Picture: ISTOCK
Picture: ISTOCK

The AdForum Worldwide Summit, attended by search consultants and agencies from around the globe who share best-practice learning’s, is held annually in New York. This year, swift digital transformation was a key trend under discussion. Most speakers urged agencies to help their clients embrace the digital revolution and find ways to make life simpler for chief marketing officers (CMOs).

Attendance at the summit is by invitation only. Johanna McDowell of the Independent Agency Search & Selection Company was one of the delegates this year.

There is no doubt that companies and brands that predate the digital revolution and have not yet transformed are struggling. Fortune 500 companies that have failed to change have stopped growing, while technology has opened the door to a new crop of companies that provide asymmetrical competition – think Amazon competing with Wal-Mart, or Airing with physical travel agencies.

Marketers are building more in-house capabilities, which are creating tougher competition for agencies. There are a number of reasons for this, says McDowell. “Clients want to own their intellectual property; they want the flexibility to react quickly to situations – which owning their own media makes possible – and, of course, there are cost implications. It’s always going to be cheaper to have in-house capabilities.”

The big take-out

The Isa’s Johanna McDowell recently returned from the AdForum Worldwide Summit held in New York, where, she says, the biggest learning for SA agencies is to do things that will simplify the jobs of CMOs.

Agencies should take the opportunity to help their clients transform in this digital world. “Facilitate innovation and [advise] clients [about] the creation of new business models that work faster,” says McDowell.

Interestingly, she points out that consulting companies, which have long been considered a threat to the advertising industry, are turning out to be less so than originally thought, as they are still not solving the issues that agencies do.

“One of the most significant learnings to come out of the summit is that agencies need to simplify life for CMOs,” says McDowell. There are a number of ways to do this: by innovating, by assisting clients with their digital transformation and by using data more efficiently. 

McDowell says most clients don’t want new agencies to start changing everything as soon as they come on board. “Clients are nervous and want the agency to start with smaller projects to prove themselves before tackling larger projects,” she says.

A final observation from the summit is the apparent death of the holding company. It is an outdated business model that clients say they are dissatisfaction with. “The industry is changing, and while the holding company model has been under pressure for some time, it’s now under full assault,” says McDowell. She illustrates with the example of an agency network such as TBWA, which positions itself as a “collective” as opposed to a network within a holding company.