Similar to people, agencies like to find their comfort zone and then live in them for as long as they can – until they are forced out to face the big bad world once again as hungry wolves. Heraclitus, the Greek philosopher, said that “life is flux”. In his opinion, everything is constantly shifting, and becoming something other to what it was before. “There is nothing permanent except change,” he said.
So are the forces of change friends or foes? In my view, they are what you make of them. For those of us who fail to make sense of them, they are threats. For those who are equipped to sail the winds of change, they are a golden opportunity. In my opinion, change is a good thing for the advertising industry. It is the cleansing fire that keeps advertising fresh and young, naturally culling out the weakest and challenging those at the helm to stay on top of their game.
I have yet to live in a truly golden age of advertising, yet yesterday does seem so lovely to reminisce over. Agency owners love to tell tales of the heydays. The golden days before media buying houses took over the media business, before production houses started making TVCs, before the government cut spending and before clients started to divert their traditional advertising spends into digital. And yes, before Covid-19. Now that Covid-19 has struck, agencies have three choices to deal with the changes it has brought. Do nothing, tighten your belt and eat from a constantly shrinking pie (read: dinosaur), change from being an advertising agency into something else (brave, but high risk) or diversify by looking at new offerings to delight clients and generate new revenues in the process. The last option is the strategy agencies should adopt.
Agencies handle change in a very clumsy way (in my opinion). Egos get involved, drastic decisions are taken without being thought through and unacceptable risks are incurred, although calculated risks are the lifeblood of healthy enterprises. For starters, I would strongly recommend that agencies hold on to their bread and butter mainstream businesses while seeking out new ‘specialisms’ to offer to their clients. In this way they will benefit from opportunities while managing risks.
While writing this article, I came up with a neat (read: clever) five-step tool to help agencies make sense of their diversification process. The process starts with an insight-based navigation of opportunities, going through the necessary learning process (there is always a learning process involved) and then turning into masters of their new diversified offerings. So here we go.
This is the most important step, as any success in diversifying hinges on the ability to predict the offerings for which there will be a strong demand from clients and their consumers. To succeed, agencies need to become really good predictors of demand. A good way to map out client demand is by looking at the problems that need to be solved. Client problems are blessings for agencies because they represent latent opportunities. Agencies have a variety of tools to help predict demand, including digital tools for sentiment analysis and formalised research. Keen informal observations and gut instinct also go a long way. Here are some examples of new revenue streams agencies could explore. Develop hybrid activation solutions (real plus digital experiential). Find solutions for the tourism industry (much needed!). Become masters of content marketing strategies. Kick-off your digital offering (if you haven’t done so already). Offer ways to make your clients’ brands premium ones. Help brands connect better with new consumers needs arising from Covid-19. Provide clients with risk mitigating solutions. Learn consulting. Learn how to gamify. Provide big data and AI solutions. Master mobile marketing.
Agency teams may be great, but they cannot be great at everything. Collaborating in order to combine skill sets is a better way to diversify rather than trying to develop every skill and capability in-house. Why compete when you can complement each other? Try to predict a few (but not too many) potential streams for diversification, and identify the best partners for this. Partner in order to enhance your offering and take advantage of the combined resources of more than one organisation; in this way you will mitigate the risk of diversification. Look for organisations and individuals with a proven track record in terms of the skill sets you do not have and align yourself with them – this will help build up capabilities you do not have so you can deliver diversified services. For example, you will need a data partner to deliver big data solutions to your clients. Agencies should learn to be good partners; it is not necessarily a skill they have by default. It takes a lot of effort on both sides to make partnerships work.
Put simply, prototyping means starting small before you go full throttle on your new offering. Do it before you start pitching your new offerings and commit big resources and your reputation. There will always be new learnings on new offerings; version 1.0 will almost always fail as a rule, so the challenge is to get to version 2.0 as quickly as possible. Make sure you brand the service you are offering properly and practise the pitch. If your concepts are not clear enough to sell in an elevator pitch, you are going to have a problem. Check if potential clients understand what differentiates your offering from what exists in the market.
Now that you have polished your pitch and have a grasp on your offering, pitch it effectively to the clients you have in hand (farming) as well as those you don’t yet work with (hunting). Always pitch your offering as a means to solve problems and to delight. Make the pitch exciting. Give your clients a proposition they cannot refuse.
Once you have mastered your new offerings, publicise them and before you know it, you will have created a differentiation for your agency. Grab the first mover advantage before someone else does because it is only a matter of time before it happens.
Agencies should never become mundane and ordinary. Consistency is not our KPI, the ability to inspire and excite clients and their consumers is what sets a great agency apart. Communication is fickle; the key is constantly evolving into something new, more connected, more compassionate and more meaningful than it was before.
Afzal Hussain is Chief Strategy Officer/General Manager, M&C Saatchi World Services Pakistan. email@example.com