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Cagencies: The future of creative agencies?

30 Aug 2018

Consultancies are moving into creative agencies’ turf; agencies should be thinking about going upstream as consultancies move downstream

In 2017, Accenture Interactive spent over US$1 billion buying up companies in the digital marketing space. Just last month, the consulting and technology giant snapped up Shanghai-based digital marketing agency HO Communication, underlining the trend of management consultancies moving into the digital marketing space with Deloitte and McKinsey also muscling in.

“The likes of Deloitte and Accenture have been hiring our staff,” points out Joshua Lee, Managing Partner at Tribal Worldwide, which is part of global advertising agency DDB. “These consultancies are talking to the CEOs while we as agencies talk to the CMOs [Chief Marketing Officer]. We see consultancies encroaching into our space, and they think they can do end-to-end solutions just like us instead of doing strategy. That has made us reconsider: Are we actually consultants?

“We are already doing some of the things they do, which is strategic thinking. The main difference is the consultancies have access to the CEO but we don’t.”

Speaking to Perspectives@SMU ahead of the recent Digital:works 2018 organised by SMU’s Centre for Marketing Excellence, Lee points out what agencies need to do in a rapidly consolidating industry.

“Agencies reinventing themselves need to think about going upstream while consultancies come downstream. However, consultancies coming downstream requires a different skillset whereas the agencies are already doing the strategic bit.

“Agencies need to reinvent ourselves to demonstrate the breadth of work we can do, and then go upstream and show we can deliver that end-to-end. Right now, agencies are comfortable being in our own space but consultancies are coming into our space. But it is easier for us to go into their space than it is for them to come in to ours.”

Show me the money

Where marketing and advertising agencies continue to demonstrate superiority, Lee says, are in creativity and emotional story-telling – something that machine learning and technology cannot replicate. Tribal’s kungfu-inspired TV commercials for the Ministry of Communications and Information (MCI) of Singapore’s anti-diabetes drive, among their other ads in the food and beverage and consumer goods industries, offer evidence of that claim.

But can smaller companies without the budgets of MNCs produce something like that?

“Beyond the budget, the first one was done during Chinese New Year so it made sense for that ad to be on television,” Lees says, referring to the MCI ads and highlighting the issue of context. “On that note, it has nothing to do with budget. I’ve done deliverables and campaigns on a modest budget which have done very well.

“A few years ago TV [as a format] was going down and print was going up. Television aside, with everything now going digital and becoming cheaper to produce, suddenly everyone’s doing video content and print’s gone down.”

With 5G almost becoming a reality and offering download speeds of up to reportedly 1,000 times faster than 4G networks, Lee lists virtual reality (VR) and augmented reality (AR) as possible avenues of exploration for digital marketers, as well as live video marketing. And while a popular campaign or piece of content can go viral, it has to meet business objectives: making money.

“Views and likes are like hygiene, it’s a given,” Lee explains. “But at the end of the day what do they mean for me? For the public sector it’s more about behaviourial change. That’s a bit harder because you’re trying to nudge or change behaviour.

“But if you focus on commercial clients and brands, it links back to sales. The question will then be: Have all these millions of likes and retweets converted into sales? If so, then all this first-click and last-click metrics count for something. If a campaign goes viral, that’s great but has it translated to sales?”

Social media fatigue

‘Going viral’ became part of popular culture because of social media’s hyper-connectivity. But with YouTube’s co-founder Chad Hurley warning of social media fatigue, should businesses and digital marketing agencies be re-thinking their social media strategy?

“Millennials now look at Facebook as something their parents do, and that’s the insight i.e. I don’t want to be where my parents are! So they go on Instagram,” Lee says. “Whether you like it or not, the biggest demographic is still late-20s to 40s which has the largest disposable income.

“The millennials are the customers of tomorrow who may not have the spending power right now but you need to make money now. Facebook is not quite old and passé as far as businesses are concerned. We have look at it in terms of the customer experience and who you’re targeting, and that determines the medium and media.”


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Last updated on 30 Aug 2018 .


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