Race to Relevance

We are in the third wave of the modern ad business. The first wave was print. In 1940, when you walked into an ad agency you were walking into a print shop. By 1960, an ad agency was all about TV with some print thrown in. Tomorrow all ad agencies will be digital, of course, with working knowledge of all those other media, too. So just to state the obvious, digital channels will drive the ad business for the foreseeable future.

Putting aside the question of whether advertising, as we have known it, will even be relevant in the digital age, we in the ad business are faced with the question of who is going to lead this new world. Will it be digitized traditional agencies or the new breed of digital agencies with big ambitions? Every day we see evidence of the contest afoot. The outcome, however, is far from clear.

Traditional agencies have ruled the roost for 75 years. They’re huge, massively financed, deep experience and a multi-generation incestuous relationship with big brands. On paper they seem unbeatable, but when the ad world began its digital shift around five years ago they became vulnerable.

First, a word about what digital marketing actually is, although, of course, it may be something entirely different tomorrow. Anyone who has worked in both traditional and digital recognizes that digital is brain surgery compared to traditional. Sometimes I really miss the simplicity of an idea, some boards and a TV shoot. Digital, on the other hand, requires all the same skills we’ve always used in traditional plus a host of other disciplines. The result is a complex stew of skill sets that produce the pieces of a complex, interconnected, digital marketing ecosystem.

So the idea that traditional ad agencies can throw some money at digital, hire a few bright sparks and call themselves a digital agency might not fly. Looking like a digital agency to clients, when most of them still do not really understand the space, is a lot easier than actually doing it. Digital work is just too hard. It takes a different mind-set, much more sophisticated processes, a deep understanding of what technology can do and very experienced people. Then when you have all those pieces together, the whole has to mesh perfectly because the tolerances are so much less than traditional advertising. And doing it with the burden of a business model built on making money through mass media is, I believe, virtually impossible.

On the other side of the table digital agencies are confronting their lack of experience in leading accounts. While they know how to create digital projects better than their traditional brethren, they don’t get the basics. Sure clients want digital know-how, but they want functioning, reliable full-service ad agencies more. Before it’s time to talk about tactics and channels, brands need strategy and all the old skills perfected and refined by Madison Avenue. And with gaps in their service offerings and a history of operating below the line, most digital agencies don’t know how to be full service and are not used to the responsibility of the brand vision.

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