The debate continues — digital versus traditional agencies

It has been a while since I've updated my "who's winning" table on agency performance, but I think the real prediction is to say before we know the winner, it won't matter.  Everyone is running to the middle and soon enough all of the big agencies will quickly resemble one another in an integrated heaven!
That said competition runs deep in humans and there will be plenty more news bulletins of battles won and lost, and strategic analysis of how the war is progressing.
This opinion piece from Ad Age by Barry Wacksman, Chief Growth Officer from R/GA (of course), is a really well written argument.  No question the best way to win a war is to have the best army. 
If we can get our teams focusing on being a strategic advisor to clients with a big dose of innovation, solid delivery and passion for analytics on peformance we'll get out of being commoditized creative brokers and back into being non-procurable consultants and all win.  Bring on the new age of the strategic agency partner.

Forget Being a 'Lead' Agency; Strive to Be a Dream Agency
And It All Starts With Innovation

by Barry Wacksman
Published: January 11, 2010

Three recent articles in Ad Age have spurred a furious online debate about whether digital agencies are ready to "lead" and whether the industry even needs big digital agencies anymore. All three suffer from multiple misconceptions about the agency business, so it's time to offer another point of view.

The very idea of a lead agency as the center of command-and-control for other agencies has outlived its usefulness. The model was appropriate for the mass-media age, when the most important thing a brand could do was tell its story through paid media. Long ago, clients separated agencies from the "lead" and formed direct relationships with a mix of different firms. They may have spent more time (and money) with their traditional ad agency, but even this has changed. In some cases, so-called digital agencies have larger budgets and better access to senior client decision-makers, and this trend is growing.

We should worry less about being a "lead" agency and more about being a "dream" agency. We should ask: What do clients need today, and who is best equipped to deliver? This is what all agencies must consider as they create new business models appropriate for the digital age. So, if a client could build the dream agency today, what would it look like?

It would have a thorough understanding of how consumers think and feel, but also how they seek and make and share and transact. It would recognize that the lives of consumers have dramatically transformed in the past 10 years. In an era where Facebook has 350 million members and Google is the world's most valuable media company, the idea that consumers lead increasingly digital lives isn't debatable.

It wouldn't be wedded to a specific craft such as TV or print. Nor would it only think about designing a website. It would do all of those things without bias toward any strategic or tactical solution.

This agency would have innovation at its core and the ability to craft campaigns to promote these innovations. But it would start with the innovation — not the other way around, as most traditional agencies reflexively deliver campaign ideas as the first step.

Data would be its guiding light. It would have the right people to mine the data, interpret it and, based on the results, provide direction on whether and how to proceed to achieve the best ROI.

It would produce things with efficiency and fidelity, recognizing that brilliant ideas can fall apart with poor execution (a bad user interface, for example). It would understand that clients have an unprecedented opportunity to deliver massive amounts of content via free media channels such as YouTube and Facebook, as well as owned media channels, such as their own websites, mobile apps and Twitter feeds.

Whichever agency gets to this state of Nirvana first is likely to be the most important strategic and creative partner for clients — even if it's no longer called a "lead" agency. So, who will get there first?

I'd bet on the current crop of large, independent digital-age agencies. The most evolved have the skills to formulate and execute ideas that are digital but extend far beyond it. These agencies have had the advantage of evolving alongside the biggest consumer trend of the 21st century, the digital revolution, just as their predecessors had evolved alongside the biggest consumer trend of the 20th century, the mass adoption of TV.

The question — "Are these agencies ready to lead?" — has already been answered by the many clients who have appointed them as their primary strategic agency partners.

Barry Wacksman is exec VP-chief growth officer, R/GA.

1 Comment
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  By JMorganBaker | London January 11, 2010 06:42:35 am:
This is a really well written piece and having been in digital market for 10 years now, it isn't a surprise that I agree completely. One thing to remember though — "execution" which you use as an example poor user interface, is also client management. Traditional agencies have real skills in gaining consensus around creative ideas that digital agencies–because we work with such complexity–often miss. Also if you replace "innovation" with "creativity," you have the argument all of the integrated agencies are making in the market today. It really is a rush to the center — is it easier to teach print to digital creative than vice-versa? Probably. Will digital agencies continue to see big growth, definitely. But the scale difference between big traditional agencies and big digital agencies means the big agencies will have time to learn how to be consultative, integrated and innovative.


