Consultancies are making huge gains in the advertising space by trumpeting their data analytic expertise. But there is no reason agencies can’t utilize market data.
Ad Age recently ran a feature on consultancies taking business from ad agencies.
“For the first time ever, four consultancies have cracked Ad Age's ranking of the 10 largest agency companies in the world. With combined revenue of $13.2 billion, the marketing services units of Accenture, PwC, IBM and Deloitte sit just below WPP, Omnicom, Publicis Groupe, Interpublic and Dentsu.”
Clients are swayed by consultants putting themselves across as more data savvy - better able to analyse the wealth of consumer information suddenly available via billions and billions of digital devices.
This move of consultancies going into the advertising space is just another example of a wider trend.
The digital age has been all about the blurring of lines. Work and leisure, one industry to another, consumers and producers - the boundaries between all of these are no longer clear cut.
Most of us carry around smartphones and answer work emails at home, on the train or during dinner. Millions of employees work remotely or in co-working spaces. Practically every company (and, for that matter, governments) act as publishers now, cutting out the middlemen and addressing their customers directly. In dozens of industries, consumers expect interaction, responsiveness, even co-production options from businesses.
Digital companies - particularly mobile focused ones - often talk about disrupting markets and bringing them up to date. Uber disrupted taxis. AirBnB disrupted hospitality. The importance of the app economy remains a mystery to massive pharmaceutical companies.
Startups come along and update a tired old industry with fresh ideas and new, data driven tools. Hopefully, that means customers end up with better products and services than the ones they had before.
But when every industry is vulnerable to disruption, customers don’t quite know who to trust.In advertising, they’ve started to turn to consultancies because they feel that data is incredibly important - somehow - and aren’t convinced their old agencies can handle it.
(I know you can feel the “but...” coming, so here it is.)
But... data doesn’t solve all your problems.
That might seem strange to read from a data company. But it’s true.
Data is a tool. An extremely powerful tool. It can be used for many things, from improving your pitches to setting benchmarks based on your competitors. Every industry can benefit from it and anybody who isn’t integrating it into their business model is likely to lose.
It still doesn’t solve all your problems.
Writing for The Drum, Joe Parris, Creative Content Officer at The Variable, put it nicely:
“Data is the new black. It is here to stay in advertising and marketing. In the right hands, it can be used to enhance strategy and creative and delivery and effectiveness. But it isn’t a replacement for those things.”
The playbook of ad agencies in the digital marketplace has been to leverage data as a quick fix. Need more views? Cram the copy with as many keywords as possible. Need more clicks? Make the ads pop out and hide the close button. Look at those numbers going up!
Chasing clicks has undermined agencies’ reputation, thereby opening the way to consultancies in the digital advertising space. That is a bad outcome. But there is a worse one over the longer term - users will turn off ads en masse.
The backlash to online ads
Relying on data alone has led to major problems in digital advertising. By chasing page views and clicks, publishers have often found themselves pushing subpar content. Annoying ads, clickbait, pages loading slowly because of all the trackers they’re using. People don’t want any of that.
And remember, ‘publishers’ doesn’t just mean the New York Times anymore. It means just about every company on the planet.
All this irritation has led to an explosion in ad blocking. It is one of the few things that unites Millennials and Baby Boomers: the former find ads annoying and the latter find them creepy. On mobiles and on desktops, more and more people are blocking ads.
This is an example of users punishing providers because what they are being given isn’t providing any value. It is powerful feedback that indicates something has to change.
Maybe soon, the message will get even stronger. TechCrunch recently reported that Google are seriously considering building an opt-out ad blocker into Chrome - a browser that is used by 1 in 2 internet users.
Google are the biggest online advertiser in the world. They wouldn’t be introducing an ad blocker if so many users weren’t furious about the status quo.
Focusing on the long term
Ad agencies work in a market that is both dominated and undermined by consumer data.
Right now, customers are leaning towards data specialist consultancies. But consultancies do not own competence with data. There is nothing about those companies that makes them particular experts in the mobile markets - they’re learning as they go along, just like everybody else.
Collecting, cleaning and analyzing data are tasks that are more accessible than ever.
The trick is to think about data holistically. The short-term outlook focuses on transactional uses for data - hammering away at users to increase CTRs - but how does that contribute to long term growth? How can it help companies produce campaigns that influence consumer behaviour beyond one interaction or purchase?
Answering those kinds of questions should be the wheelhouse of agencies.
In the mobile market, probably the most interesting use for data is to understand user behaviour as they interact with apps over and over, sometimes for years at a time. (Let’s not forget how new a phenomenon this all is - the App Store only launched in 2008). Nobody has a secret formula. The only real ‘trick’ is to get access to the data, find which users matter to you and then take aim at the biggest puzzles you can find.
The bottom line is that data should be something that empowers agencies to produce better work. Not something that helps drive more clicks.
If agencies do that, consultancies will no longer have a fast track into their business.