The Cannes Lions festival is designed as a celebration of agencies and their work. But increasingly it’s serving as a stark reminder of their mounting challenges.
Much of the chatter this week around the festival’s bars, restaurants, yachts and event spaces revolved around a common theme: If and how agencies are going to stay in business.
That conversation isn’t a new one, of course. Agencies have been struggling to fight disintermediation and maintain relevant for years. But there was a distinct feeling at this year’s festival that the situation is reaching a tipping point. Clients are taking more of their marketing functions in-house, large platforms are making media agencies less necessary and publishers and consultancies are eagerly stepping in to fill the gaps.
Concerns have been mounting for years, but the threats to their business models now seem to be coming thicker and faster than ever before.
“I don’t know what we’re going to do,” one agency executive told me in Cannes this week. “Hopefully by this time next year we’ll have figured out another way to make money.”
Though the challenges are numerous, the consensus remains that consultancies may pose the largest threat agencies’ futures. And that’s a view held by many agency staffers in addition to just those with interests in agencies’ decline.
Smelling blood, reps from consultancies including Accenture, Deloitte and IBM iX flocked to Cannes this year in greater numbers than they have previously, and of course borrowed some agency tricks to get marketers’ attention, including parties on boats and dinners in the hills.
And despite what consultancies may say publicly about avoiding media buying and similar services because of potential conflicts of interest, in reality it’s only a matter of time before they attempt to bite into that pie too, offering technology and tools of their own, if not services.
The in-house trend is causing major headaches for agencies too, and in some potentially unexpected ways. Even if clients decide not to go in-house, many have at least considered it. That’s leading them to push their agencies harder to achieve the type of efficiencies they believe they could in-house, even if they haven’t tried.
Meanwhile, the rise of brand-safety and transparency concerns is leading marketers to probe their agencies and scrutinize them more than ever which, ultimately, eats away at their margins too.
Agencies won’t disappear anytime soon. And of course many are pivoting to offer more consultancy-like services in attempt to stay useful. But it’ll be interesting to see if, by this time next year, they have any new ideas. Or if agency execs will continue venting the exact same frustrations over glasses of rosé at next year’s Cannes Lions festival, if they attend at all.
Can Snap make it as an AR company?
The real question Snap faces is whether adding AR elements to its platform will help it continue growing in the face of competition and uncertainty.
How NFTs could evolve for brands — now that marketers know what they actually are
NFTs are finally growing out of crypto novelty into next-gen loyalty tools. Tyler Moebius, founder and CEO of SmartMedia Technologies, explains where else they can go.
Why digital clutter is driving brands to rethink the value of newspapers advertising
GE, Equinox, Take 5 Oil and agency TBWA New York are among those investing in newspaper ads to generate social media buzz in an ever-more cluttered digital environment.
SponsoredHow ad tech is tackling waste by optimizing supply chains
Sponsored by Bidtellect The programmatic and digital advertising industry is well aware of the inefficiencies in buying and selling — from auction duplication and volume bias to multi-integrations and reselling — but how did it get this out of control? How can we fix it? A redundant, multiple-step process to ad delivery has become the norm, […]
The ‘retirement’ of M&M spokescandies raises questions about viral marketing, edgy content
Marketers have mixed feelings and questions about the value of viral, stunt marketing after M&M's "retirement" of its spokescandies.
With TikTok’s growing list of issues, should marketers think twice about the platform?
There is a growing list of issues that TikTok needs to resolve, but marketers seem unfazed and continue to be enthralled by the platform.