Are agencies equipped to deal with digital transformation?
Agencies will find it hard to stay relevant if they don’t speed up their own understanding and adoption of digital technology.
I was having a conversation with a group of young college students recently about the evolution of the internet and one of them asked me, “What’s AOL?” Not only did that make me feel ancient, but it also hammered home the truly rapid growth of digital, and how much the industry has changed.
As I specialise in helping brands optimise digital campaigns, it’s perhaps no surprise this transformation resonates with me. But in both my professional and personal life, I have witnessed the power of digital in terms of acquisition and engagement, and watched its speedy evolution. Call me biased, but digital is no longer just a group of channels; it’s a way of life. ‘Everything’ is digital: the shows we binge watch, our bank accounts, our favourite stores, and even sharing time with family and friends – it has embedded itself in our culture, and is shaping consumer behaviour.
For agency marketers, the development of digital can be hard to keep a handle on, with a disruptor becoming a dinosaur in the blink of an eye. Where once AOL was a household name, TikTok and the metaverse now dominate discussions. The advertising industry may position itself as fast-paced and forward-thinking, but I would argue that some media agencies are stuck with archaic processes that are actually holding them back.
If we delve deeper into digital’s meteoric rise, and examine the challenges agencies are currently facing when it comes to innovation, it’s clear that if they don’t keep up with emerging trends, agencies are in danger of becoming obsolete.
Agencies need to come to terms with digital in all its forms
If you’re looking for an example of the pace of digital change, you only need to look at TikTok. With over one billion monthly active users (MAUs) worldwide, compared to just 508 million MAUs in December 2019, TikTok is now one of the largest social platforms globally.
Although TikTok was established in 2016, the pandemic heralded the app’s huge growth. In the first quarter of 2020 alone, it saw over 315 million global downloads, the highest number of app installs for that period. Arguably, Meta, which was launched in 2004 and has 2.9 billion MAUs across all its apps — Instagram, Facebook, WhatsApp and Facebook Messenger — has unwittingly become a ‘traditional’ brand in comparison.
Indeed, TikTok’s shorter video format has so disrupted the social media status quo that Meta took inspiration from the younger platform for its ‘Reels’ feature. This highlights how quickly digital brands can grow and become relevant in today’s digital-first world.
Another example of digital transformation is the metaverse; currently dominating industry conversations. Still in very nascent stages, brands are already starting to file trademarks that will allow them to sell in virtual spaces. Moreover, companies such as Balenciaga have already begun to advertise on this emerging channel through partnerships with game providers.
How much time do we have to fully get to grips with the shift to web 3.0? And how are agencies adapting to help their clients truly leverage new platforms and spaces to connect with their consumers?
While there is still a place for traditional media such as linear TV and radio, agencies may lose valuable clientele if they don’t fully digitise. Tapping into popular online channels will enable agencies to better inform clients where their target audiences are and learn the key features and techniques through which to reach them on these platforms.
Agencies need to unlock time and resources
The need for innovation also applies to agencies’ everyday processes.
Marketing, at its core, is about creativity. Imagination is key to crafting new ideas and communicating them effectively to fulfil a brand’s vision. But some agencies have lost sight of this fundamental aspect of our industry. They are often too corporate, with organisations that are too large to achieve the agility necessary to generate exciting new products and concepts.
For many agencies, there’s also a technological process issue. Agencies are often strapped for time, with overworked employees carrying out manual tasks that could be made easier or replaced by smart tools. But many agencies can’t afford the investment in the technology overhaul needed to improve these processes and unlock necessary time for workforce innovation.
In contrast, the ad tech industry is moving much more rapidly, offering brands viable solutions to targeting and measurement challenges; which is affecting agency perception. There were 90 mergers and acquisitions in ad tech globally last year, compared to just 30 the year before – highlighting the growth and fast pace of change in the sector to meet the demand for the latest tech. Agencies will find it hard to stay relevant if they don’t speed up their own understanding and adoption of digital technology to keep pace with the wider industry.
With digital now a way of life, agencies need to embrace both new platforms and technologies, and make sure they are properly equipped to guide their clients through this rapidly evolving landscape. If they don’t, they’ll get left behind.
Lauren Ogundeko is chief digital officer and co-founder of Bicycle London, an independent media agency.