In a series of exclusive Q&A interviews with Renée Ward, seven industry executives weigh-in to share their views on how traditional creative advertising agencies tackle providing technology solutions for their brands. The trend is clear. Creative agencies that relied on TV commercial creative awards to woo and satisfy brands are no longer content to watch others pick up the related technology pieces of business that help the brand further connect with its audience to grow revenues.
This trend impacts hiring needs.
Digital technology and access to big data has changed the landscape. It appears that some traditional creative advertising agencies are taking a leading role in developing technology solutions for their brands. At the same time, there are naysayers who feel these agencies are way behind the times.
A cross section of industry executives were interviewed for this piece. They are:
1. Pam Scheideler, Chief Digital Officer in Deutsch’s Los Angeles Office
2. Gina Alshuler, President and CEO Rauxa
3. Kayla Green, Director of Digital Strategy Saatchi & Saatchi LA
4. Eric Morley, President and Co-Founder Blue C
5. Matthew Morgan, Managing Director, makeminecount.com, former Head of Planning at Wunderman
6. Zachary Pardes, Founder and CEO, Agency Geek, former Director at RLM Public Relations
7. Ryan Bonifacino, Principal, Mount Cuba Capital, former CMO & SVP Digital Alex and Ani
If you have a different point of view or want to join the conversation, please comment below.
Note: Interviews were edited for contribution, length and clarity.
Renée Ward: Do you agree traditional creative advertising agencies are taking a leading role in developing technology solutions for their brands? If so, what is driving this change? If not, why not?
Gina Alshuler: Absolutely, I agree. The trend started building about five years back and many creative advertising agencies are catching up. It’s harder and harder for brands to connect with consumers without being extremely hyper relevant. At the end of the day what powers relevancy, is data and technology. Rauxa has always been rooted in data science. It’s so much of what we do. Technology allows us to further connect data to consumer needs, wants and what they want to hear from the brand.
Kayla Green: Traditional agencies are becoming more like digital agencies and at Saatchi LA, we’ve been seeing this convergence of offerings for a while now. As a result, integrated agencies – who often understand the needs of their clients and their core audiences – are perfectly positioned to support these specific challenges. It makes sense that agencies would start to offer a more non-traditional mix for their clients – it allows internal teams to learn by bringing production in–house, while creatives get to tinker, explore and experiment with new technologies as part of the ideation. Likewise, new digital services are brought to life in the creative process as a result.
Matthew Morgan: No, I don’t in general although there are a few like R/GA who have got into investing in ad tech start-ups, bring them in-house and use them to cross-sell to their clients with varying degrees of success but it definitely puts them on the front from a technology perception point of view with their clients.
What I’m seeing is brands themselves investing heavily in technology. Look at Unilever or Coca-Cola for example. They are not necessarily leap-frogging the agency but they’re just simply bringing a lot of that stuff in-house. After 15 years of working in the digital side of the creative agency world, many of the people I have worked with over time and remain connected, go client side and specifically into technology and data led roles.
Brands understand that they need to have control of their data and the technology that they invest in and use. They are still using their creative agencies as they always did–here is our product or service or offering or whatever it is, bring it to life in a creative way to change the behavior of our target audience. Traditional creative advertising agencies aren’t acutely clear that this is happening. Likewise, technology companies like Oracle and Salesforce, as well as management consulting companies like Accenture and Deloitte, all of whom are good at productizing a solution or widget to make it easy for brands to buy, are infiltrating this space. This is where the traditional creative advertising agencies really fall down because while they’re very good at selling other people’s things, that’s what they do, they’re terrible at selling their own wares.
Today, there are a whole lot of other players in the market who aren’t technically doing traditional TV advertising but they’re doing digital marketing or using data and technology to change people’s behaviors. But they just wrap it up in a completely different way and then make it easy to buy.
When you’re a client faced with a $20 million marketing budget and one guy says, I can win awards and another saying, I can shift your share of market 7.3% by using these 10 tools or pieces of technology or whatever–if I’m the client marketing guy and I’m on point with my bonus tied to my performance, I’m going to go with the second option every time. That is what the traditional creative agencies are trying to work towards, to productize their offerings. That’s good for a guy like me because that’s where I’m earning a reputation.
Eric Morley: It’s definitely yes, I agree from a tactical standpoint. But the important part to understand is, you can have all of these tactical technology executions but without a clear objective and a clear strategic direction, they’re just going to be things. The use of technology has to be integral to the brand story being told.
Pam Scheideler: Yes, it’s definitely happening here at Deutsch. One of the reasons I was elevated to my position is to grow and expand our tech and digital offerings for our brand clients. We will continue to develop new and innovative products for clients like the ecommerce platform for Taco Bell, Ta.co. We’re seeing a huge demand to expand our enterprise-level service offerings. Brands are looking to us to create deliverables outside of the traditional TV commercial. Business-changing tech ideas are happening here and it’s a growing revenue stream for us.
