Lately I have been invited to give my views on the future of marketing, first as a panelist at the Google Premier Partners Awards in Dublin and today at the South Summit in Madrid. After all, as entrepreneurs we have always said that our initial idea was to create the software, but things led to founding RocketROI and it was after 4 years that we were able to embark on the adventure of creating the marketing automation technology of our dreams, today Spaceboost. 1/3 of my post-university life as a pro marketer, another 1/3 as a co-founder & CEO of a marketing agency and now as a technologist gives you a slightly transverse vision, and so I am ready to give my humble opinion on the matter. I don’t pretend to be right about everything (in fact I’m sure that’s not the case), but I do want to generate as rich a debate as possible about it.
And how do I imagine the marketing agencies of the future?
Based on data, with small spaces for creativity that allow iterations pro-optimization, transparent to the core and based on results. We are looking at marketing that is more like financial management than the creativity and commercial persuasion that some were used to. We’re going to a world full of “zeros” and “ones”, with a technology that will allow us to take Mr. Philip Kotler‘s equation (Product, Price, Placement, Promotion) to the maximum expression: reaching the perfect optimization that relates the best product, through the best impact, at the best price, to the exact audience. Where are we now? The movie has just begun, but we’ll go there later…
And I wonder, why now? I have actually been thinking about the future of agencies since 2006, when I had my first job at MPG. That’s when I realized that things were really going to change in the industry. And I’m not just talking about digital disruption (…) That’s when I really began to understand the value of data as the true communication”fuel“, and of a service that in a very short time should go through a revision to adapt to the new times. That was 13 years ago…
Where we come from, where we are
Let’s understand the story: the first real advertising agents emerged in the 18th century selling small commercial spaces in newspapers, to whom they paid a small commission for each space sold. They realized that it was easier to sell those spaces if they showed the brands the final result of how the space would look. Successively they specialized, some in looking for the medium, others in designing the text and others in dealing with customers. This was the true “germ” of today’s modern advertising agencies. In the nineteenth century with the industrial rev everything accelerated, the concept of “brands” was born to identify goods and services, the rise of communication… And the rest we already know.
So today we have, on the one hand, the so-called 360º Marketing Agencies (with more clients, they are more versatile and tend to attack end-to-end projects for the brands they work with) and the Specialized Marketing Agencies -where we go for an individual consideration- and we can find services of all kinds: market research, media agencies, below the line agencies, social networks, marketing, SEO, branding, mobile, inbound, marketing automation, persuasion… and on.
5 things that are happening right now
#1 Insourcing Agency Capabilities
Should we internalize agency services? This is the classic question that has always existed in marketing departments and brands around the world, regardless of the vertical or size of the company.
One of the justified reasons for this change is the frustration of brands with some agencies, due to their slow delivery times, lack of transparency in costs and, to a lesser extent, lack of digital knowledge, which are the skills needed to navigate today’s complicated digital marketing environment. This is happening less and less positively and the agents who provide marketing services to brands are realizing it, we are working independent agencies and as not, so have the large agencies, which are immersed in continuous processes of optimization of internal processes.
Fundamentally, outsourcing is a strategic decision that requires a careful evaluation of the level of demand, capacity, current and future capabilities, talent and investment of a company. This point may well be worth a full post… While it is true on the other hand that services such as centralized media buying offered better rates and better performance to brands, especially since the boom of the mass media in the 80s and 90s. Today this issue is a delicate issue in which the big players (the GAFA) can afford not to enter… But this is another issue.
But let’s not fool ourselves, in general terms this issue has always been on the decision table. But the real question for brands is whether internal outsourcing of marketing activities is right for them. Let me explain: on the one hand, a simple breakdown of costs will clearly show us that in many cases – especially big brands – the opportunity for savings from outsourcing can be significant. But on the other hand, in an increasingly complex, constantly changing industry, brands can risk stagnation.
Is this core business for you? Keep in-house what you need most. No? Get outside, and demand best results or nothing.
43% (2016), 77% (2017) and 53% (2018) of brands continue to rely on outsourcing their marketing services, must be taken into account. My advice whenever I am asked? Easy, ask yourself the following question: is this core business for you? Keep in-house what you need most.
No? Get outside, and demand best results or nothing.
In next posts we will analyze the following things that are happening right now in marketing agencies:
#2 Aggressive cost management
#3 Increased professional complexity
#4 Consultancies ascend on experience
#5 Escalating Technology Spending
This is a post that will be written in chapters and I still don’t know how long it will be. Stay tuned for next updates. Thanks!