Agencies' Changing Role in Advertising

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By: Dwayne W. Waite Jr.

Each day some business professional or business journalist remarks how online and digital advertising is changing the way we do business, and the way businesses advertise. Each time, they try to get the attention of the industry by remarking not how business-as-usual will change, but how "traditional advertising is dead." The last example was a previous post about the referral network folks who thought that soon, only the losers will advertise, since referral networks will rise to be the best thing on the web since social media.

Easy, tiger.

However, we do appreciate those professionals who are using the traditional values of advertising and applying them to today's connected environment. Along with that, professionals who still see the value of agencies in terms of creative development, planning, and ad placement will hold our attention better than any tech upstart who thinks they can build a platform that makes advertising obsolete.

Financial Times writer Paul Taylor recently interviewed Tim Cadogan, chief executive of OpenX, an online exchange that adds a new flavor to ad buying and placement and increased value for advertising agencies (article may be gated, but with free subscription).

The article talks about what OpenX does and the rise of online advertising, and the dominance of search advertising versus the other kinds of online. All that is nice, but that isn't what caught our attention. The most interesting tidbits came towards the end when they talked about how agencies will fit into this model of online advertising. First, Cadogan remarked that he doesn't see much agency involvement in the display area (in terms of placement) because of the narrowing relationship between the advertiser and the publisher. We could agree with that, and it may be worth it for agencies to give that activity up, and use our comparative advantage and focus our teams on other activities.

Then, Cadogan talked about how agencies could take a bigger role as "real-time bidding" evolves. Note that we skipped over the RTB element in the article, because that is the service OpenX offers. Basically, it is a marketplace where businesses and advertisers meet to buy and sell ad inventory, real-time. Adding that to an agency's arsenal can keep shops competitive with media planners. Next, as we mentioned before, Cadogan sees the need for agencies in creativity, efficiency, and brand management for businesses that may not have the capability of doing it in-house. Also, he mentioned that the relationships agencies build with planners and publishers should not be overlooked.

As the agency model evolves, we must continue to look for new ways to compete. And notice that this activity won't force an activity to go "obsolete." Its just another wrinkle to the wonderful world of advertising.

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About the Author

Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.

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