The Soda Academy
"Ad agencies are trying to become digital, digital agencies are trying to become business consultants and the biz consultants are trying to become cool by buying anything cooler than they are (aka almost anything)."
"This real-life battle for business world domination will likely have several shocking and unexpected (company) deaths."

Jim McArthur, Mirum

Agency ‘Game of Thrones’

Game of Thrones

The ultimate battle for supremacy has begun. The great houses of Advertising, Digital and Business Consulting are at war, a battle both epic and intricate. But before we can make sense of what is happening today, we must look to our past.

The year is 1950. Digital means you have a thing for fingers and toes. The Big Four are more like the mid-sized 30; they all wear green visors and have hipster brass lamps. The era of Mad Men: Four packs a day and an unwavering grip on both the vodka bottle and the global economy was the name of the game for (metaphorical) Don Draper and his cohorts. Through the force of their creative genius, they (and Hollywood) became the tip of America’s Capitalist spear. 

This unique position put yesterday’s (m)ad-men at the center of many of the West’s most successful corporations — not only handling above-the-line acquisition, but additionally advising C-Suites of the day on a variety of “line of business” activities. A classic example is J. Walter Thompson being asked by Kraft foods to help them sell more processed American cheese. JWT didn’t stop at a catchy slogan or a cute slate of ads. They decided to pitch the grilled cheese sandwich. They transcended their charter by creating a product. Granted, the production of that product was outsourced to partners and the consumers themselves, but in the end, more cheese was sold and it wasn’t just advertising that did it.

And so things went for nearly the next half-century, until, one day, the Internet showed up and began its inexorable march toward the future… our future.

The year is 1995. I am about to leave the U.S. Military to join the work force, proper. It was a simpler time. After all, I was a web designer — or a “whaaaat?!” as my mother-in-law called it, and who could blame her? High-speed Internet was barely a thing, mobile was a glimmer in our collective eye, and the World Wide Web was a gimmick in the minds of most. 

Thus, “Digital” started off like a lot of other grassroots technological movements: misunderstood & underestimated. Birthed as garage industry – on the backs of converts from other fields and hobbyists who loved it for what it was. Sure, websites were neat, but, in the end, they were below the line, (barely) marketing activities that fell far short of the importance of TV, Radio, Print, etc. They were not the sort of true business problems handled by our friends at the business consulting firms. In short, Ad men and the Portarian Trained B-School set still ruled – but the (soon to be) hipsters & hackers were there, albeit way back, watching… waiting.

Fast-forward two decades to present day: 2015. Digital as both a term and an experience is ubiquitous. I have a hard time saying it without further qualifying which part of digital I am referring to — Platforms, Mobile, Digital Products, Internet of Things, Analytics, Social, Search, Marketing, and many, many more, are all part of this massive segment we now call “digital.” 

Traditional advertising agencies are struggling to decide who they really are and what they really do, all the while acquiring as many pure-play digital specialists as they can. The Business Consultants/Strategists (PwC, Deloitte, Bain, McKinsey, etc.) are in full court press, going after jobs that they once would have laughed at. That and buying up data, design and development shops left and right. A great example of how all of this has affected our space is how major publishers and networks are now buying “large dollar” digital services. 

In the past (1999-2008), large organizations like Disney, Time and Comcast/NBC would build websites and/or mobile apps using either their advertising or marketing agency (who would likely outsource it to a digital agency), or in some cases they would engage a digital agency directly. Individual divisions within these client organizations would (perhaps) coordinate with IT on the platform, like the CMS, but mostly they just winged it. They would deploy whatever system the vendor they chose recommended with little thought to the overall digital ecosystem they were, in fact, creating. Now, businesses (especially the aforementioned) know what’s up. They understand where the market is and what is important. The focus is increasingly on digital channels and tactics over the stalwarts of TV, Radio and Print.

This should all mean good things for digital agencies, right? Not so fast. Sadly, as the things digital agencies do become more and more important to the C-Suites of the companies we serve, all the way up to the CEO, the buying patterns of those customers have changed. Actually, more to the point, our actual customers have changed. 

So, now, when a company creates an app, such as HBO GO, the chances that a pure-play digital shop would win (even if they were considered) are low. Reason: the CMO no longer solely owns these types of initiatives. In the past, apps and sites were CMO driven all the way – regardless of whether it was a “line of business” supporting activity or not. These tactics were viewed as acquisition (or maybe CRM).

Today, this misnomer is gone. Apps and websites are often purchased by large groups of stakeholders. Other C-Level executives, such as the COO and CIO, are either joint-stakeholders or the primary customers for these initiatives. The reasons for this transition aren’t simple, but they make sense. COO’s don’t buy from ad agencies or even digital agencies. They buy from business consultants. So, even though a large news organization might choose to re-platform on Drupal, they would likely select a consulting firm that would not only select the technology, but also the partners.

Which brings us to where we are now. Ad agencies are trying to become digital, digital agencies are trying to become business consultants and the biz consultants are trying to become cool by buying anything cooler than they are (aka almost anything). Terms like User Centered Design, Agile and Multi-variant testing can now be heard in the halls of PwC, Ogilvy and digital agencies alike.

So, what does this all mean for your agency? I think the biggest move you can make as a digital agency is to get out of the “middle of the tennis court,” because it’s better known as no man’s land. In today’s increasing specialist economy, businesses are becoming more and more angular in their capabilities – offering what they do best and eschewing the things that their competitors/partners (yes, that is one thing) do better.

The concept of a “digital agency” has evolved so much that companies who find themselves in the generalist position will struggle against specialists. Also, agencies that previously found themselves awash in things like platform builds will find more competition from the consultants – and ad agencies – as they acquire capabilities or develop off/near-shore operations to address this work.

So what we have is a modern “Game of Thrones,” albeit with three kingdoms instead of seven on the virtual chessboard. But much like the epic fictional narrative, this real-life battle for business world domination will likely have several shocking and unexpected (company) deaths and may well end up being ruled by the little guys when all is said and done.

Creating digital solutions for global brands has long been Jim McArthur’s specialty. Jim led several business units within J. Walter Thompson (including Mirum, Digitaria and Big on Mars), as well as overseen the establishment & development of key vertical practices. Jim has been part of campaigns that have won Webby, Addy and CommArts awards for clients including: Johnson and Johnson, Ford, Mazda, Nissan, NFL, Qualcomm, & General Motors.

Illustration provided by US-based designer, Tres Swygert