Survival of the Fittest – Transparency and Efficiency through Systems.

Out the mouth of Chase’s Regional Director Asia: Anton Strydom

“Survival of the fittest” a phrase first coined by Herbert Spencer in 1864 after reading Charles Darwin’s book “An Origin of the Species” is as true today in 2018, as it was then. It is especially true for advertising agencies.

Agency insiders commenting on the industry today would often say things like “It’s really tough out there”, “Our People are working around the clock” or “We have to prove ourselves every single day”.

The theme may have always been true to some extent, however, with “transparency”, and “truth in advertising” being important themes these days, brought on by the commoditization of data on the one hand and new laws governing that data (both legislated laws like GDPR and non-legislated like bad PR by a Twitter mob).  “Proving Yourself every single day” is exactly what agencies must do if they are to survive. And they require facts and figures to back it up!

Internet platforms for example, have made huge technological improvements to provide marketers with better insights and control of how and where their ads are served. Twitter launched its Ads Transparency Center, and both Facebook and Google’s DoubleClick have made significant updates to their ad management and reporting tools recently. Other programmatic DSPs have been doing the same. This increased transparency and control is good for everyone as it enables improved results and thus a higher return on advertising spend.

The same level of transparency and technology is also expected by advertisers from their agencies. And unfortunately, most advertising agencies have been slow to update their internal systems to match these platforms.Advertisers today want to know exactly how the agency has spent their money. They demand clarity on results, but also a granular breakdown of their input costs, agency labour as well as ad placement costs.

And where internet platforms have improved, most agencies still rely on manual or outdated systems to piece this information together for client reports (think Excel spreadsheets). Many agencies, both independents and group affiliated, still tend to have a mix of disparate systems, often legacy software systems that don’t integrate with each other.

Successful agencies have always had a “do what it takes” attitude, which has allowed them to get by without efficient systems. The problem is that “do what it takes” does not scale and it could take days and multiple staff members to figure out profitability for a specific client or project.  Monthly retainers end up being a continuous stream of burnt hours. All this leads to further reactive decisions and ever-tightening margins.

Agencies that embrace modern internal systems can empower their staff with timely, accurate information that can report advertising results in a transparent, informative way to their clients, thus making proactive, well-informed decisions.

For example, Kim Olivier of TBWA notes after a recent migration to Chase Software, a modern agency solution “Now, all users are on the same platform end-to-end, and consolidating information for reporting purposes happens extremely quickly. Users are now in a modern, efficient solution which has enhanced their capability to do their work more rapidly. TBWA are constantly finding efficiencies within the solution”

Some of the reasons for not updating an agency’s internal systems might be that the disruption of rolling out a new system might be inconvenient and disruptive, or perhaps constantly tracking staff’s time could be detrimental to creativity, or perhaps spending money on a new system when advertising budgets are shrinking might be difficult.

I would argue that the alternative is much worse.

Only the fittest will survive.