The Lines Between Brand, Agency and Media Are Blurring. The Future Looks Like Hollywood.

In November, we learned from AdWeek that Mountain Dew, for it’s upcoming campaign, was forgoing using it’s agency of record, BBDO to handle it’s upcoming campaign and instead was opting to turn duties over to a number of smaller, specialized, niche firms. But what was really newsworthy in the story was the fact that Pepsi was looking to the crowd to source not only the marketing for their product, but even the product innovation and flavors were going to be crowd sourced.

Shortly after this, AdWeek touted a new marketing campaign for Toshiba that was completely developed and executed by…ESPN, a media company!

And now we learn one of the most venerable CPG company’s in the world, Kraft, also sees itself as a media company.

What’s going on here? Well, once again, digital tools and media are upsetting the apple cart of the advertising industrial complex which has been operating for the last 100 years. Things like digital printing, YouTube channels, Twitter streams, Facebook pages and iPhone applications now make it possible and affordable for brands to develop their own media properties.

This is not good news for the agency middlemen who sit between brands and media. They’re not as needed as they once were.

As the economy drove a cut back in traditional advertising it simply accelerated the shift of dollars going to digital. On top of that, the agency’s cut staff, throwing a lot of talented people into a freelance way of work and life. Think those agency’s will start hiring anytime soon? And, even if they do, think those employees who’ve been kicked to the curb will ever completely put all their eggs in one employer basket again? No, this recession has created a class of freelance marketing and creative professionals who will never give up the security of “being the man” for “working for the man” ever again. Add to this the downward pricing pressure put on agency fees by client’s purchasing organizations and you’re looking at a permanent change in the agency business model. It just can’t support the high paid suits or expensive offices and other trappings that add no client value and only contribute to overhead.

But, I wouldn’t think the picture is too bright for the media company’s either. They’re used to ever increasing rates for their ad slots, which more and more of the audience is avoiding. The free (because it’s ad supported) broadcasting model, we’re told, is going away. Even with the partnership experiences like Toshiba/ESPN or HP and MTV, I still think brands will be reluctant to hand over their strategic destinies to the promiscuous media companies. It takes far too much money to produce quality content for the media guys to  get totally in bed with just one client in a category.

What I think will emerge from this rubble is a new kind of agency…one that has a small core of strategic and creative thinkers, who get the client’s business challenges and can develop big ideas executed in a 360 way. But, when it’s time to execute, they’ll tap into all the freelance talent that’s been created by this bust. Get used to a just-in-time human resource model. Is this such a bad thing? Not really, Hollywood has been doing it for a long time.

In the movie business, you have a model where a team of talented people assembles for a project, works on the project and disbands once the project is over. Everybody is just-in-time. In this new Hollywood-like model, look for agencies to play the role of producers on the clients business. They’ll come up with the creative and business solution then put the entire production team together to execute the campaign or project. When they’re done, they’ll all move on to other things.

Digital technology is making this new style of working possible. There are digital freelance community resources like ODesk, Guru and eLance that have sprung up. I don’t know how successful these groups are yet. It seems they’re offering a piecemeal solution that the clients have to manage. And, this won’t work because very few clients could actually play the role of a producer. They just don’t have the skill set or experience not to mention the time. I have yet to see an agency really position themselves as operating this way. But, it has to happen. The current model just will not sustain much longer.

The other area where the new agency will be different than in the past is that they’ll actually be creating the media channels for the clients. No more of this leasing media stuff. It’s now become cheaper to own than to rent. Agencies that demonstrate their capabilities in developing communities of consumer and new media opportunities and innovations will win.

Like all evolutionary changes, this will take some time. The stakeholders of the old advertising industrial complex (mainly agencies and media companies) have too much of a  vested interest in maintaining the status quo as long as possible. After all, there’s high-paid executive salaries and expensive office space to pay for. Not to mention the glamour of flying out to LA to stay at Shutters and work with beautiful people to make your 30-second TV spot.  Or going to the Super Bowl. Or any of the other trappings and treats that come with the old way of getting marketing and communication stuff done.

But, watch out. This could happen much sooner than anyone thinks. Digital has a way of sneaking up on you. Especially when your audience is flocking to it.

Kraft Continues to Expand As a Media Company – Marketing with Meaning.

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About Scott Cone
A husband to a loving, lovely wife. Father to six great kids and two grand kids. I'm a marketing, advertising and promotion professional with a keen interest in big ideas, all things digital and especially how mobile is changing all aspects of communication and marketing. I play guitar and sing, write music, write screenplays, act, scuba dive, weight lift, ski and enjoy Christian apologetics, logic, evolution versus intelligent design and the basis for morals, values and ethics.

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