How Do Agencies Succeed in Changing Times?
I love the marketing and advertising industry. And like other industries, it appears to be in a constant state of flux. So why do some advertising agencies succeed while others fail?
In business school you’re taught the concept of competitive landscape, the notion that this landscape is dynamic and ever changing. And that competitive advantage is fickle and fleeting. Your competitors are lurking and there’s a constant threat of losing your position in the ecosystem. The companies that succeed in this environment are the ones who continuously evolve and grow. This concept has proven itself to me time and again.
I’ve worked in the advertising industry +20 years. And I believe my professional experience has many parallels with changes in the industry. I’m an accountant by trade, started my career at a privately held marketing firm, followed by many years in the holding company environment, and now am the CFO at an independent agency. Over the years, I’ve watched the industry that I love evolve into various renditions of itself.
I witnessed an industry predominately comprised of small independently owned agencies, transform via acquisitions and mergers into a handful of publicly traded holding companies. Unfortunately, these agencies have become so large and complex, they've struggled to react to client and market demands. And recently, like my career the industry has come full circle with the return of the small independent agency structure.
And still there is more change in the horizon. New players such as media giants, consultancies, and in house marketing departments have entered the space and are competing for marketing dollars. Have you ever wondered why agencies like DDB, BBDO, Ogilvy have succeeded with longevity? Why have they dominated the industry for so many years while so many others have sailed away in the night?
- These organizations understand what differentiates them from other players and are smart enough not to become complacent. They cultivate, invest in, nurture those differentiations and do not stray very far from their core capabilities. I once worked for an agency, founded in 1903, which originally specialized in tombstone print advertisement. Up until about the 1990's, tombstone advertising was a very lucrative business and the agency's client list included many large financial institutions on Wall Street. However, tombstone advertising was a dying art doomed for extinction with the prevalence of Internet technology. But when I joined the agency in 2013, it had successfully evolved to a B2B specialist with a niche in the financial sector. The +115 year old agency is a good example of the importance of nurturing and cultivating ones craft, it didn't straying from its core capabilities and continues to service many of the same financial institutions at an expanded capacity. Evolution is key.
- Standards need to be high. “If you have passion for what you do, the company you keep, the life you live, it will be reflected in whatever you create. Passion is like that; it springs out, jumps, unpredictable and unplanned, into everything we touch.” — R.D. Laing. These organizations have very high standards for the company they keep, services they provide and are passionate about the work they produce. My first Omnicom agency experience was invaluable in so many ways. Largely, because of the smart, talented, accomplished, passionate individuals that I had the pleasure to work with. Our leadership team of four, consisted of me, an Wharton MBA, NYU MBA and Oxford University graduate. No, an Ivy League degree wasn't a prerequisite for the job. However the agency employed a rigorous screening process and were very selective with hires. It was truly a special environment where each day was filled with opportunity to grow as a professional, collaborate with extremely talented colleagues and learn from super accomplished senior talent. The agency was successful in many ways, but largely for developing exemplary talent many of whom now hold senior leadership roles at various agencies across the country.
- Lastly, there is a plan. It’s too easy to lose focus, the most successful leaders and organizations stay focused on the north star. Successful agencies develop, communicate and deploy a well thought out strategic plan that is flexible and nimble enough to easily and quickly adjust. Generally, the leaders of these organizations are well liked and respected. They communicate their vision and strategy and inspire large groups of people to work towards that shared vision. There is intention behind every decision, every purchase, every hire, every client interaction.
I believe the advertising industry is at a crossroads. With recent senior leadership changes at several of the holding companies, changing client demands and structures, with a steady growth of internal marketing departments. Which agencies will prevail and succeed in this next phase?