It’s been three weeks since the proposed Omnicom/Publicis merger collapsed, but the process has brought to the surface a widespread belief that agencies and technology companies are rivals by nature. This perception could not be further from the truth. In fact, agency and tech are innate allies.
The purpose of the Omnicom/Publicis alliance was supposed to be a way to help the already massive holding companies compete with equally massive technology rivals like Google, Facebook, Oracle and Salesforce—many of whom have been chipping away at dollars that traditionally would flow toward the agency world.
This mega-merger would have helped the bottom line through cost savings on the media side, which in turn could make the agencies more competitive. But would creating a company of such epic proportions come at the cost of agility, innovation and the quality of their services?
The merger could have seriously backfired. Amidst the turmoil inevitable of any merger of such size, innovation at Omnicom and Publicis would have slowed as resources were pulled in different directions. Meanwhile, companies like Google would continue to innovate rapidly and push out new products and ideas out to market. As a consequence, the new mega-holding company may have found itself losing even more ground, because they were doubling down on scale—a problem technology can solve.
The problem is that technology is now easing the process of high volume marketing and advertising, marketing services and technology platforms are seen as being increasingly interchangeable. Programmatic buying is a prime example, as it is disrupting the value traditionally provided by trading desks and media agencies.
This rise of these new marketing technologies is being fueled by a paradigm shift in marketing, from a “plan and execute” model to a “test and learn” model. The result has been a devaluation in the perceived worth of planning and strategy, which was traditionally a critical part of an agency value proposition.
Under the “test and learn” model, size isn’t necessarily an advantage for agencies, or tech companies for that matter. What is competitive is insight and speed. This means having smart workflows, excellent visibility into performance, and the ability to reasonably address a multitude of channels and market segments.
Agencies looking to differentiate themselves can get the upper hand on big tech by adopting other technology companies for their own use. There is a treasure trove of tech products whose raison-d’etre is to compete with Google or Facebook through more specific offerings. These other tech companies can provide agencies with the more nuanced and competitive services to get the upper hand on their big technology rivals.
Agencies and tech natural allies. But they must acknowledge their respective value. More importantly realize the mutual benefits from joining forces. A successful relationship between the two hinges on each focusing on what they do best; the agency offers strategy, expertise, and a strong client base, leaving the tech to provide innovative tools and workflows for the agency to leverage.
Photo Credit: Hash Milhan