Cannes Post-Script: Is The Creative Agency Becoming A Point Solution?

creative-cannes-featureOnce upon a time, ad agencies were masters of data. Which is to say, research.

Before the internet, firms like Leo Burnett and The Martin Agency wielded – and still wield – sizeable research budgets, which they used to uncover demographic opportunities and strategic consumer insights. These insights were turned into big ideas and placed at the heart of ad campaigns. For a big CPG marketer worried about how to deal with shifting consumer tastes or new technology, the first call often went to the creative agency partner.

No longer.

As big data has reduced the stature of the creative agency, the big idea has yielded ground to the “always-on” campaign. As a result, the creative “services layer” now finds itself at risk of being supplanted as the crucial marketing partner to large brands. Who is doing the supplanting? The list includes consulting firms (McKinsey, IBM, Accenture), enterprise software stacks (Adobe, Google, Oracle,, digital agencies (SapientNitro, AKQA) and media agencies.

AdExchanger recently explored this trend in more than a dozen interviews at the Cannes Lions festival. The good news for creative agencies is that no one thinks they will disappear. The bad news: They could be demoted from the hub of a client’s marketing strategy to a spoke.

March Of ‘The McKinseys’

“Frankly, I get scared about the McKinseys,” says Gareth Kay, chief strategy officer at creative agency Goodby Silverstein and Partners.

Goodby is a great example of a respected creative agency that’s seeking ways to reinvent with the rise of big data. Kay says the consultants and the media agencies are gaining the ear of clients by making sense of data and media fragmentation.

“They’re doing a much better job than creative agencies at helping clients navigate a more complex landscape and understanding how technology and media can interact,” Kay says. But, he adds, “I still feel that when the crunch comes, that phone call goes into the creative shop more often than not.”

None of the consulting firms reaching out to CMOs today – McKinsey, Accenture, Deloitte  – are buying media yet.  Their focus today is on helping clients choose and integrate enterprise software systems.

“But they’re beginning to sniff around it,” says Kay. “Whether they’re going to be good at what to do with it, making meaningful stuff happen as a result, I’m not so sure.”

According to Matt Britton, CEO of Publicis agency MRY, “CMOs are looking for people who can create business strategy – who can translate their brand into a consumer-need state and build content around that. Creative agencies are investing in creative talent, but not necessarily talent that can sit across the table from the CMO and have a tough discussion.”

Britton says clients are starting to lean more toward the consultants, along with digital and media agencies. He says of the consultants, “They are strategic. They understand data, they understand systems.”

Like some other creative agencies (AKQA, R/GA), Goodby does offer media strategy, and clients like Adobe have used it for “the full buy,” but such campaigns are rare. Media agencies still control the vast majority of media spend, thanks to the bulk-buying efficiencies and negotiating leverage clients can realize through them. That spending clout, combined with client confusion about media strategy, has played to the advantage of media agencies. Many of those firms are even staffing up small creative and content departments of their own.

“I know the financial reasons, but it’s crazy that we as an industry spun those units off. It was greed. It was absolute greed, and it may come back to bite us at some point,” Kay says.

Creative Automation

On the other hand, no one believes a McKinsey or a Mindshare will replace a creative-agency relationship on its own.

Brad Rencher, who leads Adobe’s digital marketing business unit, says, “What’s driving change in marketing and advertising is data, but we don’t believe that data is going to replace creativity ever. A highly targeted message that’s poor will be outperformed by a great creative message with no targeting.”

Rencher adds, “Today we’re hindered by a lack of creative, or the creative we need. We’re awash in data.”

Which begs the question: If the automation of creativity is still science fiction, what’s preventing creative agencies from capturing digital opportunity today? Put another way, why is digital-ad creativity so often seen as a wasteland? Part of the answer has to do with the economics of digital ads.

Rich Guest, president of US operations at Tribal Worldwide, says advanced segmentation in digital media is working against the creative agency business model. “I can’t afford to produce 100 ad units when my agency is charging me $150 an hour to code Flash. Even if I’m going to offshore it and it costs $50 an hour, it’s still too expensive.”

Guest says creative agencies have made some headway in leveraging data to enhance creative executions. “It’s finally efficient to produce enough creative assets that if I know you live in NYC and you typically buy unbranded pain reliever, I can deliver a message that convinces you to buy Advil.”

