Friday, May 9, 2014

Are ad agencies becoming commoditised?

A fascinating debate took place on Twitter last night, initiated and facilitated by the team at Adlip, on the subject of whether "agency services have become mere commodities".

It was short, sweet and full of as much insight as one can get across in 140 characters. (Read the full #Adlip Talk Twitter TL here)

The general answer, was "no, well, maybe, but.." It was an industry view, and missing the voice of the one person who really can answer: the marketer him or her self.

Of course there is no Yes or No answer to this question. Frankly, a lot depends on the agency's abilities and on the marketer's skills. But the question that does have a simple answer is "has the business changed"? Yes it has. There are a myriad options available to marketers - but that in itself is not necessarily a good thing for them.

What is happening, especially given South Africa's small market, is that each agency wants to capture as much of the pie as possible, so that many agencies are trying to do all things for all people.

But if we all do the same thing, we do become commodities, and it does become a case of "well, I can get exactly the same thing from those guys, for cheaper. Cool."

Agencies spend their days crafting strategic positioning for clients, marking competitive territory and helping clients defend it. When it comes to their own, they are the cobblers kids with no shoes!

There is even a comic book on it! 

There is no marked differentiation among the major players. The ones that do have a differentiated spot soon begin looking over at the others and wanting to be more like them. The reason that there is commoditisation is that the clients perceive all agencies to look the same, and do the same.

From Auditing Your Agency's Business Model - see below

To makes sense of it all, I came across this slide show by the hugely insightful Tim William, on how to really decide what your agency is and does, for whom, in which channels. It's called Auditing Your Agency's Business Model. Take a moment to read it, and even better, take a moment to run through the exercises and charts with your Exco.

Then - make a stand that creates a differentiated, desirable, defensible (and profitable) positioning in the market. Stick to it. And better yet, communicate it and deliver it. Commoditisation gone.


  1. It is very interesting. You should have a read if you haven't already. Loosely, it's about the notion that it takes a lot of effort to do brave work, and that people are naturally disinclined to put in that effort if the chances of the good work being used seem slim.
    It's especially interesting if you read the comments, there appears to be a lot of disenfranchised creatives out there, who appear have given up on producing good work and are just phoning it in.
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