Ad agencies: No longer king of the creative hill

It’s online, in-house and multi-disciplinary—the proliferation of social channels and technology has given everyone the means to go into the business of creativity. All of which spells bad news for advertising agencies, which no longer enjoy a monopoly on creativity. Some of the best and most innovative creative ideas are now developed outside of the agency world—by in-house marketing teams, PR and media agencies, production and design firms, and technology companies.

Even consultancies appear to be showing they are a creative force to be reckoned with. In May, consulting giant McKinsey acquired design firm Lunar, setting out its ambition to broaden its creative services offering.

Not everyone might find it realistic for a consultancy to be considered creative, but most will agree that ad agencies no longer own marketing creativity. With this shifting landscape in mind, what are marketers looking for in terms of creative output that they can’t get from traditional agencies and even digital agencies?

“Users have access to so much information that breaking through the clutter to engage at a personal level is vital” —Mark Harland, General Motors

Mark Harland, marketing and customer experience director at General Motors International, Singapore, says it’s very much a case of letting the best idea win and not missing out on any opportunities. “Users [in Asia-Pacific] have access to so much information that breaking through the clutter to engage at a personal level is vital,” he says. “Marketers must create new and innovative experiences that can be enjoyed physically, documented digitally and shared socially. Very often, these ideas come from multiple sources, including our customers. The world is moving at an alarming speed so we need to have an open mind that is receptive to constant changes in the market.”

Suresh Balaji, regional head of marketing for HSBC’s retail-banking and wealth-management division, says that the linear model of ‘brief-execution-results’ has morphed into a more multi-dimensional approach, where any number of partners get together to crack the challenges facing brands.

It’s a reflection of just how far removed today’s creativity is from just making ads and the ‘big idea’. 

“Creativity could be a very cleverly thought through interface that makes interaction with an experience a thing of delight,” says Jim Moffatt, executive vice-president, Asia-Pacific, at R/GA. “It could be a smart use of data to serve up a relevant, timely and clever piece of communication, and of course it could still be a fantastic piece of communication or entertainment. The curation comes in when you try and pull some of these disparate things together.”

For brands such as Tiffany & Co, it is becoming more important to focus on storytelling and creating two-way dialogues with consumers to create more dynamic relationships.

“This means that creative ideas need to be even more consumer-focused and based on real insights—but also delivered in relevant social media ways,” says Erica Kerner, the brand’s vice-president of marketing and communications, Asia-Pacific. “This leads to a more content-curation-based model and different channel-deployment strategies.”

AD AGENCY ECD: Corporate constipation stifles agency evolution Rob Sherlock, worldwide executive director, ADK What marketers are looking for often comes down to three dynamics: speed, choice and cost. They want a 24-hour smorgasbord of possibility at an all-you-can-eat price. Ad agency networks are not changing quickly enough. They’re encumbered by deep-seated habit loops, revolving rituals, too many contracts and strangulation by procurement. They’re corporately constipated by the old adage: ‘Let’s change—you go first.’ The big new players such as Google and Facebook have market capitalisations far in excess of all the advertising agency holding companies combined. This allows for lavish experimentation leading to a failsafe ability to fail. That’s the epicentre of innovation: a freedom that agencies just don’t have. Clients want to own customers—not outsource this responsibility to ad agencies. Co-creation is in its infancy. This will accelerate in terms of sophistication and therefore agencies offering single-source creative solutions will be redefined into areas of niche specialisation. These days it’s impossible to be the repository of all ideas.

While those ideas might previously have come from the brand’s traditional agency partners, Kerner says that increasingly, they are developed from new sources like film producers, social media agencies and influencers.

And that’s not all. Creatives are moving in-house, as in the case of Uniqlo, which last year brought John C Jay, the former global creative director at Wieden + Kennedy, in-house as its president of global creative. Media owners are stepping up creatively too, with the likes of Google and Facebook having in-house creative directors and teams to help their clients directly. Google likens itself to a creative think-tank for brands and agencies.

“We’ve brought together a team of strategists, creatives and technologists,” says chief creative officer, John Merrifield. “We expose them to a steady stream of innovative new tools. We give them space to play and experiment. This enables us to collaborate with the world’s most ambitious partners to use Google’s products, platforms and technologies in new and unusual ways. Our goal is to bring fresh perspectives to the table.”

Product design is another important source of creativity with companies like Frog and Ideo having established a competitive lead in this area, while agencies such as R/GA believe that technology lies at the heart of creativity.

For PR and media agencies, which have not previously been thought of as particularly creative, the rise of branded content has given them a foothold in marketing creativity and one they are not letting go of easily. While PR agencies such as Edelman admit that they don’t as yet have access to the same lead agency parameters or production budgets as some of their more traditional competitors, they believe they now have the talent to be able to compete on a creative level.

“The ad industry is not playing to its strength currently, which is creativity” —David Mayo, Bates CHI & Partners

“We have recruited a certain type of creative director: ‘brilliant misfits’ with a proven track record but the desire to work outside the big agency/holding company model, an ability to engage and collaborate across disciplines and a recognition that a good idea can come from anywhere,” says David Brain, president and chief executive at Edelman Asia-Pacific, Middle East and Africa. 

The continued rise of crowdsourcing is also influencing how marketers approach the creative process. GM International’s Harland says crowdsourcing is changing the way the brand thinks ‘creativity’.

“Usually when we think creativity, we think internally but with an external focus,” he says. “We think about a solitary creative. But today, companies go further, faster. They must appeal to wider prospects and a global audience and the best way is to foster a giant hothouse of diverse ideas across communities worldwide.”

