Although advertising isn’t going away, free standing agencies might be. IBM just acquired three of them in one week, beefing up its own 20-year-old in house agency. Deloitte Digital and Accenture have also done acquisitions recently. Not so long ago, Deloitte and Accenture were strategy consultants, and before that auditors, while IBM sold technology services (and before that personal computers, and even longer ago typewriters and calculators).
You already know what this flurry of acquisition means; it means strategy and analytics have reach a point of equality with creative in the minds of brand marketers. It also means the core skills of the Big 4, accounting and auditing, are also very important in the measurement of ad campaigns. Marketers know they need to take all the data they’ve been warehousing for years and mine it more intelligently, but they’re not used to looking at an ad agency to perform those that task. Moreover, IBM wants to put its Watson capability to work in some new areas, probably in competition with Oracle’s Marketing Cloud, which Larry Ellison tried to explain at the IAB Annual Leadership Summit. IBM already has a partnership with Adobe and its marketing cloud. The business of the agency is transitioning to the tech consultant.
Watching the giant consultancies move in the direction of marketing strategy and implementation is a reminder of how much the advertising business has become dependent on the correct use of targeting based on customer data. And publishers and marketers cannot afford to get their targeting wrong in the age of ad blocking, because if they don’t serve relevant and compelling ads, the threshold is very low on the consumers’ patience. Despite the fact that Google removed an ad blocker designed for Samsung phones from its Play store, customers who want to block ads will find a way. An easy solution is to use better data to deliver fewer, more relevant ads.
We can’t forget that IBM also acquired the data from Weather.com, useful to advertisers as consumers access information on mobile devices. Now if you are an advertiser and want to know when to run your ad for hot dog buns in Chicago, you can use weather data, geofencing, and your own consumer data to find out if next Wednesday will be a good day to deliver a mobile ad.
The free standing agencies are at a disadvantage here as data becomes pivotal in every ad campaign.