Why agencies and marketers need to think and act like data companies
It's no longer enough to offer compelling creative. Columnist James Green says marketing agencies need to tap into the power of data if they want to satisfy clients and drive results.
The digital advertising industry is no stranger to keeping up with new advances, but many are struggling with today’s most important challenge — the necessity to leverage precision data to achieve a client’s business goals.
The convergence of ad tech and martech is pervasive, and so, too, is the personalization of data. Now, we’re optimizing our marketing spend by person so that individuals see unique messages across ads, email and a brand’s own site.
Having access to both client data and broader consumer information is essential for any marketer looking to build effective digital strategies, and this need is causing big changes in the agency/marketer relationship.
Marketers demand precision, and agencies respond
Every day we see the power of data’s impact on the advertising industry like never before. We’re no longer living in a world where agencies are rewarded for creative alone.
Marketers expect insights that leverage a plethora of information and real-time data to drive business goals. Keeping up with the marketer’s data-driven demands is critical to providing clients with hyper-relevant, addressable marketing that resonates with their audience and drives results.
Access to real-time data and analytics is no longer a luxury or “nice to have” item, but rather has become a necessary component in a brand’s overall digital strategy. Agencies now understand that it’s not enough to just provide great creative and ad targeting — they need dynamic insights to better understand their client’s audience.
DMA/Winterberry Group polling from October 2015 showed that four in 10 US marketing professionals wanted their agency partners to increase their focus on data and related functions like predictive modeling and segmentation. And more than one-third wanted their agencies to become more sophisticated users of marketing technology in order to guide its utilization within their company.
Given all of this, it’s no surprise that tech- and data-focused agencies are in high demand. In a survey conducted by eMarketer, 74 percent of senior marketers surveyed said that it is important to have an agency with marketing data/analytics capabilities and that this would be a deciding factor in the agency selection process.
The highly publicized Publicis acquisition of technology consultancy Sapient in February of 2015 — and several other mergers that followed — tell us that agencies get it and are aggressively amping up their capabilities.
History repeats itself
In the survey released from Winterberry Group, having better data technology (e.g., segmentation, processing and so on) and more first-party data ranked highest in terms of resources that would advance data-driven efforts.
With all the services that agencies already offer in-house, one might think that adding data/analytics capabilities is a rather tall order, but the advertising industry views this as a very positive, almost natural transition.
When you think of the title alone, an “advertising agency” is an incredibly accurate and descriptive name. The name arose as agencies represented their clients’ interest in all marketing and communication. Today, it is clearly within the agency’s purview to leverage data and analytics to get the job done for their clients.
Agencies and the brands they serve continue to go through a metamorphosis. We saw this happen when search was introduced: Clients brought search in-house, the entrepreneurs became specialists, then agencies acquired either companies or the experience to be the experts.
As a result, there are now partnerships between agencies and brands in search marketing, and this same change is happening in digital advertising today.
Quality data is tilting the balance of power and triggering a whole host of agency transformations. As history shows, change is the only constant in the advertising industry — digital or otherwise.
We should expect the same transformations — as we’ve seen through other innovations — with data. As agencies integrate more data from their customers into their systems, they will be better equipped to be the marketing partner that brands want and need. The key to differentiation will be in the execution.
It’s a new world order in the advertising industry, but it’s likely not the last one we will see, if history is any indicator.