A key role of marketing agencies is to connect brands with their consumers and, after 50 years of strong growth among the marketing agency sector, history suggests that they have been pretty good at it.
However, in a world where an app created in a day can win more than 1 million users in a week (such as the recent ‘Yo!’ app), carefully planned and executed content marketing viewed by, say, 250,000 people over the life of a campaign is ‘good’ but no longer ‘spectacular’. The digital revolution has already caused seismic shifts in the value chain of many industries, so how should marketers deal with this challenge?
The first step is to understand what enabled products such as the Yo! app to succeed. Fame is defined as being known by lots of people and before digital there was a significant cost associated with owning the infrastructure needed to reach a large audience. For example, not many of us can afford our own television network. The internet has changed all this, with approximately 7bn people connected online. With lower cost of entry and virtually no content filter comes greater supply, resulting in consumers having greater choice and demanding increasingly niche products (such as an app that only says ‘Yo!’).
L’Oreal is one brand that understands how the rhythm of the product cycle has changed: each year a third of L’Oreal products are new because consumers and retailers now expect that level of innovation. While L’Oreal is able to cater for demand in-house, most industries struggle. For example behemoths like Boeing have seen innovation move outhouse and down the supply chain to electronic component manufacturers. To cope with this Boeing have worked hard to become ‘supplier ready’, working to absorb others’ innovation, rather than battling to compete with it.
Agencies need to adopt a similar stance, as innovation has moved outhouse, whether they like it or not.
This sounds odd but it's not Hearst, News Corp or even Facebook making social and digital trends, its individuals, such as the millions of individual people who have posted a billion cat-related videos on the net. It’s no coincidence that a cat currently narrates O2’s adverts.
Technology innovations are happening in a similar manner. Whatsapp was bought for $19bn by Facebook on the basis that it was a good idea which people liked and used. The idea didn't require significant investment or resources to make it popular, all that was needed was two unemployed coders with a good idea and the internet.
When success is defined by nimbly responding to consumer demand, big companies struggle. It's like a tanker trying to turn compared to a little sail ship: the tanker is big and strong but has invested too much in going forward to be able to do a 180 degree turn on request.
In this digital landscape agencies are responsible for making brands ‘supplier ready’ and able to move in time with consumers rather than running to keep up. How then to achieve this? According to the late Steve Jobs, creativity in the technology industry is “just connecting things”.
Marketing plays a key role in the technology industry’s culture of collaboration. An idea needs an audience to progress beyond the realms of fantasy. It is, however, interesting that even Google admits to a deficit of ‘mad men’, as they employ ‘maths men’ at a ratio of 2:1. This gives agencies the opportunity to authentically embed themselves in technology brands innovation process. Even Google needs help explaining why people need Glass.
By collaborating in this manner agencies become best placed to connect brands with their audiences as they understand digital innovators better than brands and they understand brands better than digital innovators. This preserves agencies prime, original role of producing campaigns.
Many marketing agencies have already taken note of this train of thought: for example Ogilvy has its own labs that work with over 75 partners to understand and integrate the latest innovations into their work.
Of course not all agencies have the resources to create departments dedicated to working with technology partners. A more practical response might be attending start up meetings or offering a few desks to start-ups to work in-house. The reward for doing so could be considerable. In an increasingly connected society, failing to rapidly adapt to the new sources of innovation will lead to an inability to fulfil marketing’s basic function, namely connecting with the consumer.
Mark Schumacher is head of trade marketing at Mediator Communications Ltd