Has Disruption Become a Buzzword?
It is akin to the fall of historic empires. Entire industries are being upended by agile new business models aided by innovative technologies. We know the names. Amazon has declared war on traditional retail. Uber is morphing into a logistics behemoth. Airbnb implores us to experience a place like a local, not make a hotel room your destination.
It seems no one is safe. Academics and gurus once spoke of “barriers to entry” and “adjacent spaces”. It is time to change the curriculum. The business world is now one big white board waiting to be filled. The problem is many companies do not know how best to wield that non-permanent marker. We are moving so fast that it is paralyzing many into inaction.
Case-in-point is the beleaguered traditional advertising agency. These creative businesses are showing they lack creativity when it comes to their own industry and business model. They are being squeezed and stretched at the same time.
Before we get to the competition, consider WPP’s latest earning results. The largest advertising holding company in the world reported flat revenue. Its CEO is lashing out rather than realizing he sits atop a gigantic ship that is tough to maneuver. Big brands are bringing the creative talent in-house or looking elsewhere for answers.
Part of the problem is the old ad industry relied on the mystique of creativity. That is rapidly dissipating in the age of brute force technology that pops (mostly irrelevant) messages onto our devices at every given moment. Momentum is moving towards to big disruptive forces.
The Mad Ad World is facing down both the technology giants and consultancies. Amazon, Apple, Facebook, Microsoft and Alphabet no longer just carry marketing messages, they are creating them and making sure they land where they cannot be ignored. Meanwhile, who would have guessed we would have Deloitte Digital, PwC Digital, IBM Interactive and every other “traditional” consultancy entering Adland.
In fact, 8 of North America’s top 10 agencies are owned by consultancies. Accenture has acquired at least 40 of them. Deloitte, KPMG, PwC, and McKinsey now have agency arms. All of the players, experts and media have characterized this as a turf war; that consultancies are encroaching on agencies and vice versa. They are all wrong. It was once a story of traditional lines being crossed but now it is more simple and far more complex at the same time.
There is a theme. Both consultancies and agencies are not truly trying to emulate each other or steal traditional share. In reality, what is happening is they are cherry picking the good things from both models and keeping the well-noted bad stuff out. The goal is not a consulting and advertising Frankenstein but the building of a whole new type of business.
The winner will be the one who innovates this new business. Unfortunately, both consultancies and agencies are attempting to build it in the highly traditional ways they are comfortable with. That may be a prescription for expensive disasters and not what an entirely new category needs. Meanwhile, the tech giants are the closest to envisioning the new category but are distracted by so many other opportunities.
All three players need help winding through this complexity. The role of data, organizational design, attracting and retaining talent, winning new business. There is so much to unpack and sort through. Yet, there is one big puzzle piece missing. It seems to me that no one has asked the client what they want. That is the real opportunity.