via: Golden Mean Advertising Agency
Are you in a dilemma to choose between an ad agency and a new-age digital agency? Read why the ad agency model will extinct soon.
History reveals that human societies and businesses have always woven around technology. Once a lucrative business model may go out of fashion as technology steers the human civilization akin to an over flooded river making its way through plains, pouring down from a steep mountainous region. Remember telephone booths? Similar to the booth business, the traditional ad agency model faces existential challenges now, and here are the main disruptors.
Internet Proliferation
The internet has connected the entire planet like no technology before. Prior to the proliferation of the internet to the masses, the options for a decision-maker in terms of advertising were limited, such as radio, TV, print, and billboards. And, the agencies were strategically positioned to seize the opportunity. The democratization of the internet has opened digital advertising avenues; thus, there are a plethora of choices for the hirers.
Critical Time Lag
Alexander was able to conquer Asia courtesy of the sluggish nature of Persian forces. Akin to that, though agencies have plenty of resources at their disposal, they function in old-school bureaucratic ways. Every idea has to undergo scrutiny, and every plan has to be passed by the superiors. Their speed is no match for a quick-footed digital marketing agency (most probably headed by a Millennial) or worse with a seasoned social media wizard, with a tiny and nimble team.
Outdated Billing Models
Usually, agencies charge by the hour. This billing method creates a conflict of interest. As a client, you would obviously wish for a more effective outcome in a quick time span; however, the agency you employed would ideally want more hours to secure a sizeable invoice.
Creativity Instead of KPIs
Old-school ad agency professionals are proud of themselves as creative artists, whereas new-age digital marketers perceive themselves as analysts with a taste-bud for art. For the former, output was a priority, but the latter likes an optimum outcome. As a client, you have to opt for figures rather than fantasy.
Reluctance in Embracing Technology
According to Darwin's theory of evolution, beings that adapt swiftly and optimally to the ever-changing environment survive the test of time. And, his principle is applicable in a business biosphere too. The new-age digital agencies keep a track of the latest technologies, like SaaS platforms, to optimize their processes. Moreover, they also dip into digital advertising platforms to increase the bandwidth of their campaigns and to fine-tune targetting.
Negligible Consumer Participation
According to Forrester, the future of agencies would rely on how they could switch from “orchestrating campaigns to facilitating conversations.” Traditional agencies tend to sketch campaigns mainly featuring influencers or models who try to promote products or services of the agency clientele. However, digital agencies ensure connectivity between brands they promote and their consumers. It is mostly achieved using user-generated content. It is extremely potent due to its authenticity. For example - A great review by a consumer would be genuine and would narrate the user compatibility and importantly the feeling of the user. The feedback would not feel so mushy as it usually appears when models (acting as promoters) pretend to praise the contracted product.
Implosive Business Model
Ironically, perhaps the paramount threat to the latency ad agency model is the model itself. The prevailing practice of new account acquisition that includes unpaid pitches, wherein the agencies present their precious ideas about a campaign to a prospective client, is no longer sustainable. They tend to allocate their top talent to deliver pitches; however, that means that ongoing projects lack these great resources. As a result, the end-product is not up to the mark, and ultimately, either they have to invest more time to revise the output, or end up losing the business.
