Reimagining the Marketing Agency Model to Drive Creative Effectiveness
A study conducted by Linknow revealed that Cannes 2019 winners were only 50% as effective at long-term branding compared to five years ago. The research followed a recent report by Peter Field, claiming that the advertising industry has reached a “crisis in creative effectiveness.” Field’s study of the IPA databank showed that creatively-awarded campaigns are no more effective than non-awarded ones.
So that led me to think about what has resulted in a decline in creative effectiveness? Most studies point at short-termism as one of the main reasons for the decline in creative effectiveness. The survey conducted by Peter Field and Les Binet for IPA highlights that short-termism is killing creativity. Nearly 30% of the IPA’s Effectiveness Award-winning brand campaigns had their success measured over just a six month period.
Brand-building campaigns are more effective at gaining market share than short term sales activations. Yet we see a large percentage of brands still focused on short term success. The challenge is that most brands work in a sub-12-month window. All they see is that the short term delivers three times the ROI, and most of them never get to do the long term. Before they know, the budget gets consumed by the short term campaigns.
When brands are short-sighted in their approach, creative effectiveness suffers. Marketers have to focus on the long term to create a pull strategy, and parallelly augment it with short-term campaigns. The short investment helps you generate money, and slowly the long-term investment starts to make the short work better. That starts to create this beautiful cycle where you achieve the perfect balance between long and short.
The best breed of brands manage to do both long brand building and short sales activations really well.
From a client’s perspective, it’s a brutal world out there with businesses under increasing pressure to deliver their business goals. That has led to business results being the only real judge of the effectiveness of creative campaigns. While brands regularly monitor short term and medium-term efforts, they realize that long term brand building is critical to their existence.
So that brings us to the questions of how can the agency model evolve to drive creative effectiveness?
Marketing Agency Model & Creative Effectiveness
IPA study shows that high performers achieve more than one very large business effect, a shift in market share, pricing power, penetration growth, loyalty growth, and profitability. High performers also had set long term objectives compared to low performers. Low performers dramatically over-perform in terms of short term sales but under-perform in overall effectiveness.
Today large agency networks like WPP, Dentsu, IPG, and Publicis are trying to bring their horizontally organized businesses to serve clients better. WPP has its traditional advertising agencies like Ogilvy, Young & Rubicon, and Grey, working with specialist agencies Group M and Hill+Knowlton Strategies.
Sir Martin Sorrel is building S4 capital on a unitary structure, moving away from the traditional agency approach. S4’s model promises to deliver faster, cheaper, and better services to address the clients’ growing short-term activation needs.
Based on the intelligence gathered from Cannes and IPA creative effectiveness studies. It is clear that the new agency model has to be idea-driven, data & performance-driven, and should have a long-term focus for clients.
To further understand how the marketing agency model can evolve to deliver marketing effectiveness, we caught up with Anandan Pillai from Hash Connect. Anandan says that “Marketing as a whole would include many elements, say branding, event management, customer support, retailing, creative, media, PR, tech, etc. It would be difficult for a start-up or a mid-level agency to provide all these services. The large global agencies manage to provide these at a one-stop solution, by creating different brands within the large organization. Each brand has its own P&L, while the group company manages to provide a comprehensive solution to a client by including as many services as possible.
In the case of startup and mid-scale agencies, they should try to focus on at least three to four key aspects of services to ensure their clients can depend on them for an end-to-end campaign. For instance, at Hash Connect, we are a marketing agency that offers tech, creative, digital media, customer support, omnichannel retailing services under one roof for our clients. This way, we are able to drive marketing efficiency for an overall campaign and own it end-to-end.”
Marketing agencies have to differentiate themselves by enabling brands to stage experiences rather than just delivering services. Agency can also partner with brands to redefine customer experiences and thereby helping them to grow their revenues. Accenture’s partnership with Subway extends beyond offering creative services to reinventing experiences for end customers. But the question is, how can marketing agencies differentiate their offerings when creative services are increasingly becoming indistinguishable?
Ajeesh, a senior marketing professional, says, “There is a demand for good search marketing agencies. However, with the high commoditization of services, an excellent service offering must be packaged as a commodity. SERP Empire is an excellent example of how they have commoditized Search Marketing with the use of technology. Such products are likely to gain in the long run. Ultimately, the key is in the creative idea.”
The onus for driving creative effectiveness lies both with the marketing agency and the brand. Strong brand/agency partnerships are imperative for long-term brand building. John Lewis Partnership/Adam & Eve/DDB, Amul/Da Cunha Communication, and Nike/Wieden & Kennedy are examples of thriving, modern creative partnerships.
Conclusion
Before we conclude this discussion, it is essential to address how marketing agencies can influence brands to make long-term brand-building investments. The IPA study advocates that brands should have 60:40 split between long-term brand building and short-term activations.
But a 60:40 split looks a lot complicated in reality. As an agency, you should advocate that brands start with 50:50 split and slowly move the needle as time passes. But it is crucial to work with your clients to make sure they place those long-term bets considering that they will generate more dividends in times like these.
Sooraj Divakaran is a senior digital and content strategist. He writes about marketing on his blog Digital Uncovered.