Ad Industry Value: Up or Down?

In one of her latest post on the Forrester Blog for Agencies Mary Beth Kemp (who spoke at  marketing2.0 Conference by the way...) is trying to better analyse the evolution of the advertising industry. She says that "The ad industry has lost its spark. " and is wondering "why and how did that move from partner to vendor happen? And more importantly, what can agencies do to move the dial back - if anything? Any thoughts?". As cofounder of VanksenGroup I spent lots of my time wondering about the ad industry next move and the skills to develop to keep our clients happy, our team motivated and keep the business running. Therefore, please find below my 2 cents about Marry Beth questions...

I think that the challenge lies in breaking the barrier between digital and offline advertising. If digital agencies are only digital, they will only be considered as technical and design supplier... and you can always find a cheaper one regarding technology in Bulgaria, India, China, ... No wonder that leading web agencies in France such as Fullsix (and don’t get me wrong they do a really good job) are losing money.

On the other hand despite traditional advertising still keeping the main share of the marketing mix, it is losing ground each year to digital and alternative marketing. The few big traditional players that have succeeded in integrating digital will probably win both the digital and traditional business of their competitor agencies that have not.

Therefore I think that digital players should be quickly moving up the food chain and integrating strategy and traditional advertising skills. No brand is going to offshore their UK or France marketing strategy to an Indian or Chinese firm... on the contrary to their website development. In the web world, they are trained to adapt quickly and be constant learners. I bet that some of them will follow this path and will go after big agencies traditional business. This is the only way they will get paid good enough to survive and thrive... and to hire and pay talents properly...

Then developing efficient and smart multicultural and international capabilities is another way to go. Despite leaving in the EU unified market, I am always amazed about the strong differences existing from one market to another. Very few players can assist they client on different market. In the cosmetics and luxury market there is a strong demand for agencies able to deal with Chinese, Korean, Japanese, Middle East and Russian strong developing markets...  Even the big advertising players that only offer poor coordination and very expensive fees are not always up for the job…

Finally conceiving tools and platforms that offer real added value and proven measured ROI is another way to avoid competing only on prices. Creating platforms to monitor brand use and abuses online, to manage Search Engine Marketing, to seed and distribute digital branded content on the growing number on social media, to better track and optimize ROI on banners campaigns, to panel consumers and co conceive or co market products and services, to connect influential consumers and brands...

At least these are the approaches we have been trying to follow for the past few years at Vanksen (www.vanksen.com) and we have grown from 25 to 100 employee ( 14 nationalities) in just 1,5 years... This is just a start and critics may say that today small achievement is no proof or guarantee of tomorrow success… but I think passion despite being required is not enough… innovation is key.

Find more about this conversation on Forrester blog for agencies : http://blogs.forrester.com/agencies/2008/05/ad-industry-val.html?cid=116250186#comment-116250186