Farewell to the term “Advertising agency”

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Professor Bálint Nagy, Head of the Department of Marketing, on the future of advertising agencies

Many signs show that advertising experts have actually become advertising engineers who analyse massive amounts of data and their major aim is to project the prospected visits of a site. Advertising agency as the institutionalized form of marketing communication seemed to have been canonized since the second half of the 20th century, however its role and structure are constantly changing. The only permanent element seemed to be the name itself, by today this does not seem to be true either.

Digital revolution has shaken the traditional structures of how to address masses of people. The number of mediums and the number of targeted people have exploded; there is also a revolutionary change in the ways in which people use communication channels. A similar kind of revolutionary explosion is needed in marketing and how marketing companies are structured and do their work. So far, however, there are more questions than answers.

One such question concerns a major pillar of traditional agency structure, the creative function. According to a recent article of Advertising Age, creative directors, as we know them today, do not really have a future, the function itself might be unknown within ten years. Being creative is the job of each and every person working for a company, they say. Others argue for a rethinking and reshaping of the creative function itself and to include storytelling specialists, technological specialists, among others.

Meanwhile, with the growing number of creative competitions and awards, advertising agencies inadvertently inflated themselves. It is also frequently disputed if a creative product should be brand-focused or medium-focused. Couple of years ago, it was obvious that a creative concept should be consistently followed in each medium. By today, however, it is widely accepted that the creative interpretation of a message should rather focus on the medium than on the brand, the consumer-insight depends as much on understanding the habits of medium usage than brand usage. This also would mean that the role of media agencies should grow in opposition to advertising agencies. This can be disputed but it would be hard to argue that new functions require new skills and even new terms in advertising.

It is also a new trend to “go project by project.” As the head of Mondelez says, “… digital has created thousands of new mediums so it is just not possible for one agency to be expert in all these areas.” This is the end of the traditional long-term agency-brand relation. As the head of Frito–Lay puts it, “The way we look at it is: Who is the best-suited for what we are trying to do with the consumer message?” There are opposing trends as well, including returning to the core-agency system, or directing agency work back to the company. Some companies took over an earlier, clearly creative function, that of the chief storyteller.

With these major transformations of the activity of advertising agencies, isn’t it time to say farewell to the term itself? Why should we still call them agencies when they actually work and think as companies? As a major US digital communication company puts it, “Today, the agency prefers to be called a company for the connected age.”

Read the full article here in Hungarian >>