By Bernie Van Osdal, EVP, Center for Sales Excellence, Triad
Over the past decade, a myriad of published articles have lamented the demise of advertising agencies and what should be done to improve a struggling operating model. In fact, searching for "death of ad agencies" returns 114 million Google results. That's a lot of negativity! But, as with any major shift, more attention is given to the negative aspects instead of innovative models which rise from an ever-evolving landscape. The agency model as we know it is not completely gone. It has morphed into something different with new players, technologies and methodologies for driving business.
This new path is focused on increased direct connections brands now have with consumers, their journey and ultimately, shopper behaviors. And, because of the preponderance of readily available data — fueled by new technology solutions — brands are taking more of a lead role in their future. They are becoming self-sufficient and creating more direct connections with consumers from first contact through final sale.
With this shift towards performance-based marketing and data, national brand-building budgets are starting to merge with previously below-the-line shopper marketing budgets. With this confluence of marketing activity, the expertise required to manage a combined approach has also changed. Traditional marketing and technical expertise have, out of necessity, begun to merge.
From Upper-Funnel Brand Building to Data-Driven Retail
Marketing and advertising have become more focused on driving business at the retail level using data and technology.
The influx of data derived from increasingly tech-focused marketing provides a much clearer picture of the consumer. As a result, brands are taking greater control of their consumer insights, while beefing up marketing departments and in-house ad agencies. They’re also working closer with non-traditional external digital media firms to assist with programming development, campaign creation and management.
In a nutshell, it's becoming a race to effectively create, leverage and activate a CRM database to power intimate connections between brands and consumers. This requires a new kind of ad agency which, in reality, isn't even an ad agency at all, but more of a consulting service geared toward helping brands capture shoppers along their purchase journey.
A Data-Driven, Consumer Mindset That's Focused on the Retail Journey
Amazon, for example, gets significant mindshare as the end-all, be-all retail solution — to the detriment of brands and agencies that don’t fully leverage the entire shopper marketing landscape. Over 96% of CPG purchases still occur in-store. Without a proper omni-channel strategy and attention to the non-Amazon online retail world, brands will ultimately lose.
So what's the path to greater consumer success? For brands it’s simply a lesson on how to properly approach targeting to capture the right consumers along their purchase journey.
Today's marketing landscape is filled with thousands of solutions designed to leverage consumer behavior online and off. The problem is that many models rely on data collected from a small audience that is then extrapolated to identify and market to a large, broader consumer segment.
For a moment, consider the unique one-to-one holistic customer view brands could obtain by taking disparate consumer signals such as shopping habits, location, purchase cycles and trends — paired with proprietary data modeling — and layering these distinct data sets to determine how particular products or services index at individual retailers. Perhaps then marketers would feel more empowered to take those insights and advise brand partners on how, when and where to allocate budgets based specifically on retail activity.
While marketing and advertising has always been about driving sales, historically many strategies marketers and agencies employ have been top-of-funnel, brand-building tactics. With the explosion of available data, brands are now able to see, know, and take more action on their insights, tapping the expertise of digital media experts steeped in leveraging this data for accurate, efficient, retail sales-driven success.
So no, despite those 114 million "death of the ad agency" search results, the ad agency is decidedly not dead. It has transformed into something new: a data-driven, consumer mindset, focused as a retail journey expert.