December 7-10, 2008  |  La Quinta, California
Published: December 10, 2008
Agency 2.0: How to stay relevant

Measurement and analytics are critical areas agencies need to focus on to keep pace with the digital marketplace and the pulse of online consumers. Here's why.

No one said the era of transparency would be easy for agencies. In fact, far from it. But as they struggle to stay on the crest of changing times and online consumer behavior, agencies are finding themselves in a marketplace where extinction is a looming reality as smaller brands are increasingly empowered by the availability of online do-it-yourself ad creation, media buying, metrics and pricing.

If agencies want to be a valued partner in this chain, they need to step up, according to Tim Hanlon of VivaKi Ventures, the digital services hub for Publicis Groupe.

Basing his insights on more than 20 years of traditional and interactive agency media experience, Hanlon addressed the iMedia Agency Summit attendees in La Quinta, Calif., with some pretty dire predictions of what will happen if agencies don't adapt to the social and technological changes going on in the digital landscape.

"We are a sorry lot," Hanlon said. "Flat-footed in the middle of a generational change in our business... We're now outside of the black box, and we are naked to the world. If we don't realize that as agency people all of our actions are being seen by everyone out there, then it's put up or shut up time."

The time is now, he stressed, for agencies to adapt and update their strategies. Creative, digital and targeting need to work more closely and be outside of silos, and a better blend must be achieved. Agencies also need to develop and implement the right tools to more keenly hunt for "colonizable" online environments or media.

"The old agency model was really good at silos," Hanlon said. "But this change needs to happen on our watch. The time to change the roof is not when it's raining. We're in the middle of a storm, and we need to hammer a lot faster."
As a result, Hanlon foresees a radical collision between the traditional marketing process and performance jockeys, and a major shift will need to occur for agencies to remain relevant.

Hanlon's seven pointers for the modern agency:

  • Transparency
  • Open platforms
  • Lower barriers to entry
  • Everyone is accountable
  • Goodbye agency black box
  • Media no longer (exclusive) middlemen
  • People directly in control (business models be damned)

"Performance-based marketing is here to stay," Hanlon said. "You need to understand this now. The reality is that brand marketing and advertising has historically gotten a free ride. We don't really get judged on the quality of the performance of the ads we run on TV. But in the realm of online, it's the complete opposite where you're only paying for success."

Hanlon pointed to measurement, data and analytics as critical areas of change agencies need to focus on immediately to keep pace with the digital marketplace and the pulse of online consumers.

He referred to the current sources of data and metrics the industry relies on -- such as Nielsen//NetRatings and Arbitron -- as antiquated and lacking in innovation. The time for learning to translate digital media into meaningful currency is now, Hanlon added, noting that consumers are currently ahead of the media industry's ability to measure, evaluate, buy and sell.

He cited NBC's Total Audience Measurement Index (TAMI) -- which used measurement sources from many different online sources to measure the success of the 2008 Beijing Olympics -- as a step in the right direction.

"In today's world, you have audiences who are consuming and sharing and mashing up in ways we can't ascribe to," Hanlon said. "We may be chasing a dog a miles ahead of us... You've got to boldly embrace new forms of measurement. What's happening out there is far more sophisticated than we are."

In keeping with the vision VivaKi is working toward, Hanlon stressed the importance of creating centralized approaches to buying and measurement platforms so that agencies can be in a better place collectively.

Hanlon's pointers on revising the agency approach include:

  • Measurement, data, analytics
  • Performance-based ad messaging:  CPM + CPA = ?
  • Data-driven creative
  • Long-tail, self-serve marketing
  • Consumer-driven communication and content
  • R.I.P. Big Media
  • R.I.P. Big Agencies

To summarize the theme of his talk, Hanlon circled back to the first slide of his PowerPoint presentation: Agencies: SOGOTP (sh** or get off the pot).

"Are we part of the solution or part of the problem?" he asked the audience. "If we think bigness will get us there, we're wrong. If we think classic approaches to media buying will get us there, we're wrong. In a dour economic environment, we need to reinvent what it means to be a digital agency. The time to show value is now."

Gretchen Hyman is the executive editor for iMedia Connection.