Advertising Agencies 2028--Part I

A few months ago, I was asked by two people to put up a post on the future of advertising agencies. I sent out feelers to dozens of people ranging from former agency CEO’s, current agency owners, creative talent, media directors (among other titles), Fortune 500 marketers, mid sized retailers, experienced media reps and a few media researchers. The response was rather large and I was contacted by some people whom I did not know but were eager to weigh in on the issue. So, I have sifted through a great deal of material and will time release the responses over the course of a few posts.

It has often been said that perspective requires distance. One does not read a book by rubbing it up against one’s eyes. So, I went to two old pros who have run ad agencies of various sizes outside of New York. Both maintain a lively interest regarding what is going on at agencies and in the media world. Here are their comments on advertising agencies in 2028:

Executive #1—Don by 2028… Advertising agencies will be technology specialists… Media will be mostly programmatic computer buying… Research and marketing will be done by clients in-house exclusively… Clients will handle their own social media… There will still be a need for creative work… But that will be conceptual… Execution will be handled by production companies or in-house. There won’t be near as many big agencies . Smaller agencies might proliferate and serve the needs of those clients who are too small or too young to have their own in-house capabilities. But as soon as a client gets enough scale… Everything possible comes in-house. The agencies that remain will be primarily project based… That that is not too far away from today

Executive #2—What’s next?

The world always wants to know what’s next. People make a lot of money trying to forecast and more often than not get it wrong.

Sometimes the future will be more of the same but with a very slight spin.

2028 marketing will be the same. On two fronts:

    •    Faster and cheaper
    •    Artificial Intelligence.

The smart marketers will use the evolving devices that allow them to ‘speak’ to their customers one on one. 

A smart marketer knows a product has a better chance when the benefits a customer wants are presented face to face. Me talking to you is the ideal way to make a sale.

Every day new methods evolve.

The advertising future is all the devices we have now will continue to seek the one on one connection.

Every year it gets easier and the current constant is; the techniques used in TV and radio production work. They are simply miniaturized.

Advertisers need to work on smaller, shorter and quicker. It’s not the medium it’s the technique.

The newest entry in tomorrow’s advertising communication is how fast consumers accept the fact that the selling face is not human.

AI .. Artificial intelligence is fast over taking the need for human contact but no one knows – yet – how fast the real humans will accept it.

In the next 10 years the messages will shift from exclusively selling to a balance of selling and proof of good citizenship.

Advertiser will spend large amounts trying to prove they are human and work with humans giving time and money to humans.

The future is better more targeted messaging and faster response. It’s trite but true: instant gratification takes to long.

The behemoth agencies are working to shrink while maintaining the illusion of size.  Small agencies need to do the work the big guys can’t.

Quicker, smarter, cheaper.

TV is not dying. Radio is not dying. Magazines and direct mail are not dying.  What is happening is they are evolving to even better one on one messengers.

Shifting gears, here are responses from a few current agency chiefs:

Mid-Sized agency owner—"everyone wants to talk about technology changes and they are very real. To a certain degree, we can deal with them or at least for the moment. The larger problem to me is the caliber of people whom we attract. Some 40 years ago when I entered the game, advertising often was a magnet for the best and the brightest. No more. We cannot afford to pay for the best anymore. They are all scooped up by the big companies, especially the FAANGS. If I have someone who is motivated and has a great future, they leave after 18 months or so. I cannot grow our business fast enough to keep them and they are wasted here, to be honest. Also, and this is harsh,  the people I do hire often have no class. If they go to dinner with a client without me, they get drunk. One guy was hitting on women who worked client side. He told me that I had no right to interfere with his personal life. I let him know that when he walked in to a client’s office, he represented ME. He quit soon after that —good riddance.”

"Also, there is little interest among many about what is going on in the business outside of our offices. Last year, on the first day, I outlined things for a young trainee. I told him that I would get him a free subscription to ADVERTISING AGE. He laughed and said, “Save your money, boss. I will never read it.” Can you imagine? Obviously, he did not last long but, sadly, he was not the worst of our recent crop of bad hires.” 

Small agency principal (15-20 employees)—“Our base for decades has been local retailers, car dealers and banks. Amazon and the general retail apocalypse is killing some Main Street businesses that we have had for two generations. My car dealers tell me that in 10 years they will be largely service operations with people buying direct in many cases. And the banks. Cash cows for agencies for 100 years. Now, they are disappearing as the money center banks or super-regionals gobble them up. I know our days are numbered. Last year, I ramped up my matching contribution to our 401k plan. My CFO said I was crazy but I know we do not have many more years. Some people have been with me for more than 20 years. They have not saved much and they will not have pensions. In two years, I may take some of my personal money and sweeten the 401k even more. These people made me rich and I want to help them as best I can. It has been a fun ride but the game is almost over.”

Agency owner (approximately 30 employees)—“our people do not know how to behave. When the client is talking many are on their devices and chattering among themselves. One of our senior people got defensive when a young intern at a large non-profit asked him an excellent technical question about an online effort we were doing. Our management rep asked her where she went to school. “I go to RISD (Rhode Island School of Design)”, she said. “Never heard of it”, my associate said. I jumped in and said it was probably one of the three best design schools in the U.S. He kept pushing her and she maintained her poise and cool but continued to probe. It turns out that she was the granddaughter of the founder of the non-profit and will be joining the board in a few years and may likely run it someday. We lost the business and deserved to lose it. She can bring in a team that will work cheaper and be far more cutting edge than us regarding new technologies.”

“My team does not read. I sent out articles and ask them to read them a few days before staff meetings. Some never do. They smile and say that they did not have time. Our business is in trouble. If I fire all these lightweights, I am not sure that I can upgrade the team quickly. It is so frustrating.”

Much more to come. Expect Part II in about 72 hours.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com