How data is reshaping the agency relationship
Victor Wong
May 2, 2017

Last year, a slew of global brands conducted agency reviews, from Procter & Gamble to General Mills, J.M. Smucker’s, McDonald's and AT&T. Even though the industry has questioned the agency of record concept, most brand managers realize that "projectization," hiring a variety of specialized agencies for project work, only increases fragmentation. Many marketers still want a lead agency, but they need a more modern approach. They need a way to integrate creative, media and data to enable targeted messaging across the customer journey, on different channels and in different regions.

To win and retain the most business possible in today’s environment of widespread agency review and specialized vendors galore, holding companies need to emphasize dynamic and programmatic technologies and the advantages of integrating cross-channel approaches.

The success of Omnicom illustrates what is possible. It had a heck of a year, successfully poaching a variety of big-name brands, including some of the names listed above. Its success is due in large part to its ability to offer advertisers personalized creative across display media, search, email and landing pages—a unified and tailored customer journey.

At the heart of its offering is Annalect, its data and marketing sciences group that works together with other Omnicom agencies to deliver targeted messaging. The ability to integrate creative services around data science and standardized ad technologies is proving increasingly critical to agencies in their quest to meet big brands’ demands.

How we got here (data!)

In the past, it was typical for brands to work with a number of agencies to handle different facets of their marketing needs. For the most part, those agencies were coordinated by the agency of record, but they frequently worked independently with visibility into only one part of the campaign.

Data is changing and challenging that structure. Companies have invested heavily in their ability to collect data; as a result, they know so much more about their customers and their journeys than they did in the past. Because this data exists, and because brands continue to devote resources to obtaining it, they expect to be able to use it—to activate it! But doing so effectively and efficiently is challenging, especially if you are working with 10-plus specialized agencies with siloed responsibilities.

Facebook has helped show brands what is possible. It allows marketers, big and small, to access an incredible level of data and implement sophisticated targeting strategies at a relatively inexpensive price point. This is inspiring marketers to expect that same level of audience and creative targeting from other digital channels, and to adapt an integrated approach.

What happens next

Data is the heart of the new wave of such popular marketing concepts as personalization, people-first marketing, programmatic creative, omni-channel marketing and adaptive content, just to name a few.

Labels aside, these all speak to a similar concept—the idea that data can be used to deliver a more tailored and, in turn, more effective experience for consumers, across multiple devices and platforms. To accomplish this, you need to see the big picture. Brands are learning that cobbling this picture together across a slew of agencies is not as effective as adapting a truly integrated approach.

Savvy agencies are broadening their capabilities rather than narrowing them. Holding companies are working to find synergies amongst their constituents and using data to connect sister agencies and develop a more holistic approach, as Omnicom has done.

The notorious competitiveness of agencies will only increase over the next few years, as brands continue to consolidate their third-party relationships and ask their partners to deliver more and/or better results, often with the same or a smaller budget. The vendors that have yet to get this memo—the ones that aren’t embracing change, especially data and technology advancements—are the ones most likely to get cut in agency reviews.

Groups like Annalect show us what is possible and illustrate a prodigious paradigm shift. In the past, brands were drawn to agencies that had the best creative talent. Now, a deep roster of talented data analysts is at least as important as a strong lineup of creatives—maybe even more so.

And the agency delivering the winning sales pitch is most often the one that both understands data and can do creative things with it, while tying it all together with technology.

Honored in AdAge’s 40 Under 40 while still in his 20s, Thunder CEO Victor Wong has been the guiding force in the company’s vision and success since its founding in 2008. He served as the IAB Local Committee Co-Chairman in 2010 and coauthored the IAB Local Targeting Guide. Victor holds a BA in economics from Yale University and is a fellow of the Yale Entrepreneurial Institute.