The future of the agency: Transformation, collaboration and innovation
During the 4A’s Strategy Festival, held in Nashville in October 2013, Warc asked a select group of leading strategists to discuss some of the shifts reshaping the agency world.
Here are excerpts from an article written by Warc Reports reporter Stephen Whiteside. Included are five interviewees: Jonny Bauer from Droga5, Yusuf Chuku from McKinney, Laura McFarlane from SapientNitro, Suzanne Powers from McCann Erickson and Derek Robson from Goodby, Silverstein & Partners.
For all the talk of a revolution in the agency sector, many major players trail their smaller, more nimble counterparts in shaking off legacy mindsets and marketing models, according to Laura McFarlane, SapientNitro’s vice president of strategy.
“From a media-buying perspective, and for a lot of the media technology, I think the agencies have been very much on top of that,” she said. “But in other aspects of what the traditional agencies are doing, I think they are lagging behind because they are still thinking that the campaign is king.”
Suzanne Powers, evp/chief strategy officer at McCann Erickson, similarly suggested the ad industry has, until recently, struggled to keep pace with developing consumer habits. “I feel like we were all lagging behind for the last couple of years. And it was scary, particularly when you have clients – large, multinational clients – who are saying to you, ‘You guys, the agency people, don’t get it. You’re just a TV shop.’ Or, ‘You’re just a this; you’re just a that,'” she said.
Even though the situation has improved significantly, small and large agencies are today facing distinctive tasks. McCann Erickson, for example, is a long-established network sitting within McCann Worldgroup, which contains a diverse array of companies, and so must “take that scale and use it to our advantage.” By contrast, younger operators such as Goodby, Silverstein & Partners and Droga5 might be comparatively modest in size, but can locate their various functions under one roof.
Jonny Bauer, Droga5’s chief strategy officer, elaborated on why client-centricity is vital. A key principle, he told Warc, relates to being media- and strategy-neutral, instead of tackling issues using preordained solutions. “We’ve had a no-one-size-fits-all approach to solving problems since inception,” he said. Agencies are learning what it is credible for them to offer brands, too. “The question is: should you be able to say you do everything, or should you be able to say you can deliver certain offerings better than anyone else?” said Bauer.
Yusuf Chuku, head of strategy services at McKinney New York, posited that the early days of the Web prompted the present, and enduring, “obsession” with delineating the “right” corporate framework. “Every time we try and keep up – or, worse still, try and predict what’s going to happen – we’re going to miss the mark,” he said. “It’s less about trying to find a new agency model…but having a mindset that accepts things are going to be continuously in flux, and that we have to create an agency structure that’s agile enough to respond to those changes.
Questioning innovation labs
Perhaps as a reflection of the growing pressure exerted by tech providers, several agencies have constructed innovation hubs to investigate new products and services. “The benefit of a lab is the observational distance that you get,” said Powers. “The danger of the lab is the rest of the community suddenly feels it’s not their job to be innovative as well.”
McCann Erickson has actually fostered “pockets” of innovation around the world on behalf of soft drink giant Coca-Cola. “That isn’t because Coke asked us to; it is because we recognized certain work styles and behaviors amongst teams,” said Powers. Of equal importance is that the client is passionate about breaking new ground. “They’re never, ever going to close the door in our face if we come back with ideas,” said Powers.
From the view of a smaller agency, Bauer summarized Droga5’s attitude toward innovation labs in three words: “Never isolate innovation.” That kind of thinking, he said, ought to be spread across every account, not just agency showcases. “Furthermore, we don’t want to innovate for innovation’s sake. The idea behind it should always be solving a business problem,” he said. “You need to create an environment that fosters lateral thinking where you’re open to whatever the right answer is.”
Expanding on this emphasis, McFarlane revealed SapientNitro runs innovation centers for customers who request them. This has been “extremely successful” for Target, the retailer, through yielding a forum for looking at the stores of the future. “It needs to be an immersive experience where we take a client or whomever through scenarios,” she said. “What you don’t want it to do is to end up being a series of gadgets or screens in a room.”
On its part, McKinney borrowed from the tech sector by letting employees commit 10% of their time to side projects. Among the offerings which emerged as a consequence are Chip It!, an online color-identification tool leveraged by paint manufacturer Sherwin-Williams, and The Last Barfighter, an arcade game developed for Big Boss Brewing Company.
The Last Barfighter
“We make stuff to solve problems for clients,” said Chuku. “As long as the stuff that we make is in response to those problems and those challenges, we’re fine. The issues come about when we make the stuff before the challenge or problem exists, and then we’re in that position of trying to sell the wrong solution, and that should never be our business.”
Predicting the future
In addressing what the future may hold, Powers referred to the “mixing and remixing” of global and local, as cultures interact in an evermore intricate fashion. “People are doing that; agencies aren’t really yet. So the agencies that can figure that out a little bit more, to me, seem really promising,” she said. “And to do that, you have to be incredibly insightful, as local as you are global, and have the agility to keep playing with that.”
For McFarlane, agencies will move upstream in assisting clients. “It’s going to be more about service design: that’s my prediction,” she said. “And that in itself is going to require serious changes in the way agencies operate. For real service design, you need deep research capabilities, but also that incredible flexibility and agility, and this idea of building upon things, evolving these capabilities and services as you see the need evolve.”
Also touching on structure, Chuku cited Nassim Nicholas Taleb’s concept of being “antifragile,” or gaining strength during periods of volatility. “Whenever we try and predict the future, it suddenly makes us quite vulnerable, because we start to buy into a narrative of how things are going to be,” he said. “I think that it’s important that we remain naïve, because that forces us to continuously question what’s happening around us, rather than having a predetermined goal.”
Chuku further stated it was essential to understand what might stay the same. Bauer confirmed this notion. As agencies are set to grow increasingly digitally-centric, certain staples should reassert themselves, albeit backed by stronger data and analytics. “I think that things are becoming very fragmented and complicated and difficult to stitch together and make sense of,” he said. “There will be a return to simple storytelling and the singularity of an idea.”