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Get Ready For the Advertising World to Transform, Again

February 1, 2012 by Kevin Michael Gray

The world at large has been talking quite a bit about the future of advertising and how it will relate to ad agencies.  Industry leaders have been asking questions like, 'is the current agency model here to stay...'  I think we can all agree that the digital landscape has changed to way we interact both as consumers and advertisers.  Today's featured article features a recent article on AdAge.com that offers its predictions as it relates to the advertising agency model.  What are your thoughts?  We would love to hear form you tweet us at @futureagencies #futureofagencies Read the article below:

Future of Advertising Agencies

1. Online will take measurement from TV, but make it better.

I dislike the notion of bringing TV's Gross Ratings Point, or GRP, to digital media, as I feel that its using a half-assed offline metric and applying it to something that could be so much greater (I do realize billions of dollars are traded on it). Even with my disdain for the GRP, I do like what the comScore and AdXpose team is doing around the Validated GRP, which will be released later this month (January). Why this is exciting to me is because we basically created the "validity" portion in my last company, IGA Worldwide, where we created an in-game ad server that measured impressions by time on screen, angle of impression, and size of impression. If all three vectors did not meet minimum criteria, we did not count it as a validated impression for our clients. It is about time that this type of impression measurement system moves to the web. In 2012, the vGRP will be released and we will see some major agencies using it as one of the primary measurement tool. I look forward to diving in deeper to the vGRP for The Media Kitchen and our clients.

2. Some agencies will transform with technology, some won't.

Over the past three years marketing technology platforms have penetrated Madison Avenue en masse; it was the "hot" area. Over the next 12 months, agencies will realize they actually have technology for media delivery and optimization and have to go from the bright-shiny-object (honeymoon phase) to the holy-crap-it's-time-to-build-a-business-phase. Why this gets a significant call-out is because this fundamentally impacts how agencies go to market and structure their organizations. Organizational change is never easy and we do not expect every agency to nail becoming a pseudo hybrid technology organization. Some agencies might write off their trading desks, others will avoid this area all together, but many will start scaling and seeing positive returns. It's not easy to get through this next phase, but we should be studying the agencies that nail it as that could be the future platforms of media, analytics, strategy and potentially creative on Madison Avenue.

3. Agencies who are not agencies challenge the agencies.

There are quite a few companies out there in the marketplace who position themselves not as agencies, but take both agency and client-direct media spend and place them in the market. Some independent DSPs, ad networks, and boutique players fall into this category. While many of these players do not like referring to themselves as media or other types of agencies, largely because they are venture backed and do not want service multiples applied to their valuations, they will challenge the more traditional media agencies in 2012 in at least a few digital media pitches. These new organizations were built with technology at their core, and have the best chance at potentially using this technology to help their clients solve their problems. If this happens, there could be a big shift of power from the old guard to the new. I do not expect Madison Avenue to be disintermediated in 2012, but we'll start to see some none-traditional agencies part of a few new business pitches.



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