Advertising agencies of the future

It just seems that many industries are in crises. Not only financially, but also strategically. Therefore, I was intrigued by a report recently released by FutureLab. In 'Reconsidering the Advertising Industry', the authors describe the bad state the sector is in. Clients feel like hostages; they keep buying but are dissatisfied. One striking similarity with the finance sector is that of the 50 largest advertisers in the world 91% consider the media buying process to be insufficiently transparent. And 85% are convinced that their media agency had deals outside the client agreement that gave advantages to the agency without passing them on to clients. Reads like the same trouble intermediaries face in the finance sector.

The report illustrates seven of these shortcoming, e.g. the need of customers to walk digital instead of only talking digital. As a result of these, many of the large agencies are 'out of sync' with their client needs according to the report. There is little differentiation between the large advertising 'factories', everyone does the same while the market needs multidisciplinary boutiques. As an answer twelve remedies are proposed to set things right. Among other things, the report suggests a move from budget driven projects towards revenue generating projects and support clients in their financial model of marketing. As a strategic perspective the report provides ten agency models of the future. While there still might be a need for some large 'factories', there are other possibilities like 'the customer specialist' agencies that really understand everything about a certain type of customers.

The report makes clear that clients change, the customers of the clients change and thus the sector has no alternative than to change as well.