Everyone Wants to Be An Agency

If you go to an ad industry conference, you will hear speaker after speaker talk about how the agency model is in jeopardy, and how agencies are doomed by brands who are taking media buying in house, refusing to pay commissions and fees, and building their own DMPs.

So how come everybody but agencies wants to be an agency? It all started with Buzzfeed, which developed one of the first in-house agencies to develop branded content and unique ad formats for its advertisers. Now many of the premium publishers have decided to capture more of their “rightful” ad revenue by creating in-house ad production and ad operations agencies. They also argue that they know what kinds of ads appeal to their particular visitors.

Advertisers have also taken many agency functions in house, believing that they can buy efficiently through programmatic platforms, manage and mine their own data by building their own DMPs, and develop their own branded content.

And last, but not least, there are the large consulting firms, who have been gradually turning themselves into agencies. PWC Interactive says it can advance brands through lead acquisition and retargeting, search and display advertising, performance optimization, and digital program design and management. In other words, outsource your marketing program to us.

KPMG bought Cynergy, and now talks about omni-channel engagement and increasing brand loyalty. And the most far-reaching program, at Deloitte Digital, is the equivalent of a $1.5 billion ad agency. Deloitte Digital has 6000 employees worldwide, and can provide everything from strategy to logistics to agency services. McKinsey has an agency arm, and Accenture also has an interactive agency.

The one place where agencies have a real edge is in their traditional niche: creative. Only agencies know how to hire and manage creatives, and how to develop and present campaigns. These are right brain activities, and the consulting firms are populated by left brain people. The publishers, too, are unfamiliar with creative, although in theory they know how to develop great content.

It’s instructive to watch each of the three contenders — brand, publisher, and consulting firm –vie for the functions that belonged to agencies. We think agencies lost the battled when they decided to base their selling propositions on metrics rather than creativity. The best ads are the ones we remember, and they probably won’t be created by publishers, brands themselves, or consulting firms.

Actually, in the future, they may well be created by consumers.