Agile agencies are the future of advertising
We no longer live in a world where brands reward agencies for creativity alone. In recent years we started seeing the influence of technology on the advertising industry like never before. But while digital marketing is transforming the way we advertise and communicate, some marketing and advertising processes seem stuck in the 1980s, using manual job bags and methods that match the industrial age rather than digital ways of working.
As more tools, automation and bots penetrate marketing departments, the agencies that don’t transform toward the future will be left behind, wasting time on tasks and slowing down strategic decision-making.
You need a sound administration system to run large campaigns successfully, but that doesn’t mean you need to run advertising processes dysfunctionally. Most marketers will tell you that their average cost of client service is 25%-30% of their agency spend. Wastage, like cancelled or changed briefs and missed flighting deadlines, make up 12%-17% of the spend. That leaves roughly 55% of agency spend contributing to the successful execution of an idea that drives sales.
Marketers are wising up to this quickly. Investments in process automation in leading marketing departments mean they can outperform agencies. Brief management, proofing and online review tools are now the areas that marketers control as agencies underinvest in their workflow systems and overinvest in their accounting systems.
Advertising is not only about making an advert any more. Reporting inefficiencies means there is often a disconnect among agency, media and strategy. Digital can speed up responses, but you would be surprised at how few marketing departments have adequate real-time reporting linked to their creative execution. Very few agencies link UTMs (urchin tracking modules) back to briefs or key performance indicators - so reporting shows cost per action or cost per impression, but the brand can gain no in-depth intelligence and no long-term learning.
As agencies start moving towards automation and reducing their back-office costs as a percentage of fees, several things will happen. First, retainers will increase, because the value created by advertising will be more easily apparent in better reporting and sales results. Second, agency structures will change, with fewer client service staff and more strategy and creative staff. Third, agency margins will improve as a result of less wastage, better efficiencies and more transparency, which will make it easier for agencies and clients to identify mistakes and fix them.
When Vodacom adopted an agile methodology, the pace of work immediately picked up, reports Abey Mokgwatsane, managing executive of the brand at the company. “We were worried that our agency partners would not be able to keep up with it. What we really needed was a more pragmatic solution that would work not only for us but also for our external partners. After working with each team and designing its individual processes, we implemented a bespoke workflow management and collaboration tool that automated processes and communication among all the Vodacom teams and ourselves, along with a whole bunch of other agencies that have partnered together to take dual responsibility for how we become more effective how we communicate better.”
Vodacom integrated this new system into its internal management system, which means that once a brief is issued it’s automatically added to its accounting and work management processes.
Agency executives considering change frequently talk of the challenge associated with overcoming business as usual. By aggressively embracing agile practices, executives can transform their agencies into fast-moving teams that continually drive growth for the company and its clients.
What separates an agile agency from the masses is a culture of accountability, experimentation and learning.
Nevo Hadas is a partner at DYDX.
The big take-out:
Reporting inefficiencies means there is often a disconnect between agency, media and strategy.
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