The agency of the future

RICHARD CONWAY EXAMINES HOW AGENCIES WILL HAVE TO ADAPT IN THE FACE OF ARTIFICIAL INTELLIGENCE. INSTEAD OF FEARING AI, AGENCIES MUST EMBRACE IT, HE SAYS.

Jack Welch, former CEO of General Electric, once said “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”

In 2017, Google’s AlphaGo beat Ke Jie, the number one ranked player in the world at the complex board game ‘Go’. In 2016, Forbes predicted that China would overtake the US as the world’s largest economy within two years.

It’s not often that events of such magnitude occur in a lifetime, let alone two in the space of two years. Power has shifted from West to East, and machines are smarter than humans. It’s safe to say that there’s a rapid rate of change outside. But what does the rate of change look like on the inside? How is the current agency model performing, and how will it fare in the future?

Let’s take a look.

AN ARCHAIC MODEL

Looking at the current agency model – in any industry – it really hasn’t changed for centuries.

Though our products may have changed, we’re all still selling the same thing. The business model hasn’t evolved or been developed, and Jack Welch would say the scene is set for disruption.

I agree with Jack: our industry as we know it is coming to an end. When it comes to digital marketing, we’re largely paid to execute. From choosing AdWords through to designing marketing campaigns, it’s all about providing an execution service. Trouble is, that can’t last. Artificial intelligence (AI) is here. Large swaths of the value that we deliver will be wiped out over the coming years, as AI and automation become capable of doing much of our execution for us. There will come a time, shortly, when much of the human optimisation of paid advertising will successfully be outperformed by AI.

The end is near, but rather than the rise of AI and automation being bad news for agencies, it can be a fantastic opportunity for agencies to increase their value offering.

BECOMING FUTURE-READY

Instead of fearing AI, we need to embrace it. Take a long, hard look at your business, and separate everything that’s not your core competency. Pick out the mundane, repetitive, low-skilled aspects of your service, and invest in the technology to automate these. As long as there is enough data, there’s no reason why something as simple as analysing click-through rates, or processing keywords, should be performed by a human any more.

Agencies which advertise their unique selling proposition as being totally ‘manual design’ are out of touch with reality – there’s just no way that with the AI available, any human can analyse a decent amount of data or patterns better any more.

For non-core aspects of your business which can’t be performed by AI yet, outsource.

Rather than allocate your more expensive resources to mundane tasks, leverage cheaper resource offshore, and save your higher-cost staff for what they do best.

Do automation and outsourcing well, and your business will be ready for the next step in becoming future-ready: focusing on the human things.

IT’S ABOUT THE HUMAN THINGS

There are a couple of areas which AI and industry disruption won’t come close to replacing. These uniquely human skills need to be the focus for our industry moving forward. Firstly, ideation, creativity and problem solving. To be frank, the digital marketing industry is a little behind the eight-ball in this area, as a general rule of thumb. Other industries, such as the creative industry, are way ahead – they get paid 10x for turning up in shorts and t-shirts to talk about ideas they’ve had for an hour. Doesn’t seem fair, when they’re not actually doing anything… right?

Well, that’s the point. A shift has occurred where the most valuable service we can provide is not actually execution, it’s thought and strategy.

Agencies need to adjust their mindsets to be far more consultative. Rather than simply delivering a plan to get great ROI for marketing spend, we need to be looking at the bigger picture of our customer’s business. What are their core drivers? What business problems are they trying to solve at the moment, and what’s going on in the industry that will affect that?

As humans, we’ll always have the advantage over computers in this area. To make your agency future-ready, move towards delivering value through creativity and problem solving, rather than execution.

The second area which can’t be replaced by AI or industry disruption is relationships.

Typically, your standard digital marketer is a little introverted, smart, and good with numbers. This skill-set is increasingly becoming redundant as we move more towards automation and AI. Instead, we need to be using our people to develop deep relationships with our customers. Computers can execute, but they can’t build relationships. Look to hire staff with the ability to form stunning human connections, and make the most of this unique ability.

After all, people are what business is all about.

IT’S OUR TURN TO DISRUPT

We could sit on our hands and wait for the digital marketing industry to be disrupted.

Or we could invest in automation and outsourcing, focus on using our creativity and relationship-building skills, and ensure we’re future-ready.

But even better, we can go on the front foot and do some disrupting of our own.

The consulting industry has been largely unchanged for decades as well. Agencies are in a unique position to step into this area, and capture some value for themselves.

By positioning as problem-solvers and focusing on relationships instead of mere execution, agencies can position themselves more as a partner in solving business issues, rather than a service provider.

Keeping strategy at the heart of everything your agency does will naturally allow you to traverse the boundaries that typically restrain agencies.