R/GA Agency of the Year – Adweek

R/GA really may well be setting itself out as the agency for the new millenium.  They do a lot of things differently — a lot smart, some less obvious.

Take the smart set.  Here is a set of quotes from this AdWeek article that are really sharp in my book and when you review them — and other notes about the agency — you see a theme:  the importance of technology, the idea that you create applications that are fixed rather then campaign-based, and that brands must commit to be successful.

R/GA has been the fastest growing agency since the 90s, has done amazing work and retains clients with big relationships.  That is by definition success in our industry.

“There’s a difference between us and someone like Crispin Porter + Bogusky. We’ve taken the direction of building brand platforms rather than viral stunts or one-off things.” [Robert Greenberg]

The key, as Greenberg has long and frequently advocated, is technology, which enables forward-thinking companies to build systems that attract and retain customers while weaving marketing and product together.  “We’re looking at customer behavior and seeing how to create something bigger than a TV spot or print ad,” says Greenberg, an architecture buff.

With a relationship dating to 2001 — a lifetime in the interactive world — Nike and R/GA are deeply enmeshed. “We have people on the ground at Nike,” says Nick Law, chief creative officer for North America at R/GA. “We have deep technical relationships with them.”

One of the crucial aspects of R/GA’s work in 2008 was to make real the promise of blurring the physical and digital worlds. This is an old quest for the digital industry and has, for the most part, come up empty over the years. Not so anymore.

“Software is a medium,” says John Mayo-Smith, R/GA chief technology officer. “Having people who understand software and a high-quality user experience is really important.”

Greenberg saw something different: He saw technology forming a new kind of creativity that relied less on the metaphors of talking animals in TV spots and more on brands connecting people. If the “traditional” notion of digital creativity is the hot viral video, Greenberg counters with an application that uses data in a new way to help people live better.

The key to apps: tech chops.

“They understand the Web, engagement on the Web and e-commerce,” says Michael Mendenhall, CMO of HP. “But they also understand advanced TV, mobile and all the other touch points that are part of the digital ecosystem.”

Entry to the executive suite also has given Greenberg an opportunity to sell his religion: that agencies must have technology at the core to help clients navigate the new world of digital media. While traditional shops might thrive in creating the hot viral video of the day, he preaches, they will fall short when it comes to building sustainable brand platforms and useful applications that blur product and marketing. That even applies to a shop like Crispin. When it comes to the core of Nike+, “they couldn’t even have the conversation,” Greenberg says.

A key area for the model Greenberg envisions is production, a discipline in which R/GA began its existence back in 1977. While most agencies rely on outside production, R/GA has kept its in-house. In 2008, revenue from the 30-person production facility grew by more than 300 percent compared to 2007. The digital studio shot over 250 video projects during the year, working for R/GA clients and other agencies and firms.

R/GA: Digital AOY 2008

The IPG shop’s mantra of utility over gimmickry proves its relevance as the stakes rise

Feb 16, 2009

-By Brian Morrissey

Stepping into R/GA’s New York headquarters, a visitor notices, amid
the general bustle of a busy shop, the beautiful, sometimes
haunting images on the walls.

They are pieces from Bob Greenberg’s personal collection of
“outsider art,” more

R/GA – AgencySpy hits a key point

Matt Van Hoven over at AgencySpy gets to see a lot of agencies and definitely spends a lot of time thinking about them and writing about them.  As much as you can’t say it is high-brow journalism, it is entertaining.  And can be insightful.

Take this comment from his recent visit to R/GA, one of the most successful agencies (of any kind) in the last 5 years. AgencySpy
“Here’s how it’s not a traditional shop. Technology plays a greater role here than we realized, typified by “technical creatives” who sit in the same space as the writers, artists and whatnot. Ideas come from everywhere, including the people who know how gadgets work. No writer/art director silos here.”

The key point here is that producing strong digital work requires more the smart creatives thinking about good digital ideas — it reaquires a structural change in how traditional agencies operate and a much stronger appreciation for the technical staff they currently keep in the basement next to the print production team.