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Advertising Agency Challenges: How Agencies Are Evolving to Meet Needs

October 31st, 2019   ||    by Callie Wheeler

It’s easy to find a whole host of advertising agency challenges, some of which are new this year and others that agencies have been battling for the better part of a decade. But many are meeting each challenge with creative solutions, organizational evolution, and intentional change management, hoping their efforts will usher in an environment where everyone—client, channel, and agency—is happy.

The Challenge: Lack of Transparency

Digital media was once hailed the ultimate tool in a brand’s arsenal, a way to reach consumers in a hyper-targeted fashion across many devices. But transparency issues have plagued the digital ad industry, and many brands have wondered whether their investments are yielding the return they were promised.

Famously, P&G pulled spend from digital to invest it in television and other channels that provided “increased reach, but reduced waste,” as Digiday reported.

The Solution: Investing in Standards

Agencies have begun to collaborate and leverage verification tools from companies like Sizmek and AdFin, while also clarifying agency markups, media costs, and more.

Some agency professionals have even urged the industry to embrace audits, creating more transparency between brands and their advertising agencies, eMarketer reported. Others still are shifting their investments into channels with proven ROI, like audio and television.

The Challenge: New Competitors

As data is an increasingly vital component of brands’ advertising strategies, new competitors have appeared in the industry landscape. Among the most prominent: consulting firms. Consultancies like Deloitte and Accenture have established relationships with marketers and executives, expertise in data analysis, and the consulting skills agencies sometimes lack. As Ad Age noted, they’re not going away.

The Solution: Embracing Differences and Learning From the Competition

Instead of trying to play on the consultants’ field, agencies are focusing on what differentiates them: the creative execution that underpins good advertising. From buzzy Super Bowl commercials to the use of TV to legitimize “unicorn” brands, agencies know creative.

At the same time, agencies should consider what advantages consultancies have, such as existing relationships with company executives. Agencies need to be able to establish rapport with brands’ CEOs and CFOs, too.

The Challenge: Differentiators Are Turning Into Table Stakes

It’s stated all the time, but the industry is changing at a frenetic pace. What is a differentiator one day—voice marketing or a multicultural group—rapidly becomes table stakes for doing business with major brands. Agencies must constantly adapt to new technologies, cultural and political developments, and changing client expectations.

The Solution: Adapt and Evolve

Agencies are evolving, placing new faces in leadership, investing in different audiences, and prioritizing what brands value. Take 305 Worldwide, for example: the multicultural agency, a partnership between rapper Pitbull and Horizon Media, emphasizes the “polycultural” identity of America today. As Karina Dobarro, the chief strategist, shared with Forbes, the agency views it as the new mainstream.

Solving Advertising Agency Challenges

Solving these challenges likely isn’t a one-size-fits-all task, nor do the challenges always go away. Sometimes they evolve and return the next year, when a new technology is introduced or consumer preferences change. But the creative solutions agencies employ to address these challenges head on ensure they remain relevant.

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