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Future of advertising: Agency as a platform

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Advertising is dead. Long live Advertising.
Advertising agency business model as we know it, is dead. Dwindling margins, frequent pitches, FB, Google & consultancies stealing growth from WPP, Publicis and other holding companies... The business is obviously broken.
Here's my idea to fix it.
Earlier, I had written about this idea here - https://truthaboutbranding.com/2016/12/14/the-advertising-agencies-of-future-will-be-open-sourced/
for which I won the WPP Atticus Award 2016.

Published in: Marketing
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Future of advertising: Agency as a platform

  1. 1. Ajinkya Pawar 1 Truthaboutbranding.com StrategistHello! I am Ajinkya Pawar Ajinkyapawar at gmail dot com Agency as a platform And today I am going to talk about why the marketing services business needs to change. And more importantly, how?
  2. 2. Ajinkya Pawar 2 AGENDA What forces are shaping today’s industry? What it means for marketing services agencies to become a platform. Why does it matter? Our prospects.
  3. 3. Ajinkya Pawar 3 Advertising is dead. Long live advertising. Advertising is fundamentally in crisis. FB, Google and now even consultancies stealing our lunch. Consolidated yet not integrated Best talent moving to ‘new economy’ Frequent Pitches Dwindling margins Bot-fraud Fraudulent media supply chain Suicide by overworked employee of Dentsu Japan Unhealthy obsession with awards Lack of unity either among employees or companies Life is difficult, it's a low- growth environment. Sir Martin Sorrell
  4. 4. Ajinkya Pawar 4 Advertising is dead. Long live advertising. And the global economy is not helping either. Unequal economic growth – affecting consumer spending. Uncertainty with national policies Disruption of conventional business models Shoot-in-the-foot policies like demonetization
  5. 5. Ajinkya Pawar 5 Advertising is dead. Long live advertising. Relevance of brands is diminishing. Google, amazon reviews replacing transactive memories for “favorite brands”. Voice search (Alexa) will limit brand choices. Consumers don’t want ads. Explosion of ad-blocking and on-demand ad-free content. Advertising is the tax that the poor or the technologically illiterate have to pay. Wealthy are blocking ads and choosing on- demand ad-free content. - Scott Galloway, NYU Stern prof.
  6. 6. Ajinkya Pawar 6 Advertising is dead. Long live advertising. Our efforts to adapt to the changing landscape… Cleaner media supply chain? Confident pricing for creative fees? 2-second ads? Native? Content? Relevance? …Is too little and too late.
  7. 7. Ajinkya Pawar 7 Advertising is dead. Long live advertising. Recognise that Advertising industry has already been disrupted. Advantage platforms P&G partners with Amazon directly for e-commerce. Advantage consultancies Accenture is at no.6 in the list of AdAge list of biggest advertising companies by revenue, 2016. Our value has eroded. WPP, Publicis are hot targets for acquisition right now. We are not as relevant as we used to be. We preach bold disruption to clients. Can we do it for our own businesses? We need to change fundamentally to remain relevant in 21st century.
  8. 8. Ajinkya Pawar 8 THE CHANGE AGENTS VALUE IN THE NEW AGE.
  9. 9. Ajinkya Pawar 9 Who are creating value today? PLATFORMS are. • Egalitarian access • Disruptive expansion of consumer’s ‘agency’ • Identity/ Brand • Unprecedented scalability • Ruthless efficiency • Vision attracts cheap capital and talent • Monopolistic control over market (or at least potential for)
  10. 10. Ajinkya Pawar 10 Going back to basics. What are platforms? An enabling environment/ infrastructure that, 1. Gives freedom to connect with others 2. Enables valuable exchanges which were not possible outside of the platform 3. Enables external applications on top of it, APIs Agency as platforms Hence, what can we open for outsiders? What remains proprietary? What services can others build on top of our platform? What plug-n-play will we enable?
  11. 11. Ajinkya Pawar 11 Agencies as platforms PLATFORM FORGROWTH. Personal growth Small business growth Corporate growth Not just for But also for An egalitarian access to techniques and ideas for growth for all.
  12. 12. Ajinkya Pawar 12 Why for all? The long tail of growth. 95% of enterprises across the world are small or medium enterprises (SMEs) SMEs contribution to GDP varies from 16% in low-income countries to 51% in high-income countries. Assuming they spend 10% of their revenues on marketing, we are losing 1.6% to 5.1% of GDP worth of billings. 1. SME 2. Personal brand The ambitious amongst us recognize that they need to build their ‘personal brands’. Right now, they only have gurus, self-help books to help them. Why can’t we help people build their ‘personal brand’?
