Agencies Reshuffle for Real-Time

This is the third installment in our series, Fixing the Agency Model, a look at how agencies are innovating and reinventing themselves. Sponsored by Harvard Business School, Executive Education.

“Real time” is the newest buzzphrase of the online marketing world. All of a sudden it’s essential for brands to be reacting quickly to cultural events and trends, and injecting themselves into the online conversations taking place around them.

For agencies, that represents both challenges and opportunities. On the one hand, they’re having to figure out how to structure and staff themselves in ways they haven’t previously, but on the other, it’s giving them the chance to prove day-in, day-out value to clients, in the face of continued downward pricing pressure and commoditization of their other services. In other words, they can smell the money.

But adopting this “always-on” mentality requires changes. Perhaps the biggest one is leaving behind the campaign-cycle mentality they’ve been fundamentally structured and built around, and adapting their own internal cultures and processes to cope. It also means hiring different people than those usually found in the agency environment.

“It’s a complete operational blow-up,” said Deep Focus CEO Ian Schafer, whose agency recently launched a newsroom-style content unit it calls the Moment Studio. “Typical agency models don’t support this; they’re not built for always-on communication, so the only way to do it effectively is to build a new model. It’s a company within a company, essentially.”

The studio pumps out content for a range of clients and charges them for each piece of content, as opposed to billing hours. According to Schafer, that makes it more lucrative than the traditional agency model because it capitalizes on an economy of scale. It’s the only area of the agency’s business seeing growth in profit margin as other aspects continue to get squeezed.

Digitas has taken a similar approach with its own real-time unit, dubbed BrandLive, which puts programs together for clients to play in the real-time content arena. Each BrandLive engagement is customized based on client need, and each has a different financial structure. But Anne-Marie Kline, who heads the unit, said the agency is already seeing an upside from it. “There’s an opportunity for agencies here,” she said. “I do believe there’s a chance to make money from real-time as long as it helps solve client problems.”

It’s early in BrandLive’s inception, and that means not all of the people working on that side of the business are dedicated exclusively to it yet. But as demand picks up, Kline anticipates being able to support fully staffed, perhaps brand-specific teams for the initiative. That said, it’s still a challenge finding the right talent to fit the roles and to deal with the pressure of day-to-day deadlines.

“It’s not the normal creative process where you’re presenting to clients every two to four weeks; it’s every day,” she said. “It’s different and a little messy.”

As a result, Digitas is looking for different types of people to work in that division than it might to work elsewhere at the agency: people with the same cultural sensibilities and interests but perhaps slightly different backgrounds and experience. “The characteristics of these people aren’t necessarily changing, but the job description and experience we look for is,” she said.

Deep Focus has taken a similar approach with its Moment Studio staffers. Many come from publishing or production backgrounds, as opposed to marketing ones, and Schafer said he can envisage hiring journalists and comedy writers down the line. “We couldn’t apply the talent we already had on staff to this; it’s a mix that agencies just haven’t typically been hiring.”

But structural and and talent issues aside, the biggest hurdle for agencies looking to get into the real-time game remains the clients, agencies report. In order for any high-metabolism content initiative to work, clients have be structured in a way that will allow it to. That means agencies need to convince clients of the importance of approving pieces of creative in hours, as opposed to days.

It’s essential to get stakeholders from departments like legal on board from an early stage, they say. If they’re not prepared to compromise, then it’s a non-starter.

“You need a client who gets it and has the vision to see it through,” said Glow Interactive president of digital communications Howie Kleinberg. “Barriers abound here — internal cultural change and acceptance, creative approvals and legal approvals all must be addressed client-side to clear a path for success to truly achieve a real-time strategy.”