Ryan Bonifacino: I don’t see that at all unless they’re buying digital agencies or they’re becoming part of an agency network. What I am seeing is major creative agencies providing sort of a shared services layer within their business development efforts that allows the client to commit to digital and traditional campaigns. I’m starting to see agencies create successful partnerships with the service providers in the space– big CRM enterprise software providers required to blend everything known about a customer with behavioral data.
Zachary Pardes: Absolutely. Overall there’s a real lack of technology solutions available to the agency. Agencies are getting fed up, it’s a really difficult time. A lot of the big guys are going to be okay, your Ogilvy, your Edelman, they’re not having any issues. But, it’s the mid to small size shops that this digital revolution really hit hard, and the old school industries or agencies I should say, they really struggle to adapt. I definitely think that a light bulb has gone off, and now it’s going to be time for them to start creating solutions to help themselves.
Ward: What, if any, are the benefits of traditional creative advertising agencies taking a leading role in developing technology solutions for their brands?
Scheideler: Our Ta.co campaign which involved the complexity of launching a new ecommerce platform and feature set including the ability to customize product offerings is one example to demonstrate we are going to continue to be the innovation partner with the brands. We have significant analytic and data science capacity. This helps us drive data driven decision making. Brands will invest in differentiated experiences that show a return. Brands are starting to trust that there is an inherent benefit to letting creative agency folks get involved in key product and service development. We have healthy dialogue with our brands’ IT stakeholders.
Morley: We consider ourselves to be a black box agency. We have a talent base that can do stuff the client can’t do. It’s a strong tactical agency that strategically knows how to assure the client. We have extensive experience in all the categories and so we’ve progressed to the different levels on it, with our infusion marketing process and our brand storytelling process. Not many agencies can do that. We create the picture and we utilize technologists when appropriate to execute.I’m so lucky to being able to do this and to really help brands tell their story. The story can become fragmented if they’re not telling the same story through all channels. It will miss the mark. We’ve become advocates for the brand. Where our job is to keep the brand in line with what’s important.
For example, one of clients was in need of a re-brand. We had to scrap everything that’s been done for the last 20 years and start from scratch, scrap the old website, build a new one utilizing a lot of film, video and technology in a CMS system format where content could be developed and executed on the fly. At the same time we deployed ongoing social media content from the CES show in Las Vegas to tell the refreshed brand story, integrate it with a series of celebrity brand ambassadors while supporting our sales arm, which is our distributor site with demos real specific to the different buyers that visited the show in real time. Tying it all together were several different benchmarks along the way– media distribution benchmarks, appointments, set up of key retailers to sales commitments, binding agreements and signed contracts.
Alshuler: There’s a tremendous benefit for the brand and the consumer. The brand, ultimately, when they’re more relevant to their customer, they’re going to get happier more loyal customers. It also means a lot more for the consumer. They get an email that shows them every morning when they wake up exact content that they want to hear from a brand and nothing else. As a consumer I appreciate that, you’re not wasting my time. You’re giving me exactly what I want in the moment I want it. I’m going to give the brand something back for that. I’m going to give them my business.
A vast majority of our technology business is handled in-house; we’re a little unique in that way. We have a robust history with data sciences. We’ve always had to go figure out how to bring that human capital and intelligence into Rauxa because that’s been a point of differentiation for us. We need those folks sitting at the table with our creatives, strategists, and account folks from the beginning of a process. Technology and data is not at the end of the assembly line, it’s at the beginning for us. We have felt it mission critical to have that talent in-house and not outsource.
Pardes: There’s no better person to solve a problem than yourself. In this case, if agencies can’t find the technology they need, I think they should be investing in solutions to better themselves and to better their business, and the industry in its entirety.
Ward: How are hiring demands being impacted?
Alshuler: It’s increasingly, extremely challenging to find the magical talent of folks who understand the power of technology, whether they be backend developers or data visualization experts that don’t want to go work for one of the big platforms like Facebook or Google.
We’re at a special place when it comes to culture. We’re very unapologetic about our culture. We have a mantra—head, heart, hustle. We close our presentations talking about it. It has a lot to do with our people, it’s how we recruit. We recruit people who are smart. They dig for insights. They let data guide everything we do. We look for people who have a lot of heart to be here and care about the customer and their success more than anything. The hustle piece is the hardest piece of all because you don’t really get it until you work here. We work really hard. Finding folks who have the ability to get ahead of the trends, do excellent work and are able to hang with a really fast paced environment, that’s tricky.
Lots of agencies are struggling with this because the advertising agency has been known for talent flipping every two years. We have become extremely flexible in our hiring strategy because that’s what we have to do to attract good people and get them to stick around longer. We have growth so we have open positions to fill right now.