From a crowdsourcing perspective, GM-owned brand Chevrolet works with MOFILM, a global content creation community for aspiring filmmakers and photographers. The brand has teamed up with MOFILM to create stories depicted by its worldwide network of young filmmakers. “By collaborating with MOFILM, not only do we create and consolidate an enormous quantity of branded content, we also open up possibilities for young talents, giving them a platform to share their craft,” adds Harland.

THE CLIENT VIEW: Look beyond traditional providers for solutions Jeremy Basset, global marketing strategy director, Unilever In an always-on, connected world, creativity can come from anywhere. We think about three forms of creativity: technology, design and product. For technology, we’ve realised that startups are pioneering the future and it’s through the Unilever Foundry that we’re connecting our brands with tech startups that are fast-tracking the adoption of new marketing technologies.  When it comes to design-led creativity, we believe in the potential for crowdsourcing to provide content for social environments. By 2020, we’re looking to increase the volume of crowdsourced content to 10-times what we generate today. Similarly, our partnership with startups such as Olapic enable us to harvest user-generated content. Our ambitions for crowdsourcing and the partnerships we’re forging naturally evolve the role of our marketers from being creators to curators.  Regarding product creativity, we believe that innovative ideas can come from anywhere. We recently launched Foundry IDEAS as our platform to engage the general public around developing solutions to our sustainability challenges.

With these new stakeholders increasingly muscling into the creative space, how are traditional agencies responding?

“The [ad] industry is not playing to its strength currently, which is creativity,” says David Mayo, chief executive at Bates CHI & Partners. “They’re still thinking how they can apply their creativity to marketing communications and missing the whole opportunity around product and service design and content—spaces which are rapidly being taken up by consultancies and media companies, apart from marketers hiring their own creative talent.”

If, adds Mayo, you had to brief an agency, wait until you received a response, approve the idea or content, you would have wasted precious minutes—not just hours.

It makes sense, therefore for marketers to work with other creative sources as the pressure is on for everything to be delivered in real time, particularly on social media. Tiffany & Co’s Kerner, for example, believes that brands are now looking to work with an ever-expanding pool of providers and consultants because of the role that technology plays in consumers’ lives.

“As social media continues to grow as a marketing tool, consumers around the world are exposed to more and more global messaging, requiring brands to be consistent in their marketing, while at the same time allowing them to be absolutely locally focused and relevant when needed,” she says. 

Sunshine Farzan, vice-president, head of marketing and communications, Hong Kong, at MetLife, believes that levels of sophistication in the market are also encouraging brands to take more ownership of the creative process. 

“We are witnessing a sophistication in the market unparalleled in history. Consumers are now active on an assortment of social media platforms across a variety of mobile, tablet and wearable devices,” she says. “The arena to win their attention is highly cluttered and competitive, thus only the most creative and relevant content thrives.”

As a result, MetLife finds that a decentralised agency structure yields the highest impact, as each agency has its own subject matter expertise and distinctive strength. 

“We set the brand’s strategic direction and partner with different agencies most skilled in a specific area,” adds Farzan. “We are better positioned to own and manage the entire creative process, while synchronising elements of the integrated campaign with the agency most suitable.”

Working on a more collaborative basis will be key to how well agencies adapt to this shift in marketing creativity. Traditional agencies may no longer own marketing creativity, but brands believe they can still influence how it is all brought together.

“Though brand managers are happy to involve media owners, their content arms, internal comms teams and many others [in the creative process], lead media and creative agencies still have a big role to bring this all together,” maintains HSBC’s Balaji. “The agencies I have worked with in the recent past have been able to take a lead role in being the ‘orchestrators’ of this new multi-dimensional approach.”

GM’s Harland says that while the brand knows what its customers want, and what’s most important to them, it would be counter-intuitive to hand off the creative process. 

“We work with our agency partners to ensure a collaborative and holistic marketing approach that’s driven by the customers, through insights gained by the central marketing team,” he says. 

As to what the future holds for agencies, Neil Cotton, head of strategy at Singapore-based Liberty Networks and former regional strategy head at Ogilvy, believes there will be more deals along the lines of Ogilvy’s merger in April of Redworks with Hogarth, to create global production agency, H&O. 

“I’m unconvinced that crowdsourcing is working for producing creative work—a lot of times it’s freelance creatives that ‘win’” —Neil Cotton, Liberty Networks

“It’s all about managing costs, cross-selling skills within the agency and trying to keep as much of the pie as possible,” he says. Cotton is also sceptical about the impact crowdsourcing will have on marketing creativity. “I’m unconvinced that crowdsourcing is working for producing creative work—a lot of the times creative is crowdsourced, it’s freelance creatives that ‘win’. There are interesting things going on with clients using companies like eYeka to get feedback and ideas from consumers about areas like product development—this seems a more fertile area for the discipline.”

Bates CHI & Partners’ Mayo believes that creatives now need to become more the producers and the curators but, he says, the old guard are having a lot of trouble changing. He sees the future of big agencies moving from an “own-brand supermarket” to more of a “marketplace”.

This begs the question of what the future holds for marketing creativity and what further developments brands and agencies alike can expect in the way creative work is produced. The emphasis is likely to be on more collaboration and more experimentation between different skillsets and a growing number of stakeholders. 

According to R/GA’s Moffatt, pace and adopting a multi-faceted, flexible approach will be key.

“The future is about moving at speed, with a number of small bets that you then track and amplify as they are proving successful rather than the build up to a big ‘launch’ where all monies, and all eggs, are put in the one basket, with many fingers crossed that the whole thing works,” he says.