The future of advertising agencies: technology killed the ad man

An article published in Ad Age quotes Kimberley-Clark CMO, Clive Sirken predicting that the advertising agency of the future will adopt an Uber-like approach: “managing the traffic without owning the ride, or in the case of agencies, owning the relationship with a client, the strategy and data without owning the execution”.

Agencies still in existence have, out of necessity, undergone massive change over the past decade. As brands recognised that suturing all aspects of brand exposure into a cohesive representation of the organisation, advertising agencies have upskilled into social, digital, and mobile – or bought up companies specialising in these skills.

At the recent Viva Technology conference held in Paris, it was clear that that the old agency model being “under threat” is euphemistic. The old agency model is dying. The focus of the conference is, as one could gather from its name — tech. It is a melting pot of technology start-ups and innovators. Our parent company, Publicis Groupe, was a co-organiser of the event, and I couldn’t help questioning: “Why would a global advertising and marketing agency be so invested in a technology and innovation conference?”

Sirken partly answers this question — agencies that are not drastically evolving their business model will become obsolete. However, there’s more to the change, and the recurring themes of the conference help to highlight some aspects of what the agency of the future might look like.

Among these, artificial intelligence (AI), augmented and virtual reality, and blockchain technologies attracted most interest from investors. AI, AR and VR are technologies that present a clear link to the advertising world, with the heavy hitters investing huge sums in AR/VR development, and even smaller development houses creating pretty impressive algorithms within the AI space.

Advertising agencies that are not drastically evolving their business model will become obsolete

Just as the industrial revolution changed production enterprises in unforeseeable ways, so too are we only beginning to glimpse of how AI is impacting what we currently take for granted. The advances are such that, already, bots have threatened to the point of obsolescence customer services, mirroring the impact of mechanisation on the labour force.

In our own work, we’ve long maintained that the creativity-tech split in advertising has been readjusted: while creativity cannot be (at this stage) trumped by technology, the science tech brings to the advertising equation has equalled its importance to creativity. And already, we are moving forward with more and more AI input. Human beings, in some disciplines, simply cannot better AI, and business overall is benefitting from the advances. Adoption positively impacts bottom line results, businesses no longer exhibit any reluctance to embrace tech today, where as recently as five years ago, it was untested, and largely unheard of.

So why the interest from the advertising industry in fin-tech? Blockchain developments and advances courted so much interest at Viva Technology Paris, from all sectors, that one might assume broad-based application potential. Known primarily for its utilisation in virtual currencies such as BitCoin, blockchain is practically unhackable, and is fast becoming the underlying technology in all financial services.

So why advertising?

When newly discovered, the application of electricity was largely shock value — pun intended. Circuses would apply current to corpses, briefly animating them, in a grotesque display that beyond vulgar entertainment, held no value. Yet, life without electricity today is unimaginable.

Similarly, the blockchain connection might not be obvious right now. Or, might it be pointing to the agency of the future – understanding that its role will be one of a creative hub, tasked with solving business problems? What we do know, is the pressure to evolve is mounting. We also know that today, marketing and advertising exists wholly as a means to an end — and the precise discipline in achieving that end will change.

Already, consulting houses such as Accenture and Deloitte are heavily threatening marketing agencies. They are solving the same business problems, using different approaches – and their approaches are heavily dependent on technology innovations.

In 2013, The Economist ran an article claiming, “Technology is creating ever more markets in which innovators, investors and consumers—not workers—get the lion’s share of the gains.” The implication of this for the leaders of industry from a decade ago is dire — but the potential for a new approach to business is extraordinary… and technology and innovation is leading the charge.

What we saw at Viva Technology Paris is that technology companies are now solving the problems that were the domain of agencies, traditionally. Additionally, smaller innovation and technology agencies are focused, have agility, and speed to market. The agency of the future will be about using creativity to place tech solutions to solve business challenges, largely, or completely moving away from the current model, and thoroughly redefining the relationship between innovation, technology, and creativity.