Morley: We take a long time to hire someone. We don’t take a long time to fire someone, if they’re not hitting their goals, and we’re right up front about that. The people that last more than a year are rewarded well and they’re part of the family here. It’s about having that A team. Marketing is not about selling products. It’s about creating emotional connections and creating tribes. As such, most of our work is done in-house. When we must go outside, we partner with likeminded companies. We create the overall story and they execute it across the board.
It takes trusting them too, where they can take a look at our brand personas, brand book, brand graphics standards manual and get it.
Scheideler: We believe very strongly that in joining the innovation cycle with our brands, especially as we are creating new brand behaviors or new user behaviors that our technologists–user experience, information architects or whatever, should be sitting very closely together. We don’t recommend extending the pipeline out very far at the very beginning. But, for example, as Taco Bell moves into phase two of maturation, using offshore resources for quality assurance has been working well for us. Because, that’s something that’s a little bit more finite where you will just define how the system should work. That’s a very natural way to use an offshore team.
Pardes: I’ve actually seen a lot of agencies whether they are advertising, PR, marketing, take on developers, web designers, and programmers. And it’s weird, because you never would expect that. We’ve never seen this in the past, but I think, like I said, there’s been an enlightenment and people realize they have to get somebody who knows technology in these doors and we want them on staff full time.
Morgan: Martin Sorrell head of WPP has spoken a lot about two great problems for him as a large network. Number one is brain drain, that he loses key talent to companies outside of traditional advertising. He sees that migration and I would imagine it’s very expensive for him. He’s still making great TV ads for Superbowl and winning Cannes Lion awards, the problem is that’s a non-scalable business and therefore that’s a major problem for him.
He’s not alone. Traditional creative agencies are scrambling globally to find people, and people with enough experience and weight to do stuff. Tech in particular is complicated stuff.
Bonifacino: Traditional creative agencies don’t have the talent in-house to develop the technologies that are being demanded. They’ll need to either create partnerships or buy companies with the talent. I’m seeing an all-time high in compensation packages for digital talent in New York and San Francisco.
Agencies have project management and client services done in a way that doesn’t overwhelm any given person. The challenge is the shifting of a budget from the Chief Information Officer (CIO) to perhaps a data driven Chief Marketing Officer (CMO). That’s happening now and these are relatively new relationships when it comes to selling technical services.
Ward: So, lastly, what’s your perspective on future trends in this area?
Green: Enterprise Resource Planning software (ERP) is essentially connecting both public and private data – and having access to this data allows agencies to truly operate in real-time. I see a future trend of applying machine learning to that data, which through automated and predictive systems, will help us identify (and in some cases predict) spikes in demand, resulting in better optimization and responses in real-time.
Morgan: It comes down to how willing traditional creative advertising agencies are to change. I don’t think the answer is startups in the ad tech space. There’s some really interesting stuff going on in artificial intelligence, the idea of using data to predict what customers–will do, will want, will buy and I think agencies who invest in that space will do very, very well. Ad agencies are starting to get it, and I reckon in five years we’ll see a very different landscape. Ad agencies will always have creativity at their center. What they need to do at the moment and are starting to do is use technology as it moves and changes to augment, modify, and make that creativity interesting.
I’ve never seen any kind of technology company move into and do well in the creative space. Creative can move into the tech space and do well; it just takes some bit of time.
Scheideler: I believe we will see more brands develop their own products and services with the creative agency as an utmost brand exercise. It brings us all the way back to the initial brand strategy and positioning. How do we talk about ourselves? How do we interact with our customers? It’s kind of like the gift that keeps on giving, because it helps the whole brand and it’s not just about a weirdo innovation project that’s happening on the side.
Alshuler: Data science is rooted in everything we do. That’s going to continue for us and it’s a really strong foundation. It allows for future growth. Brands are looking for agencies that come to them with brilliant ideas rooted in insights and data. We have that history and so we have a great opportunity in front of us.
Bonifacino: I see brands discovering what it means to take ownership of their behavioral data and going direct to vendors to get it themselves through a subscription as a service type of tool—a DMP or Data Management Platform– that allows them to acquire rights to see their data. It’s a technology to help glue the online and offline customer connection. How brands use this data in partnership with their creative agency remains to be seen.
Morley: Brand storytelling is the way to go. The creative agency is in the best position to lead the way. I go back to what the company does, how they do it, what’s important. I call this the Golden Pyramid.
Over and above everything else is, why does it matter? Why does your product matter? If you can’t explain that, you can’t tell a story. The creative solution whether or not there is a technology component will flow from the brand story.
Pardes: I see creative agencies bringing in people who can develop technologies for them. They are hiring full-time software geeks as I like to call them. They bring a whole new wealth of knowledge to the agency world. I’ve also noticed startups coming to market just like my own Agency Geek service which just launched this month. There are other people like me still in the agency world who want to break off on their own.
Solution providers will continue to develop products specifically for the Ad, PR and digital marketing agency world. That’s a relatively new thing within the past year. As such, the future for the traditional creative advertising agencies that can adapt to these changes is bright and good for the brand clients and consumers.