Why Marketing Tech Innovation Is Shaking Up The Agency Landscape

A recent survey of marketers suggests that the upheaval caused by changes in technology has brands worried that their agencies aren’t doing enough to keep up with innovation.

RSW/US surveyed more than 100 senior-level brand marketers, asking them (among other questions) what they think the main problems with agencies are. Among the responses were concerns like:

• Lack of innovation
• Failure to have a strategy that delivers across platforms
• An emphasis on data without any real understanding of it

AdWeek summarized with an article titled: "Tension mounts between marketers and agencies over data, tech, and social."

There is no doubt that radical shifts in technology have changed the nature of marketing. Where there used to be a comparatively small number of channels, audiences are now wildly fragmented. What’s more, each new platform represents a new type of consumer culture.

For more on these topics, review the complete 2015 Silicon Valley Corporate Innovation Outlook from Partnered

Instagram became important in response to Facebook because it was mobile first and visual. Snapchat became important in response to Facebook and Instagram because it was fast and direct and didn’t demand that people spend time crafting a perfect image of their lives. And something will come next that is not just a technological but a sociological response to Snapchat. Each of the underlying cultures of these apps presents a learning curve to advertisers that has them feeling constantly racing to catch-up.

Brands have also been steadily increasing their resources for in-house marketing and innovation. In a study by Harris Poll and NineSigma, 81% of executives surveyed said they anticipated spending more on innovation in the coming year. 72% of execs have or were planning a dedicated innovation initiative.

For more on the changing profile of corporate innovation initiatives, watch above.

These programs run the gamut from corporate accelerators, such as those run by Wells Fargo and Barclays, to innovation product labs that acquire and build digital products such as Walmart, McDonalds, and Target, to internal researchers and relationship building initiatives like Nestlé’s Silicon Vally Innovation Outpost, who keep track of startup trends and share ideas back with the broader organization.

On the one hand, these types of initiatives can give brands a stronger sense of the opportunities of emerging tech. On the other, for agencies they can represent (rightly or wrongly) a competing advisor to decision makers that may have a different perspective on which types of technologies and which strategies are worth time and attention.

So, what happens next?

1. Agencies will differentiate on capacity to demonstrate ROI

Part of the frustration with new platform strategies is around a lack of clarity on how they drive results. Views? Great. Engagement? Okay, whatever that means. Expect agencies to break out and differentiate by doing a better job than competitors at demonstrating real changes in awareness and sales, rather than vanity metrics.

2. More consolidation through M&A to shore up digital capacities

In the same RSW/US study a full 84% of of those surveyed said that purely digital agencies were going to have to bridge to traditional functions to stay relevant. Part of that might come through ongoing M&A in the industry, where digital shops will get scooped up by larger firms to stay competitive.

3. Emphasis with integrated cross-platform strategies with expectation of experimental channels built in

Reading the brands self-identified annoyances with agencies, part of the problem seems to be a lack of strategic coherence when engaging with new channels. Agencies will get savvier about developing coherent strategies that cross platforms, and which simply have the expectation that a certain allocation of resources is going to go to channels that are more experimental. In short - an attitude shift from “shiny new thing” to “new applicant for our portfolio of solutions.”

4. Data from IoT & wearables makes everyone's heads explode

Think it’s been complicated so far? Wait until connected devices become mainstream and all of a sudden we are flooded with massive data that has implications for behavior, buying intent, and more. It will make figuring out how to experiment with Snapchat or Vine look like peanuts.

5. The boundaries of “marketing” continues to blur

When you have an app that allows people to buy goods from the comments of Instagram and Facebook is that marketing...or is it e-commerce? When you’re dealing with connected technologies that sends offers in stores, is that marketing...or retail? When you’re enabling new payment solutions through bitcoin and digital currencies is that marketing or...? Marketing’s role is going to continue to mesh more deeply with other organizational functions. The most successful brands and agencies will take the time to build explicit communication and collaboration functions between different parts of their organization.

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To read more about how startups are transforming brand marketing, watch the video below and read Partnered’s “Silicon Valley Corporate Innovation Outlook 2015”

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