Advertising Agency of Return

Forbes released an article today that is on point in analyzing the current state of the “advertising industry”.  Keenan Beasley does a nice job of breaking down Michael Farmer’s new book into four easy to digest points that encapsulate many of the issues of the contemporary advertising environment.

Simple Simple is a small company compared to the heavyweights of the advertising world mentioned in the article, but we’re still seeing many of the issues discussed by these men trickle down into our dealings with both clients and other agencies. I’d like to touch quickly on Keenan’s four main points to shed some perspective from a smaller analytics-driven creative advertising agency.

1. An Outdated Compensation Model is Driving Down Costs

After selling ads under many different models we reverted back to a percentage commission on media purchased. We found that this has helped us set realistic and deliverable expectations with our clients that acknowledges our expertise and scope of work, given a fixed budget. Strategy, design, deployment, and reporting are going to grow on a scale that equates to the size of an ad buy. This has helped us focus our clients on a long term vision of their digital advertising as opposed to individual buys in unique channels. This is a topic that is under-discussed and I’m hoping that Keenan pursues it more in further articles because valuing worth is a difficult subject at the best of times.

2. Agencies are Doing More Work Than Ever Before

There’s no doubt that the expectations of expertise in analyzing data and advertising results has changed, even just in the last few years. The time spent to create a compelling report is extreme, but these reports are the foundations for change at many companies. The detailed analysis we provide often results in companies understanding their target market, social capacity, and sales funnels in a much more profound way. While Keenan suggests that the modern agency is carrying a heavy burden because there are so many media outlets (which I agree with), the modern agency can also be a much larger asset to more business groups. There is a level of sophistication required to run a fully (and seamless) integrated campaign and it becomes obvious when a plan has a major gap in performance.

What are the long term placement and metric goals for both ads and social, and how can we help our clients push their quantifiable results in a creative way? This is the question that needs to be answered before an ad buy or integrated campaign can ever go out the door. And that answer will involve work from Snapchat through to data analysis for operations changes. The scope of work out there is almost endless for a true digital agency.

3. Agencies Don’t Know How to Measure What They Do

This portion of his article really hit home for me because I think that he’s nailed a lot of really large points. As a company, we don’t apply for awards because we are concerned with helping business units achieve their goals, and for the most part don’t see how design awards coincide with that, other than just tangentially. Most of our great work is achieved under the hood, in strategy documents and in reports. We’ve found that long-term goals based on a variety of analytics benchmarks, helps push clients in a variety of ways; that creative can assist but rarely drives the campaign results — bad creative on the other hand can certainly sink a campaign, though.

A modern agency needs to be able to show how ads, social, and branded content work together to create predictable results. Pretty pictures aren’t that difficult to create — unifying a brand of scale and having data be a significant contributor to all-channel thinking is a large task that requires vision, expertise, and repetitions under the belt. Many companies fail to understand the power of the numbers we can provide, and the exact precision with which we can create social engagement through media buys.

4. Agencies Are Afraid They Don’t Matter

I think everyone is concerned to see that their work is recognized by their clients — that’s just human nature. With that said, the trend we’re seeing is that companies now have larger marketing teams with more diversified areas of expertise. We’ve found that this has often made our client relationships stronger as it’s provided us with more points of contact that “speak our language” when it comes to integrating design, advertising, social, sales, and execution on a brand level. We’ve embraced client-side growth because it’s brought more experts to the table, and more realistic & defined growth goals.

Overall, Keenan talks about a scale of client and agency that I can barely relate to, but I do think the trends he outlines are easy to see for advertisers of all sizes. A creative advertising agency must be able to show where the client is seeing growth and return based on their work together.

Where is the value to a client in creating a longterm relationship with an agency? What is the return to the client?