The End Of Agencies?

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Much noise this week in my social media feed about how agencies are endangered by the coming changes in marketing and advertising. The theory is that the current way of doing things for the big ticket items in media -- interruptive ads for mass-market brands, with standardized creative -- is going to go away when the last mile of connectivity gets, well, connected.

Let's back to that down out of the jargon, and put it in terms eveyone can understand. Instead of, say, 30-second spots for tires, a family movie, and an expensive sedan to appear in the middle of my preferred TV content, data would allow for the swap out of advertisers that are more relevant to my current purchasing cycles. Say, auto insurance in the weeks before my next six-month auto premium is due, beer that's in my range of past preferences, and a mobile gaming app, because people in my household are into that category. Eventually, this leads to no untargeted mass-market campaigns, or at the very least, a whole lot less of them.

And, well, sure... but only if you are in market for something more lucrative than those less targeted branding approaches. Currently, we don't have enough data to make exceptionally accurate determinations on how much each of these advertising opportunities are truly worth. Direct marketing plays, or online approaches where the branding impact isn't thought to be strong enough to bill, are a different story.

What I think is the more likely end game is a mix of placements. While we currently have local and national campaigns in, say, a basic cable run of broadcast ads. Having the ability to swap in some branding spots triggered by retargeting bids is just the logical next step. More importantly, it's hard to see how those kinds of ads would just be so much more lucrative as to overwhelm the brand spots. But the market will drive.

Where the monkey wrench hits the gears is when more devices come online, and more consumer categories join the mix. Consider wearable technology, where connected items might have, say, the ability to monitor your blood pressure and heart rate for exercise. If it's also able to monitor for spikes, we have the ability to do more cost-efficient and effective healthcare. We also have the ability to advertise over the counter pharmaceuticals to that same targeted audience.

This raises privacy concerns, of course, but the nature of privacy discussions online has been a simple one. Consumers don't care very much, so long as they see any kind of benefit for the exchange of information, and you are upfront and not very excited about the ask for the data. Also, the younger you are, the less offended you seem to be by the approach.

Realistically, there just isn't going to be enough ROI for hyper-targeted broadcast ads for anything but the most over-the-top high margin consumer categories. Which means that the traditional agency still gets to make all of the same ads that they are making right now, and many of the same buys. Hopefully, those ads will just get shown to fewer people, because they will only be going to the folks who are in the right consumer category and lifecycle moment.

That doesn't strike me as the end of agencies. It does, however, strike me as the end of dumb ones. But those folks were always going to go away, right?

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