Adweek - 02.09.2019

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12 SEPTEMBER 2, 2019 | ADWEEK

®

The Business

Of Advertising

FOCUS ON THE OUTCOMES AND CLIENT INSTEAD

OF THE AGENCY MODEL. BY FLORIAN ADAMSKI

unsustainable solution. Because if we’re

in the agency business, in-housing is an

existential threat. If, on the other hand,

we are in the outcomes business, our

value isn’t measured by the breadth of

our remit but by the depth of our impact.

With close to 80% of U.S. brands

now reporting in-house marketing

operations, in-housing is no longer

a trend; it’s secular change, both

inevitable and irreversible. But there

is still enormous opportunity for

agencies in this new reality, provided

we can change our business paradigm.

We can remain relevant and, indeed,

invaluable by integrating with in-house

operations in three specific areas.

TA L EN T

How many times have you heard

talent used as an argument against

in-housing? Saying that in-house

operations can’t attract the same

level of creative and media talent as

agencies has been so overused that it

borders on cliché. Then again, clichés

are clichés because they are true.

Rather than using talent as a wedge

issue, wouldn’t it be more productive to

see it as a point of integration? Today’s

marketplace demands a deep talent

pool of teams comprised of individuals

with diverse discipline expertise at the

local or regional level, coupled with

global perspective, people who are

curious, collaborative and committed

to exploration and innovation. In other

words, the type of people that agencies

are best positioned to attract, at

scale. Agencies need to view their

talent as a shared asset in driving

outcomes and the foundation for a

new relationship paradigm.

TECHNOLOGY

Agency and in-house client teams

must be powered by a shared

technology platform that is intuitive

and future-facing. Moreover, those

platforms and tools should be built

for clients to operate (and potentially

own) themselves, enabling real-time

decisioning today with an innovation

pipeline that delivers competitive

advantage tomorrow. Clients deserve

to have a clear road map for how

their agency will advance their media

maturity model and maximize their

existing knowledge while at the same

time have visibility of tech audits,

assessments and new use cases.

PROCESS

Agencies can bring effective and

efficient processes hard-coded into

a technology platform to drive agile

and connected decision-making.

Understanding that a process must

be fine-tuned to client needs to deliver

business outcomes, agencies can

In 1960, Harvard Business School
professor Theodore Levitt launched
the age of modern marketing with
a Harvard Business Review article
where he wove a powerful argument,
saying that companies should stop
defining themselves by what they
produced and instead reorient
themselves toward customer needs.
Using the decline of the U.S. railroad
industry as an example, Levitt suggested
that the railroads didn’t stop growing
because the need for passenger and
freight transportation declined. In fact,
it was rapidly growing, but the need
was being filled by other means of
transportation like cars and airplanes.
The problem, according to Levitt,
was that they assumed to be in the
railroad business rather than the
transportation business. The reason they
defined their industry incorrectly was
that they were railroad-oriented instead
of transportation-oriented, product-
oriented instead of customer-oriented.
In other words, the railroads
stopped growing because they forgot

what business they were in.

Now let’s imagine how Levitt’s

theory might be applied for an analysis

of our own industry a decade from now.

Agencies didn’t not stop growing

because the need for creative and

media declined. In fact, it was rapidly

growing, or the need was being filled

by in-house operations. The problem

was that they assumed themselves to

be in the agency business rather than

in the outcomes business. The reason

they defined their industry incorrectly

was that they were agency-oriented

instead of outcomes-oriented, model-

oriented instead of client-oriented.

To prevent this exercise in fiction

from becoming a statement of fact, we

as an industry need to ask ourselves

a simple question. What business

are we in: the agency business or the

outcomes business?

If we are in the agency business,

then by all means let’s continue to

expend time, energy, ink and pixels,

making the case against in-housing

as an inadequate, ineffective and

OPINION

be economic multipliers by creating

customized processes that can evolve

with a client’s business and offer

distinct points of view as to how the

in-house team can and should use their

data and technology to deliver portfolio

planning, budget setting and predictive

modeling. By enabling visibility and

speed, agencies can help in-house

teams design more valued and valuable

end-to-end customer experiences.

Leveraging our core capabilities to

support in-house teams, agencies can

transform an existential threat to a clear

and present opportunity, demonstrating

the critical role we play in advancing,

augmenting and accelerating outcomes.

Because that’s the business we are in.

Specs

Claim to fame

Florian Adamski is the CEO of OMD

Worldwide, the world’s largest

media agency and Adweek’s

2019 Global Media Agency of the

Year. He is also a member of the

Adweek Advisory Board.

Base New York

‘Saying that

in-house

operations

can’t attract

the same level

of creative and

media talent

as agencies

has been so

overused

that it borders

on cliché.’