A recent article on Quartz, Thanks to audit firms, Math Men are taking over Madison Avenue, points the spotlight at new entrants into the advertising business. Consultants are incurring on advertising agency territory with acquisitions of nimble creative, digital and traditional media shops. Consultancies like Deloitte and Accenture are known for their accountable, dare we say, addressable method of correlating work with business value.
What does this say about advertising’s future? Change is an unavoidable part of the equation in digital media, advertising, many industries, small business and corporate America .
The general rule is that every quarter components of the digital advertising ecosystem change. New ad units arrive. Technologies develop. Enterprise wide learnings across billions of data points are tied together to form stronger targeting capabilities. Partnerships buoy organizational deficiencies. Strategies and tactics that were relevant just months ago are in danger of becoming outdated, and at the very least require another look. New technologies pop up so often that multiple meetings with the same partner are usually warranted throughout the year if they have a track record of driving new marketplace solutions. Facebook is notorious for changing their site and their ad units so frequently that the best way to keep score is by reading trade publications devoted to the site like InsideFacebook.com.
The larger trend is that every 3-5 years a whole new sector of digital media is created. We started with search in the late 1990. Then we saw the rise of rich media in the early 2000’s during advertising’s rebound after the tragic, and subsequently market crushing, terrorist attack on September 11th, 2001. Around 2004 social media became a force. In 2007 mobile advertising started being a scalable solution. Every year since has been the “year of mobile”. Programmatic media became an unavoidable marketplace activity in 2009. Native ads are having a strong year in 2013, though arguably they’ve been a market solution all the way through since the dawn of digital advertising.
Large agency holding companies face incursion from shrinking client fees and smaller shops that are more agile. Digital media lowers barriers to entry for both technology innovation and access to greater volumes of negotiated (lower cost) media also drive competition. The upside for these advertising behemoths is their ability to attract smart people, their ongoing and deep client relationships, their onboarding of new capabilities (trading desks and data platforms are two examples) and the market perception that their tools are stronger and their pricing is lower.
The business of advertising is changing and being threatened by new forces, technologies and entrants into the market. The entities who survive will embrace innovation. The entities who thrive will leverage that innovation better than their competitors.