The Ad Agency Business is Ripe for Disruption...or Death

I was going to title this piece “Why Ad Agencies are Fucked” but I don’t like when people swear in content to try and be hip.

I spent years working in the ad agency business and had a blast. Great office space with great views of the city. Fun parties. Fancy lunches and dinners. Some pretty cool benefits...in fact, one of the agencies I worked at took every employee and their families on an all expense paid vacation to Disney World….EVERY YEAR! 

Agencies generally provide great working environments with great perks. All of this is awesome...but it’s expensive and in my experience, all of those great benefits did not lead to smarter work and better results for clients. In fact, at times, it lead to the opposite. 

Agencies are filled with too much waste and too many inefficiencies. I am in awe of how many useless meetings take place. Agencies operate in a hierarchical system that is designed to create pontification, soapboxing, and ego driven decisions that play to the interests of the individuals at the agency and not the client. 

The current agency model is counter-intuitive to how the world works today and how technology, social media, and tech platforms connect and network humans anywhere in the world in an instant. I think what’s more interesting is how limited the talent pool is within any agency. If an agency has a total of six writers, the work is limited to the perspective and skill set of those six writers. Why limit thinking, ideation, and work to a small pool of employees when you can open it up to a much larger, more diverse pool of on-demand talent?

Brands are quickly adapting to the democratization of marketing, technology, and talent. It is easier than ever to add value from remote locations and with 5G technology upon us, being virtually connected is only getting easier. Today's agency model = limited resources and limited thinking, lack of perspective, longer than necessary delivery of work, expensive retainers and fees, inefficiencies, time wasted, lots of ego with less than adequate performance. Most importantly….the current model typically limits thinking to a brands marketing/media department and rarely expands strategic thinking to the entire client organization. This is one major reason why big consulting companies are successful and quickly moving into advertising agency territory. 

Platforms and services that provide cost-efficient ways to scale high-quality design, copy, insights, on-demand talent, digital media strategy and execution, social media, content creation, video production, etc. are popping up every day. 

Agency management teams need to realize that brands are much smarter marketers than they were 5-10 years ago. Brands are now progressing faster than the agency partners they work with because their agency partners financial and operating model does not align with how brands are growing their business and their internal capabilities. 

It’s time for a major disruption in the agency business. It's time for agencies to redefine the role they play as partners of brands and this means partnering beyond the marketing department. The irony with disruption is that it is too disruptive. Most agency execs can’t focus on making the impactful changes necessary because it doesn't fit into their current way of thinking or operating. It’s not hard to understand how to create an efficient and scalable agency infrastructure that delivers results for clients and profitability for the agency, but it is hard to get anyone to actually do it. 

So maybe it isn’t politically correct to say that agencies are fucked...but I don’t care about being PC. I’ll leave that part up to the agencies.