Keeping Agencies Relevant in the Programmatic Age
Every time technology shifts, the direction goes from a complex infrastructure to a simplified, improved customer or user experience. This shift is the same driving force putting digital media agencies in a tough spot.
Brands constantly want more value for their money, and many are turning to programmatic systems, which are designed to purchase ad space automatically. But Business Insider reported in July that Google (@Google) had spearheaded a test that revealed rampant instances of spoofing on multiple ad exchanges, and audit verification company Adloox (@Adloox_Live) estimates that ad fraud will cost companies as much as $16.4 billion this year alone.
It’s clear that programmatic systems, while easy, might not be the best solution for brands. That’s where agencies come in: For brands that aren’t marketing experts, an agency is a vital resource for building business models that work. Agencies can create customized ad-buying systems that are as simple as programmatic systems but are easier for brands to control to avoid ad fraud — through safety filters and viewability optimization, for example.
But the problem for agencies is that as they create systems that are easier to control, better at predicting results, and simpler for brands to use, the need for agencies to run those systems naturally falls off. It makes more sense for brand leaders to pay a staff member $100,000 a year to manage the system than to pay an agency a percentage of the ad budget — which for A-level brands can be a multimillion-dollar difference. So how can agencies continue to help brands without making themselves irrelevant?
Brand Ambassadors Are Key to Keeping Agencies Afloat
Fortunately, I believe there’s a way out of this Catch-22: Agencies can learn from brand ambassadors and employ similar strategies to increase user-generated content for their clients. Campaigns based on UGC are the most effective: UGC content generates an increase in click-through rates of up to 400 percent and conversion rates as much as 25 percent higher than in other campaigns, according to Ben Dickens (@bendickens) of the U.K. agency DVO (@DVOagency).
For brands that want to shift more toward programmatic campaigning, rolling out UGC across all marketing initiatives is a smart strategy. UGC-based campaigns are clearly effective, but that’s not all: UGC also lends credibility, as consumers are more likely to trust UGC than other forms of content, according to Olapic (@olapic). A good way to acquire lots of UGC is to hire brand ambassadors, which is often too tiring and time-consuming for brands to do alone — but agencies can help.
Audiences will often create more UGC when encouraged through brand ambassador campaigns, invitations to engage with the brand through hashtag campaigns, rewards for participation, or contests on social media. The way for agencies to stay ahead of the current programmatic trend is to study and understand brand ambassador campaigns and learn to scale initiatives in a similar manner.
Consider Lyft’s successful strategy: As a brand, Lyft (@lyft) cultivated its friendly and authentic image by employing high-quality brand ambassadors. As a result, the company saw its market share jump by more than 135 percent in just one year. As always, word of mouth and recommendations from friends remain the most powerful forces in advertising.
Brands will always look for ways to drive down margins, so much so that many companies continue to waste millions of dollars on fraudulent ads. Marketing agencies need to meet their clients’ demands for simple, effective, and safe marketing systems at a lower cost or risk being taken out of the equation altogether.