Dynamic creative optimization tools have helped. Firms like Dapper, Teracent and Tumri made waves three or four years ago but have received little buzz lately. That’s not because they don’t work, says Guest.

“The ad tech that’s been most relevant to us are the Teracents,” he says. “It’s changed our business in that we don’t have as many Flash developers. But we have more copywriters, more art directors, more creative strategists — those people that are bringing thinking to clients that solve problems.”

Guest doesn’t think creative agencies have squandered the big data opportunity.

“PR, digital, creative, media agencies all have a role in social. The idea of social is big enough that there’s role for each of these agencies to play. Data is going to be the same way,” he says. “Creative agencies have always had a role in data, it’s just that there’s so much more of it and they get intimidated. We have to get over our fear of massive amounts of data.”

Digital Agencies Go For Data

Some digital agencies appear poised to capture data to monitor “brand health” and build consumer experiences.

Organic, among the first digital agencies, offers something called a Connection Index, which takes 15 or more metrics and boils them down into a single score that is unique to a brand and is meant to act as a surrogate for that brand’s success.

“One number to rule them all” is how Chief Creative Officer David Bryant (formerly of Google Creative Lab) describes it. For one CPG client, Organic’s Connection Index was used to determine that coupon redemptions, a key performance indicator, were down despite an overall rise in traffic, especially traffic from mobile devices. Using that data, the agency was able to optimize mobile traffic to drive to the coupon-redemption area of the site.

“You move from the discussion about optimizing a message to optimizing the experience,” says Organic CEO David Shulman.

Other creative-centric digital agencies — R/GA, AKQA and SapientNitro – also are striving to capture more data in the ideation process, though each takes its own approach.

Mobile and Native

Putting more hurt on creative agencies is the consumer shift to mobile and social. These factors have led to the rise of content marketing, native advertising and reaching consumers through “in-stream” placements on their smaller, more intimate screens. “Right-hand side” ads have never gotten less respect.

The recent gold standard for this type of campaign is “Oreo Daily Twist,” a social-centered campaign created by DraftFCB that featured a new piece of content every day for 100 days.

Oreos aside, creative agencies by and large aren’t interested in this kind of work, says Goodby’s Kay. “It’s a lot of blood sweat and tears around small things. There’ll be a need for a new type of creative talent to come in. The factory we’ve built, the scale and muscle we’ve built, are going to have to change so dramatically.”

This problem was highlighted when, during the Cannes Lions press conference announcing winners of the festival’s first mobile awards, a debate broke out about why so few of the winning campaign ideas involved paid ads.

It’s hard for creatives to think small, although many are trying. Video may offer a path forward here.

“Yes, there is a role for a three-second video, a six-second video,” says Tribal’s Guest. “There’s also situations in certain parts of the world where people watch a 20-minute video on their phone.”

Might creative agencies be relegated to TV and video work – to being essentially an ad-industry refuge for “film” talent? That’s where the Cannes Lions got started, after all. And it’s not a small opportunity. But it’s not the Big Opportunity either.

Business Models

But even with some improvement in the agency overhead for digital campaigns — thanks to “the Teracents” — clients aren’t prepared to pay for 1,000 hyper-segmented, digital-creative executions, not in the way agencies are used to billing for them.

“We’re still stuck in that bizarre, archaic model of ‘time-plus.’ It becomes economically ridiculous for a client,” says Goodby’s Kay. “I’m a big believer that we should charge for outcome rather than output … That frees you up to do the thing that’s right for the client and staff appropriately to do that stuff.”

But staffing appropriately is one of the larger challenges for an agency, as MRY”s Britton points out.

“The creative-agency model is predicated on people, not data, methodology or technology,” Britton says. “People walk out the door. It’s hard to build a business model based on people.”

The classic example here is Crispin Porter + Bogusky, which became red-hot within the space of a few years largely on the creative vision of one employee. Then that employee left.

There are no superstars in the data and media sphere – not on the level of an Alex Bogusky – although there are talent wars.

“The tools are so critical to how brands operationalize their marketing. There’s only a finite amount of talent that understands it,” Britton says. “But it can be taught. Creativity can’t be taught.”

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