Defining the ‘Agency of the Future’

Marlet Salazar
October 1, 2018

The advertising sector is just one of the many industries significantly affected by the digital disruption. Online marketing, e-commerce, and the power that social media proved too strong to fend off. The battlefield has become a pivot or perish or evolve or die combat zone.

Some agencies had the vision to pivot early on the disruption when digital was a young – and yet promising – platform. But for some that are a bit late in the game, there might be a lot of catching up to do but there is still time. However, they have to do it fast.

In today’s fast-paced environment, “agency of the future” is already an antiquated concept. Successful agencies have started their evolution a long time ago and established and captured clients even before brands realized that they also needed to evolve.

In the joint event attended by members of the Associated of Accredited Advertising Agencies Philippines (4As), Internet and Mobile Marketing Association (IMMAP), Media Specialists Association of the Philippines (MSAP), and the Philippine Association of National Advertisers (PANA), the experts and thought leaders acknowledged the need to address the challenges head-on as an industry.

Technological disruption and social media are not the only challenges that prompted agencies to transform but also the competition that the Philippines’ Asian neighbors are showing. The country does not lack the talent but there may be important skill sets that agencies might be lacking such as the ability to utilize analytics to create a more effective – and targeted – brand campaign.

Technology partners

How do automation, data science, and machine learning affect the agency’s present and future?

Publicis is one of the agencies that many acknowledged disrupted the industry. It consolidated agency networks that include Leo Burnett, Publicis, Publicis One, and Sachi into “one powerful model.” It is joined by DDB and Ogilvy & Mather, among others.

“The model for Publicis One is about putting the clients at the center of everything,” said Raymond Arrastia, CEO of Publicis One. “It is using the old resources you have within the country in order to deliver essentially the skills and disciplines that are needed by the client. Our agency model is a way of working, which allows us to bring specialization and integration in terms of services for our clients.”

Havas Media is already in its transformation Version 3 and by now is maximizing data science and analytics in delivering targeted campaigns.

“We took a bet when everybody was still under specialist mode and it’s paying off,” said Jos Ortega of Havas Ortega.

He explained how integration helped the agency to win clients. However, this also means “going deeper” for each service, which means they have to go the specialist mode again. They started from being specialists to being an integrated agency and now that the purchasing landscape has evolved, they have adopted the hybrid model.

“It’s a little bit confusing but you kind of figure it out,” he said.

Integration is collaboration

IMMAP founder Donald Lim is now the CEO of Dentsu Aegis Network Group and he oversees the performance of seven agencies.

He recognizes the fact they the agencies compete with each other but there are instances that they are “forced to collaborate.”

“What I like about the (business) model of (integration) is that in the end, the customer remains to be the driving force,” he said. “In terms of delivering for the customer, it’s a very interesting setup. We are liking it also because we are forcing them to collaborate because you cannot allow one of your agencies to fail.”

The unification of agencies into one umbrella company is forced by digital transformation and the threats of technology companies such as Facebook and Google, which allows mobile and digital advertising to soar. It is believed that collaboration with tech partners will be vital to the agencies’ future success.

Jeff Saez’s NuWorks Interactive Lab is described as a “digital-first agency” that provides digital transformation solutions to clients utilizing creativity, data, and technology. He believes, though, that with all the techie talks on AI and machine learning, the country is still in the learning mode and this is an opportunity to explore the possibilities.

“No one has really dominated the industry so it’s a good opportunity for everybody,” he said.

Carlo Ople, VP of Digital Acceleration at PLDT and Smart agrees that there are so many opportunities for everybody in the digital space. He pointed out the emergence of consulting agencies that many feel might be threatening the agencies’ revenue.

“The reality is if you follow where the money is, if you go to the extreme side of digital, that’s where the money is going,” he said. “It’s no longer going to the ad agencies, media agencies. It’s going to the consulting companies.”

“If you think about it, on a very extreme level, creativity and strategy is some kind of commoditized already because of marketing technology,” he said. “Because there’s that layer of marketing technology that allows you to do so many things now such as automation, which makes creation so much faster than before.”

Ople explained that if agencies are determined to move forward, it is vital for them to build on top of the marketing technology layer maximizing creativity and strategy. He mentioned for instance agencies that are forging partnerships with sales force because of partnerships can bring in the money based on relationships.

“That can be a potential differentiator moving forward in terms of the extreme side of transformation,” he said.

Creativity

Amid all the opposing perspectives on whether integration is the path agencies should tread now, they all agreed, however, that at the heart of the advertising business is creativity.

Everyone agreed when Arrastia said that creativity is always going to be at the core of any of the discussions.

However, neighboring Southeast Asian countries are a step ahead of the Philippines in terms of creativity.

Paolo Mercado, SVP for Marketing, Communication and Innovation at Nestle Philippines noted how Vietnam is now the app development center in the region just years after surviving a war.

“Creativity is paramount but when you talk about creativity, the Philippines isn’t the only creative country and brands will source where the creativity is produced.”

“The Philippines is not yet ready to produce the quality of Thailand and Malaysia,” pointed out Angel Guerrero, president and editor in chief of Adobo Magazine and who also served as the moderator of the discussion. “We have to step that up.”

Lim summed up how the ever-changing landscape brought about not only of digitalization but also of Asean integration, “will force us to change.”

“You have to look at it from different perspectives,” he said. “Creativity is subjective. How do you put an evaluation to that unless you win an award?”

He encouraged industry heads and thought leaders to work together for the Philippine marketing organizations to become globally competitive.

“We have to take a step back and look at how do we really grow as an industry? How do we make sure that the Filipino creative is valued? The wheels are turning. Those are the realities and all of us have to survive. In order for all of us to survive and be better, I think we need to take a step back and look at how can we really grow this ecosystem.”

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