Okay, I know I am biased but hear me out. There has been much ink spilled over the strategic position that pure-play digital agencies occupy at the marketing table. It’s an interesting debate, and one that seems quite emotional and polarizing. The recent furor and subsequent responses to a blog post on AdAge.com has opened up the industry to a new ‘traditional’ vs. ‘digital’ agency smackdown. Although I adamantly disagree with its assertion that digital shops are not “strategic” in their nature, I do understand the argument.
The author’s experience comes from working with digital shops that are not structured around providing “strategy” as it fits the typical definition in the ad business. These agencies, among others, are production agencies. They are typically tasked with technological and creative innovation to drive a campaign that has been structured by an AOR. In many cases, these agencies are treated in a similar manner as a commercial production house where an agency briefs out a project and selects the one that can deliver the appropriate output. In this regard, we need to compare apples to apples.
Okay, so the music industry makes sense, but what about broadcast TV, radio, print, PR or Out of Home? That’s not digital – is it? Yup, it sure is. Digital is not a single delivery platform or medium in the same manner TV or print is. Digital is what integrates all media into an interactive experience. It does not live without the content that ‘traditional’ media has always been good at – copy, images, video, voice, and animation. Digital, as I see it, is the amplification catalyst that drives all brand communication across all platforms. In essence this is what integration is and should be.
Back to my original point – everything is digital. At Noise, we have seen first-hand the evolution of media’s attempts at transforming their analog business models into digital ones. Due to the fact that traditional broadcasters have now finally started streaming most of their content online and with the success of Hulu in the US, the need to figure out the ad revenue model is now more dependent on ‘digital’ than ever before. In the print world, The Globe and Mail’s online property continues to shift content online as a way to integrate their advertisers into their property with varying degrees of success. Print media, magazines, and newspapers in particular were the canary in the coal mine for the media industry and continue to suffer from the digital wrecking ball.
Wired editor Chris Anderson has written extensively on the Long Tail theory of economics and the book “Free” spells out the reality that we all need to deal with: Content will need to be free (or close to) if you are to survive in the digital media landscape. The high cost of producing print content has exacerbated the rapid restructuring of the industry. On the radio side of the business, we have seen a massive consolidation as it relates to content production (who plays the music, reports the news, sports, and traffic) and ownership. As a consequence the radio industry, against all odds, has squeezed impressive profits over the past few years. In typical “make hay while the sun shines” scenario, the radio business will be looking at being ‘Napsterized’ (the digital equivalent of vaporized) if they don’t invest those profits into a digital strategy. Radio, although it delivers its content primarily via the airwaves, is indeed in a digital industry. Although the digital threat of satellite radio has not impacted terrestrial radio as expected, the fact remains that kids don’t listen to radio anymore.
Digital music/audio information has forever impacted the manner in which people buy, listen to, and interact with audio content. If the terrestrial radio industry does not figure out a way to get their content to consumers on the digital super-highway, they can start digging their graves. I love radio and sincerely believe that they have the most opportunity to convert to a digital business model. Radio is a lot like online in a few ways that advertisers love. It’s highly targeted, local, real-time, and cost-effective. It could benefit most from a digital integration strategy outside of streaming their live broadcasts on their website (that is the equivalent of posting a 30-second TV commercial on YouTube). It ignores the interactive social community that a local radio station could become the hub of. Come on, radio, spend some money on your damn website(s).
Ask Noise client CTVglobemedia if they run a digital media company or ask a global ad network exec if they understand digital, and they would both, most certainly, say yes. Digital is at the very core of their future growth. If this seems like an obvious observation – it absolutely is. There will always be agencies that are constantly innovating and who will provide clients effective strategic direction (ie. they get it). Conversely, there will always be agencies who are unable to adapt to the new digital landscape and are incapable of executing strategic direction – digital or otherwise. Ultimately, the ‘traditional’ vs. ‘digital’ agency structure is irrelevant in the context of the industry at large. Indeed, technology has and is transforming the advertising and media industry. For agencies to add value to clients’ marketing objectives they will need to be ‘digital’.