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Everything you need to know about… The fundamental transformation facing agencies

It can be hard to keep pace in the fast moving space of programmatic, which is where we come in. The Drum has teamed with the Trade Desk for a series of short video primers and accompanying features in print to tell agencies and brands everything they need to know about complex issues. In the latest instalment, we take a look at how agencies need to redefine their role.

It’s the advertising arms race of today: as programmatic moves to become the industry’s de facto trading mechanism, agencies are having to reimagine their very businesses for future success.

UK programmatic digital display ad spending will reach £1.80bn this year, according to eMarketer, accounting for more than half (59 per cent) of the overall display ad market for the first time.

It is not just affecting display – the UK’s IAB estimates that up to 80 per cent of all digital advertising will be spent programmatically by 2018, buoyed by a rise of its use in video and mobile. Outdoor, radio and (whisper it) TV are also beginning to be traded in this way too.

But what does that mean for agencies and how they are shaping themselves to deliver for clients? The sixth episode of Everything You Need to Know About Programmatic explores just that.

The series aims to get under the skin of the fast-moving programmatic landscape and bust prevailing myths – automatic trading will not, for instance, negate the need for real smart practitioners in media agencies. The bots will not take jobs, although roles might change – an example being the world’s money markets, where automatic trading has been the norm for some time, and yet Canary Wharf still throngs with city slickers.

Programmatic, says the Trade Desk’s UK general manager James Patterson, “is a tool that is helping both marketers and agencies better do their jobs”.

Sophisticated technology streamlines the grunt-work leaving agencies free to be more productive in turning raw data into valuable insights – something that computers can never do. Done well it is but one tool helping the industry move from delivering siloed, media-centric experiences to cross-device, consumer-centric journeys.

And media, he suggests, welcomes disruption – look at how media agencies decoupled from full service operations 30-odd years ago as networks realised that by offering planning and buying at arms-length they could offer greater transparency, buying power and economies of scale. Over decades they evolved to take account of new medias while still adhering to analogue principles.

That world is shifting once again. Agencies are increasingly diversifying their talent pools, with content experts, technologists, consultants and data analysts joining the mix of account execs, planners and buyers.

Starcom Mediavest’s EMEA chief executive Iain Jacob believes that agencies not only need to find the right talent in-house but also spend more money in building or buying new businesses and time in seeking out and collaborating with the best external tech solutions for their clients. “We need to become the ‘joining-up people’ for them,” he says.

“The whole industry is going through a fundamental transformation – and the honest truth is we’re in the very early stages.” Conversely, as the marcomms ecosystem gets ever more complicated, agencies must simplify and redefine their role. The digital transformation within the big network agencies began more than five years ago, but we are now “operating in a post digital world and a bigger transformation is taking place”.

Jacob believes the conversation around programmatic needs to evolve beyond the mere executional – ad fraud and viewability, for example – to where the data can take brands and how this much deeper insight can motivate and influence. “We are audience first and people first, not technology first or platform first. And that means as an agency we have to be much more open source.”

Yet it is not just media agencies that must shift to properly execute the advantages that programmatic and real-time advertising brings – so too must creative agencies. TUI Group head of media Samantha Austin says collaboration and closer sharing of data and insights is key between a brand and all of its agency partners. “We need to get closer to our agencies and share data sets. We need to be collaborative teams responsible for running campaigns for an advertiser together.”

The rationale is that reaching the right person with the right message at the right time in the right environment is a moot point if the consumer is screening it out – either intuitively or, increasingly, via ad blocking technology (approximately 12 million Brits already do). “If we continue to serve unengaging and rubbish creative then people will want to block those ads even more,” says Austin.

A valuable reminder, according to Patterson, that tech is the starting point and not the finished article: “Automation cannot overtake experimentation. We are naturally curious and the best marketing will always push boundaries.”

Rarely have agencies had so much to play for.

Everything You Need to Know About Programmatic is the sixth in the EYNTK series designed to help viewers quickly get up to speed with some of the most important issues in today’s marketing industry.

From debunking common myths to explaining the intricacies of private market places and the forward market, plus exploring the agency of the future, EYNTK aims to give you all the knowledge you need in one short film – something you can watch in the back of a taxi on the way to your next crucial meeting on the subject (hence why each episode is filmed in the back of a London black cab).

The entire series is available at the dedicated hub.

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