By Ryan Stoner, a serial entrepreneur and brand strategy and marketing leader. He is currently principal & head of strategy at Dendro.
The strategies and tactics that got us here today are not the ones that will get us ahead tomorrow. Today, advertising is just one consumer touchpoint. From digital to customer experience to community engagement—responding successfully has required C-suites to adapt to the new landscape of business and the capabilities needed to be successful.
C-suites are grappling with intense pressure to drive profitable growth, meet changing demands and keep up with increasing complexity. Taking a hard look at how the structure of the C-suite has changed to meet the demands of the next decade, 82% of CEOs report adding a C-level position in the last five years, ranging from chief digital officer to chief data officer, and chief brand officer. The makeup of the Fortune 500 has also evolved dramatically; since 2000, 52% of companies in the Fortune 500 have either gone bankrupt, been acquired or ceased to exist.
Yet, there are the same “big four” advertising holding companies from 2000. The evolution of agencies needs to change to mirror the new wave of high-growth companies. It’s time to acknowledge the changes in business and take action.
Giant brands are a favorite client base for big agency conglomerates, with their complex needs and big ad budgets. But traditional agency models are often bogged down with overhead, talent costs and time-based compensation models.
And for smaller growth-stage companies living in a data-driven business climate, marketing and creative talent are being increasingly taken in-house while they look for specialized partners to handle specific needs. As reported by InsideRadio, Gartner, Inc. found in their Annual CMO Spend Survey (registration required) that 10% of marketing dollars go toward brand strategy and activation.
Moving forward, I believe we can bank on companies taking a fresh look at what it means to have a roster of multi-hyphenated talent and creative partners—a combination of partner companies or individuals who have dual skill sets or extensibility. In today’s ultrafast world, so many things can change, and so many brands require people who can use their primary skills or can flex to pitch hit on a secondary effort.
So what’s the way forward for creative agencies to better map to the needs of the evolving Fortune 500? Agencies must adapt to justify their place in their clients’ rosters more than ever. Brands need partners focused on solving problems through creative actions, and people who look at a business from the core out, to strengthen your brand around your existing productions and services.
Let’s take a closer look at what changes are needed for creative partners to deliver on the shifting needs of today’s C-suite to build efficient and progressive companies. Creative partners are also expanding or reshaping existing roles to address three key focus areas—strategy, creativity and technology.
The ability of leadership teams to react quickly to changing market and customer needs is reliant on partners who can deliver a unique combination of skills and experience that enables clients to address specific needs. Clients need partners that can deliver on the growth triple play by unifying purpose, creativity and analytics. These are the factors that drive revenue growth of 2.3 times. Agencies of the future can win if they have the best and right use of three essential factors.
1. Strategy: A robust strategy can lead the vision to identify, spark and sustain what a brand stands for and a culture of ideas positioned to capitalize on emerging opportunities. Furthermore, first- and third-party data shouldn’t be relegated to optimization, but rather utilized in the strategic process to illuminate business potential and avenues for growth.
2. Creativity: Generating creative ideas that express the vision and bring forward new opportunities for marketing, media and design.
3. Technology: Innovative technology can leverage the vision, talents and technological expertise required to develop breakthrough and cost-effective businesses. Creating moments that are meaningful for customers requires analytic understanding to map customer trigger points and unearth insights.
The future-based outcomes that come from this kind of triple play are brand innovation that can be carried forward successfully to deliver growth. A company can better deliver on customer needs in ways that emphasize a brand’s unique values and qualities that drive thought leadership and influence.
Agencies can take several actions to include more strategy, creativity and technology in their companies. First, you should audit and address go-to-market alignment roadblocks to unite all functions around the three focus areas. Do you have the right talent, processes and organizational structure?
Secondly, do you have clarity around your clients’ larger business and marketing goals? Once you have a clear bull’s-eye, you can develop clear goal directives and incentive structures for each unique function connected to clients’ success.
Growth is a team sport, and best practices of world-class agency 3.0 include an understanding of both upstream (strategic) and downstream (tactical) marketing with processes or guidelines that establish shared ownership among all roles and functions.
Agency 3.0 will look like a general building contractor, managing the client and aligning highly specialized groups of experts to come in, solve problems and leave. They must escape the billing hours model and instead get paid based on specific deliverables and outcomes.
As David Droga aptly put it in his Fast Company interview, “Every client is now faced with different headwinds, from what customers want to what their expectations are, to understanding and navigating the metaverse, to the responsibilities that come with sustainability.”
Agency 3.0 needs to differentiate on people, results, scale and POV. Instead of a massive company with slow processes, tactical outputs and lumbering overhead, high-growth companies are looking for smart, creative, fast-moving, strategic thinkers who can guide them, help them pivot and show them a different future pairing data and cultural resonance. Who knows, the next big innovation in agencies may be a DAO.