Feature Friday: The Evolution of Agencies and Market ResearchGuest interview with Andy Prakken
We often write about different ways agencies can use market research, all from a researcher’s point-of-view. Today we flip the script. We have the esteem privilege of hearing about the evolution of agencies and the current and future role of market research, all from an agency point-of-view. The following is an interview with Andy Prakken, former EVP/Chief Media Officer at Team Detroit and current President at Prakken Marketing & Media LLC.
How have Advertising Agencies evolved over the past 10-15 years? And how have changing client needs impacted the evolution?
During the 90's, as ad agencies grew larger through acquisitions, they unbundled their offerings to increase revenue. As an example, they extracted and consolidated their media operations into stand-alone structures. This also included CRM, digital and other individual disciplines as well.
By doing so, unbundling services allowed greater scale, expertise and increased negotiating leverage. It also allowed agencies to acquire new business through specific disciplines such as media only as the AOR—Agency of Record.
At the same time, clients found this business model highly attractive since it allowed them to pick and choose services from varying companies—creating an even sharper competitive edge.
However, by unbundling services, it created integration challenges such as silo-type organizations that would operate under separate P&L structures and therefore pushing them to work independently from one another. At the same time this also forced competition for a larger share of the client's overall marketing budget. Ultimately though, this behavior impeded both collaboration as well as coordination.
Simultaneously, the media landscape changed and evolved faster than any other time historically within the industry. New media channels emerged at warped speed bringing much deeper levels of engagement along with precise targeting capabilities.
The explosion of new devices and technologies gave consumers ultimate control and connectivity, coupled with the emergence of big data. Suddenly, the media world became incredibly complex with a multitude of media platforms.
Combining the lack of coordination across silo-type agencies, with media fragmentation and platform convergence created tremendous integration challenges. While marketers always knew that well integrated programs would create more meaningful and profitable brand engagement, it was becoming far more difficult to create them. The inception of these silo-type agencies and the need to forge relationships across each silo, made it further challenging because it put the onus of integration directly on the client/advertiser.
In response, the larger agency holding companies began experimenting with various business models such as virtual single P&L and over-arching management leadership in order to encourage integration and nurture explorative ways of providing more media neutral perspectives.
This progression of “agency change” also led to the re-emergence of fully integrated smaller and mid-sized operations that could more easily design and execute integrated communications—while therefore avoiding the competing P&L struggles of the conglomerates.
However, the challenges of these smaller to mid-size agencies often lied in providing enough depth & expertise within the given subject matter. To compensate, these independent shops often times would look to create strategic alliances with specialty verticals.
What are the most common problems clients are trying to solve?
Due to unbundled and individualized marketing services, along with the explosion of new media, integration remains a major challenge.
This becomes especially true when trying to build integrated programs designed to fully leverage Paid, Owned, Earn and Social media channels simultaneously. Additionally, with a lack of coordination and information sharing across competing agencies, it makes it more difficult to capture and glean data insights across all consumer touch points.
Even within client structures where silo-type groups often work independently, getting shared ownership and scale behind key programs becomes exceedingly more difficult.
Secondly, the lack of well-constructed, inclusive work processes inhibits collaboration and coordination. An all-inclusive working methodology that is supported by clear decision-making processes is exponentially essential to creating and executing powerful cross-channel integrated programs.
In what ways should Agencies use marketing research to help them better serve clients?
Research and data insights are critical to understanding and developing business/marketing strategies. Plus, these insights assist in designing well thought-out integrated programs across all paid, owned, earned and social channels.
Having well-honed metrics allows for dynamically adjusted programs, which in turn maximizes return and sets the stage for future program performance expectations--all driven by market research and advanced analytics.
Advanced modeling techniques that go well beyond simply predicting short-term sales or behavioral actions are required to predict key success metrics.
Successful brands that truly understand both attitudinal and behavioral response while harnessing the power and insights from big data, will put them in a much better position to grow share while increasing profits.
In what areas do you wish you could get more out of Market Research? i.e. How could the Market Research industry step up their game?
Research must continue to strive to deliver more meaningful insights across the board. By leveraging big data for business planning, in addition to offering transparent optics that offers a more complete view of brand engagement as well as the purchase process is essential for greater success.
Attitudinal insights and learning that’s captured from digital, social and cultural programs must evolve. Greater understanding of social influence and the effect it has on driving brand value while also enhancing integrated marketing ROI are needed more than ever.
What role do you think Market Research will play in Advertising Agencies 5 years from now?
The role of market research will continue to evolve & expand in order to provide greater insight and understanding for the entire marcom investment.
Advertising and marketing budgets have never been more scrutinized, especially given the latest recession. The industry will continue to progress and use market research and advanced analytics to prove marketing’s efficacy as an investment and not simply a cost of doing business.
Media targeting, deeper consumer engagement and social content sharing will continue to become more complex and precise with on-going support from advanced analytics delivering fact based insights and true ROI.
Therefore, market research will continue to be even more essential at defining, understanding and guiding every element of the marketing mix.
Help give us feedback. Do you agree with Andy's assessment of the evolution of agencies and the role of research? Let us know in the comments!
Are you on Linkedin? Follow Optimization Group!
Image attribution: by jared
ABOUT THE AUTHOR
He also specializes in building integrated marketing programs that strengthen the bond between brands and customers by creating truly engaging and immersive brand experiences. These programs generate brand advocacy that drive consumer/brand actions. Prakken, was most recently EVP/Chief Media Officer at Team Detroit servicing Ford Motor Company globally as well as nationally.