  13. 13. Ajinkya Pawar 13 How do agencies stack up in the new valuation paradigm? • Limited to corporate brands, remains B2B. • No cultural currency for company brand. Access and identity • Connected together only by ownership. • For example, no synergies between Kantar and Ogilvy. Scale • We don’t help our consumer do more. Consumer’s ‘agency’ • Terribly inefficient with lack of standards and processes. • In the age of instantaneity, our campaigns can still take months to fruition. Efficiency • Dwindling margins, best talent leaving for dot coms.Capital • Not possible with current biz model – due to competing brands’ clause, scale, fragmented services etc.Monopoly Not to well.
  14. 14. Ajinkya Pawar 14 Only Publicis has attempted to review their new value with MARCEL. Marcel will be an AI assistant for Publicis employees to identify best talent from the group. It solves a smaller problem of talent management. A platform is not about solving for efficiency alone. How does a Platform for Growth look like? A bold move. Even if absolutely inadequate.
  15. 15. Ajinkya Pawar 15 OPEN SOURCE AGENCY LONG LIVE ADVERTISING.
  16. 16. Ajinkya Pawar 16 OSA What Open Source is not. 99DESIGNS.COM AND MANY MORE CROWD SOURCED OPEN MARKET FOR IDEAS FREELANCE MARKET CROWD-FUNDED OPEN TALENT ACCESS PUBLICIS MARCEL ADHACK VICTOR & SPOILS KICKSTARTER
  17. 17. Ajinkya Pawar 17 OSA OPEN SOURCE ADVERTISING AGENCY PEN: UNIVERSALLY ACCESSIBLE AND OPEN TO CONTRIBUTION O SOURCE: THE UNIQUE LOGIC THAT SOLVES CERTAIN PROBLEMS Open platform for agency certified creative professionals to provide their services from. Open access to strategy algorithms, certain datasets, case studies and talent for all (clients). Do brief, fusion, Lovemarks, springboard, BrandZ, Needscope, Adtracks, RMS, TAM, Spotlight….. Our unique algorithms (ways of solving problems) and our unique dataset (past campaigns, researches etc.)
  18. 18. Ajinkya Pawar 18 Why does our Source code matter? And we don’t own that data! Marketers and platforms do. Our value is in the intelligence and creativity that helps businesses grow. We must make our methods, datasets, learnings and ideas INTELLIGENT. Usable at scale. Able to improve itself with use. Because, Surveillance Data Is The New Gold. Research Data Solutions Media
  19. 19. Ajinkya Pawar 19 Maximizing value with ‘INTEGRATION’ Integration is not merely about “360 degree” branding or teams talking more often. It is about processes and systems working seamlessly from research to media touch-points. It means Kantar + Ogilvy + Group M as a single seamless operation – single platform. Research Data Solutions Media Think bigger. Create the truly integrated source code.
  20. 20. Ajinkya Pawar 20 So essentially… • Agency as a growth-accelerating platform • Adaptable to distinct consumer journeys of individuals, SMEs and Corporate, for all their marketing needs – from research & strategy to media touch points and every thing in between. • Our key value is in • our source code – our intelligent methodologies, frameworks, algorithms and data sets that are critical for business growth • Network effect of people (employees + community) who employ these tools at scale.
  21. 21. Ajinkya Pawar 21 The new way of advertising Open source principles and blockchain tech will be key to make this a reality. Individual SME Corporate Tiered access – Freemium model Community of certified pros On-call planners AOR/ Regular interface Community Free access to basic tools, data sets, case studies Personal Brand Guide: For a flat fee, access to algorithm to help make certain strategy decisions + access to community Small Business Booster: Flat fee + variable depending on SOW + on-call planner, time-bound access to talent Full service agency Existing mode of operation and pricing, with free value add access of all earlier tiers Algorithm,datasets,provenguidelines Research Data Solutions Media
  22. 22. Ajinkya Pawar 22 Concerns you might have • Human creativity! • Client data? • Confidentiality agreement? • Upsetting existing relationships? • Reputation risks? First, imagine the cost of not being prepared in the winner-takes-all game of platform. Second, devil’s in the detail of the business model.
  23. 23. Ajinkya Pawar 23 THE NEW BUSINESS MODEL Winner takes all.
  24. 24. Ajinkya Pawar 24 Let’s unlock it over a term sheet.  Why should you bother? 1. Market share: Winner takes all game of platform 2. Mindshare: Set the language of marketing for the future and increase marketing literacy. 3. Get bigger: Instead of depending on a few big clients, source growth from the long tail. 4. Get Nimble: to cater to most opportunities. 5. Virtuous cycle: Of aiding growth and reaping new business opportunities. Connect with me at - Ajinkyapawar at gmail dot com

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