Albert Einstein once said the definition of insanity is “doing the same thing over and over again and expecting different results”. If you’ve been involved in digital marketing, and specifically the agency business, for any length of time over the last 20 years, you’ve probably felt this insanity at least a few times.
I used to be on the agency side, and I know firsthand how rough it can be. The agency business is in a transition period right now, from one that is manual and idea-driven to one that is more automated, enterprise-solution-oriented and data-driven.
The obvious examples lay in the rapid expansion of DSPs, DMPs, RTB and other programmatic platforms, but there’s more to it than that. We’re seeing efficiency and technology brought to the buying process, the creative process and other areas where inefficiency has been bred, and where agencies kept doing things the same way over and over, hoping for a different, less painful outcome.
Agencies and their massive holding companies are starting to realise they need not spend so much time, attention and resources on the outdated process of financial buy management. Instead they can reallocate resources towards billable, strategic endeavours. This movement started with the birth of the agency trading desks and is continuing to take hold as the role of these platforms expands beyond display and into automated buy management across multiple channels and media.
Research is another area where traditional ways of doing business are being supplanted by quicker, more efficient methods for gathering intelligence. Digital media, especially social, is a breeding ground for massive consumer insights.There are tools being created for self-service social insight aggregation, and these insights can be used to identify trends as well as test creative, etc.
Many of these tools are being developed at stand-alone companies, but I would argue that making them a piece of a larger platform would be more valuable than keeping them separate.
Media discovery, insertion order management, billing and reconciliation: these are the areas of media buying where much of the inefficiency lies. So if agencies can take advantage of those toolsets and create their own enterprise, cloud-based solutions by stitching them together, then the next few years will see a resurgence in what they are supposed to be doing: adding value through strategy, creative and co-ordination of ‘big ideas’.
To be most effective, the holding companies are going to have to centralise systems in the way the largest organisations have done. A holding company with 15 different media buying shops can no longer manage 15 different buying solutions.
That is the definition of insanity. Standardisation within agency holding companies will create efficiency over time, even if it’s painful in the short term. This is a ripe period for any technology solution that caters to agency media buying. This is the time when the foundation will be set for many years to come.
I wonder how many agency people will read this and agree with me, versus how many will argue my points. Do you see the inefficiency in the business to date?
This post was first published by MediaPost.com and is republished here with the permission of the author.