier client relationships as their insight and intelligence will be recognised and rewarded, most likely on a fee, or percentage of profit basis.

The P agencies will face far more pricing pressure, as they will have engage procurement departments who will drive down the cost of production and placement of campaigns. Much of this work may even go offshore, so a successful P agency will need to combine efficiency, quality and customer service if it wants to succeed.

Bigger agencies can be slow, inefficient and expensive. Smaller agencies do not have the range of expertise, but in each we can already see the two main aspects to an evolved agency: creative (C), production/placer (P) often reflected in departmental names. In the future however, smart agencies will outsource more, both intra-agency and inter-agency, but increasingly harvesting more ideas and content through the general public.

By 2012 the full-service generalist agency tradition will give way to a Keiretsu model – a business group, or set of companies, with interlocking business relationships. Maybe the agency networks will play a larger role utilising all their agencies together. Maybe smaller agencies will form their own Keiretsu. In any event, agencies will need to define themselves in an effort to respond to a new order dominated by fragmenting consumer segments and cost-conscious clients.