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May 31, 2016
Game of Thrones: The Advertising Version
 
The Mathmen are challenging the Madmen for primacy and market share in advertising and marketing. A colossal battle, now shaping up, will determine the future of agencies and the future contours of the business. “Big data” isn’t just a marketing tactic, a buzzword, or a budding trend; it’s the rebel yell of the charging Mathmen.
 
Take a look at the contenders.
 
Traditional Creative Agencies have been struggling to talk the talk and walk the walk for several years. Most have the rhetoric down pat. But even after adding Chief Digital Officers, hiring data and CX guys, learning code, and pointing to group-level digital and data-centric acquisitions, the business model and the creative paradigms and the souls of these agencies have shifted very little. Culturally, these agencies aren’t far from the Madmen of yesteryear.
 
And while there’s a competition to announce digital revenues, the breadth of digital and data work, the notion of iterative two-way consumer conversations, the integration of social, video, and mobile are far less than advertised. Traditional agencies are at competitive disadvantage in the tech-savvy labor market and have difficulty managing digital and data players because their superiors really don’t understand the basics. Financial discipline, fine-tuned scoping, and the ability to correlate strategic and creative inputs to successful client outcomes is elusive.
 
Pure Play Digital Agencies have an inside track on technology, digital media, and the tech behind social and mobile. But they lack the strategic chops and mature account relationship discipline to move up the food chain. They are hiring brand strategists and older seasoned account leaders, competing with Adtech vendors for technical talent and touting analytics, which are mostly using the reporting tools built into DSPs, social and mobile platforms. A few, notably perennial first mover R/GA, have branched into TV as well.
 
These agencies, many owned by the big four traditional networks, have integrated multi-channel thinking at the core, so much so that they frequently don’t understand or sync with traditional offline media. Too often they are not the lead agency and are stuck adapting a brand posture or campaign platform, usually on tight timetables, that didn’t account for organic digital channels when the key concepts were formulated. Skilled at playing catch-up, they have a better spiel and better case studies in social and mobile than their traditional agency peers. And they have high energy, youth, and fire in their bellies.
 
Data Providers & Processors like Epsilon, Merkle, Harte Hanks, Acxiom, Targetbase, and others have bolted on creative and strategic capabilities to deep core expertise in all things data. They hold, operate, and analyze databases for large-scale clients in financial services, hospitality, airlines, pharmaceuticals, telcom, automotive, and retail. Many of them own clients’ internal production and automation processes, which gives them a unique perspective on campaign execution and performance.
 
These guys own a high-visibility position of trust because they are guardians of clients’ “family jewels.” Frequently embedded in client organizations and locations pushing at the edges, they are skilled at picking off lower level or quick turnaround assignments or combining creative, data, and production by deploying lower cost and mechanically efficient systems. And while traditional creative directors might look down their noses at the creative product, for many of these regulated or conservative clients good enough is good enough. Controlling the data also yields insights into customer sentiment and behavior that these guys use to open doors, expand their reach, or make a play for traditional and digital agency business.
 
Big Consultants, the likes of Deloitte, Accenture, IBM, or PwC, are acquiring creative and digital agencies and merging them into their operations. Leveraging their long-standing connections in the C suite at Fortune 500 clients and their key role in defining and/or implementing IT, marketing, and business strategy or systems, these guys are moving from deck writing and advice-giving into marketing and advertising execution.
 
They aspire to become the single source for strategy, ideas, creative, analytics, data, and multi-channel execution. At the moment they aren’t fully competitive with traditional or digital agencies but they are well financed, well led, have disciplined control of scopes and finances, can scale on a dime, and can arbitrage costs across geographies. And they are highly motivated to eat agencies’ lunch. They can do studies, surface insights, marshal learnings. aggregate best practices, and grab headlines (think Watson) in ways that agencies can’t.
 
This is Game of Thrones; the advertising version. Look for the kingdoms to jockey for people, posture, and projects. Don’t be surprised when market share, especially among the biggest clients, begins to shift away from the Madmen.

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Danny Flamberg, EVP Managing Director of Digital Strategy and CRM at Publicis based in New York, has been building brands and building businesses for more than 30 years.Prior to joining Publicis, he led a successful global consulting group called Booster Rocket, as Managing Partner. Before becoming a consultant, he was Vice President of Global Marketing at SAP, SVP and Managing Director at Digitas in New York and Europe and President of Relationship Marketing at Amiratti Puris Lintas and Lowe Worldwide.
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