Picture: ISTOCK
Picture: ISTOCK

It’s official: the advertising industry has been disrupted. The fact that the top 10 agencies in a recent Ad Age report were companies that have not traditionally been part of the ad industry says it all. And at this year’s Cannes Lions Festival of Creativity, arguably the most significant advertising award show of the year, traditional ad agencies were competing against the likes of Accenture, IBM and Deloitte rather than other advertising agencies.

Consulting and technology companies are reshaping the industry at a rapid rate, and traditional media agencies are starting to feel the pinch.

Reflecting on what he learned at Cannes this year, Ran Neu-Ner, co-CEO of the Creative Counsel group, says consulting companies – which are often part of the value chain before ad agencies are brought in – are increasingly encroaching on what used to be the turf of ad agencies.

The big take-out:

In the race to disrupt – or be disrupted – the most successful brands will be those that deliver the best experiences.

“The traditional ad agency model – which has worked reasonably well to date – is being disrupted and we urgently need to implement a new, disruptive model,” says Neu-Ner.

Agencies, he says, need to start thinking beyond advertising and leverage their core skills of knowing and understanding consumers. In addition, they need to bring in resources from other industries and use creativity to discover, invent and deliver.

Neu-Ner says a new agency model starts with ensuring that the consumer and brand are connected. This connection must be enabled using data, which is the new currency. Alluding to a comment made by Nike CEO Mark Parker, he explains that Nike is a big data company that also sells sportswear. “The biggest companies today are all data companies,” he says.

Marketers need to learn to find data in less obvious places, such as traffic navigation app Waze and digital music service Spotify. In addition to using this data in their campaigns, they also need to analyse data after their campaigns have run, he says. “We need to use data to find out why people do what they do.” 

Neu-Ner says brands and marketers need to disrupt or be disrupted, and that the best brands will be those that create and deliver the best experiences. Adidas, a brand on the verge of insolvency in 2014, successfully disrupted its own product category, as well as its route to market, to become the most successful sportswear company in the world.

Marketers and their agencies need to think carefully how about how to disrupt their own brands, says Neu-Ner. Adidas did this by making its brand a platform for anybody who wants to design sports shoes.

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