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News & Views

Why agencies must mind the data gap

by Brett Davis
News
|
30th May 2019
Why agencies must mind the data gap, post image

Data-driven campaigns, not instinct, are now key to working out which half of your advertising is working, and which is not. Brett Davis, Managing Partner, US at Waypoint Partners discusses how agencies can evolve to put data at the core of their business.

After more than a decade working with marketing services companies, it’s evident to me that most agencies still haven’t got to grips with the potential of data analytics to transform and grow their business – or that of their clients. While many agencies sound persuasive when pitching their digital and data credentials, very few are structured to deliver on the promise. They haven’t invested, financially or culturally, in the people, tools or systems required to ignite data-driven insights.

In my view, this failure to collate, clean, structure and analyze data effectively can only bring about two end results for agencies. Firstly, an inability to deliver complete or accurate insights to the client – because the agency isn’t looking in the right places. Secondly, slow death as their role is usurped by younger, fresher, smarter agencies that intuitively understand how data can bring a laser-like focus to creativity, which in turn translates into genuine return on investment.

There are two types of agency that are especially vulnerable to this kind of self-inflicted obsolescence. One is the breed of large, well-established agencies that built their credentials before data analytics moved centre stage. The other is smaller shops that either over-promise in pitches (covering up the gaps in their offer), or which are reluctant to challenge or push clients for fear of losing business.

The Big Agency Culture Conundrum

For big agencies, the most pressing problem is how to integrate data analytics into a legacy model that is built around long-established vested interests. A classic scenario, for example, is when a piece of new business is won by commercial and creative teams that then want to keep the budget in their own departments, rather than allocate it to data analytics. This desire to protect their turf is understandable, given the profit and loss parameters that they operate within; but it generally means that data becomes a footnote at the bottom of a budget, rather than the fuel that drives the agency engine. And this invariably holds back the quality of creative and strategic thinking.

The solution to this logjam lies with the CEO, who needs to persuade the agency’s divisional leaders to support a data-driven culture for the firm. This isn’t easy, because it generally involves asking smart and charismatic sales, strategic and creative talent that have built the business to cut their cloth so that funds can be diverted away from the showmanship that drives agency attention towards data.

The situation is exacerbated by the fact that some will insist they are aligned with the vision. But actions speak louder than words, so interrogating whether they really are on message is crucial. This requires strong leadership, because it may lead to internal conflict and departures, perhaps the loss of accounts as clients follow gregarious, media facing execs out of the door. But challenging the status quo on data is a necessity for big agencies if they are to survive. Currently too many are still enamored with the analog ‘go with your gut’ approach that dominated agency thinking in the 20th Century. But the emergence of data analytics means that clients no longer need to accept the ad industry’s oft-cited adage that “half the money I spend on advertising is wasted, the trouble is I don’t know which half”.

The Small Shop Consultative Challenge

For small shops, many of which have been weaned since birth on big data, the challenges are more to do with maintaining and building the integrity of their data analytics offer – while generating enough business to emerge unscathed from phase one of their growth.

In my experience, it’s not uncommon for small shops to tell brands they can deliver a 360-degree data analytics offer when in fact their skillset is limited to one component such as social media. Small to medium-sized clients may not be sufficiently well-resourced to detect this problem – but it can lead to some problematic outcomes.

For example, presenting findings to clients purely on the basis of social media analytics risks only telling part of the story – presenting consumers in a self-aggrandizing, persona-building state of mind when deeper and more relevant insights might come via one on one interviews. Unless agencies are equipped to identify multiple data-based narratives and then distil their meaning, the risk is that there will be adverse implications for the client’s brand and business.

Responsible agencies may secure the work, then hire third parties to address their own skills gaps. But this presents its own challenge – namely that it risks diluting understanding of the client’s original intention. The more stretched the data analytics execution becomes, the greater risk of mission drift – which means the client loses out.

In this context, the tough call that small shops need to make is to raise these points with clients, even if this might jeopardize the pitch. They need to work out what is required to fulfil the client’s brief and battle for budget and resource. In some situations, this might involve brands that lack the resources to know what capabilities are available in terms of data collection/analysis. It may require recommending them to realign their brief to take advantage of what analytics offer.

As with our big agency scenario, speaking out may lead to push back – perhaps a lost pitch or two. But the midterm picture is one in which the agency takes on more of a consultative role and starts to build a reputation for delivering against its clients’ briefs. Once it has 2 or 3 strong case studies to show prospective clients, the negotiation about resource allocation becomes easier. Typically, agencies that take this approach will be ahead of their competitive set two years out.

Why Data Is Worth The Effort

Anyone who has had a chance to review the award-winning work from recent creative festivals will know that old clichés about data killing creativity should finally be put to bed. True, data usage in the wrong hands can be reductive and counter-productive, but there is a growing body of evidence that data can be used to achieve a range of goals from making stunts more engaging and effective, to developing personalized creative at scale, to bringing b2b campaigns to life.

The way Cannes Lions 2018 Gold Creative Data Winner Adam&Eve/DDB used genetic data to power a superb piece of creative work for Unilever’s Marmite was just one among many campaigns that underline the core thesis. It will be interesting to see how far this adoption of data-driven creative communications has advanced at Lions 2019.

Newer agencies showing the way include data science specialist Schireson, which has established its credentials working with brands like Amazon, Intel and AT&T. Another frontrunner is PMG, which helped Beats become one of the biggest brands last summer during the 2018 FIFA World Cup, despite the fact the brand wasn’t a sponsor.

Agencies like these are placing bets on the efficient and powerful ways of working that data analytics enables. This is the kind of intentional growth that agencies need – a mindset where digital disruption is an opportunity to flourish, not a battle for survival.

Connect with Brett on LinkedIn

First published in Martech Advisor

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