Of technology and ad agency fragmentation

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In a post titled ‘Technology is wrecking the advertising industry’, Mike Harris of 180LA rues the fact that many clients are working with several ‘specialist’ agencies and outlines the pitfalls of such an approach. The trigger for such a scenario seems to have been the rise of technology and new media in consumer habits. He makes an interesting point about the rise of television advertising in the ‘50s:

We need whole new agencies to do social media posts and rich banners. Ludicrous. If this were true back in 1950 there would have been new television agencies popping up left and right. And clients willing to pay multiple agency fees for said television agencies in addition to their print agencies.

So why didn’t agencies allow specialist ‘TV script agencies’ to sprout back in the 50s in the west and in the 90s in India. In my view (and this is all speculation): it is do with familiarity of the medium. I would imagine copywriters back in the 1950s would be familiar with cinema as a medium (moving pictures were around for decades even then) and TV advertising was ‘movie-making’ in a sense, just with a commercial angle. And ad agencies had only to write the script and ‘writing’ in any form (press ads, leaflets and such like) was again familiar territory for ad agency folk. In India too, when TV took off in the 90s, ad agency folks took to the medium with ease.

But technology-led advertising or advertising on new media is a different kettle of fish. The ad agency who’ve grown up on a diet of ‘traditional’ stuff like printed books, feature films, radio, television find (again I am speculating) banner ads, social media content, coding, mobile apps etc., unfamiliar territory. They, especially the older folk in advertising, have perhaps allowed themselves to be intimidated by such new media platforms. And that’s partly the reason why they’ve simply watched the rise of specialist agencies who create campaigns in news media.

Having said that, I agree with Mike – technology should not be the focus of advertising at all. Today, ad tech, big data, analytics, programmatic buying etc., are all the rage. But they will never be able to replace human emotion and intuition – the spark that triggers a big idea for a brand. Sadly, the traditional agencies have allowed themselves to believe otherwise.

I find the situation irreversible for ad agencies – the toothpaste cannot go back into the tube. They and their clients have to live with multiple specialist outfits: media planning & buying, social media content, web design, app design & development, brand content, events and so on. It is also unrealistic to expect an agency to invest in technology specialists under one roof, one P&L. The remuneration structure simply does not allow for such investments. I think the practice of an ad agency primarily focusing on television ads (and by extension long format films for online media) while several others from media agency to digital agency do the rest will continue for some time to come.

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