Smart Agencies Understand the Partnership Imperative

In January 2008, Maurice Levy, CEO of Publicis Groupe, and Eric Schmidt, CEO of Google, shook hands on the terrace of the Publicis building overlooking the Arc de Triomphe in Paris. Their agreement, to join forces and partner in the deployment of new digital advertising technologies, kickstarted a radical transformation in the way that large agencies work with technology companies.

For decades agencies have been the masters of delivering effective advertising campaigns at the best possible value for their clients. A key strategy to achieve this was to maintain an arm’s length (some would say, adversarial) relationship with media owners to preserve objectivity and a strong negotiating position. The slow pace of true innovation in traditional media meant there was little pressure for this to change: agencies’ fluency in offline media required little 2-way interaction with media owners beyond discussions over pricing and tactical proposals.

However, the explosive growth of digital marketing over the past decade, and the associated emergence of Silicon Valley’s fast-moving technology companies, has instigated an urgent reappraisal of this adversarial mindset by the leaders of the world’s largest agencies. The increasing importance of data analytics as a key component of agencies’ service offering, combined with the lightning-paced evolution and technical complexity of the new digital marketing platforms, means that a closer working dynamic with technology companies is no longer an experimental initiative, it has become a business imperative.

When Maurice met with Eric in Paris in January 2008, which was also around the time I joined Google, Google’s product suite was largely limited to Search and our display network. Just three and a half years later, the conversations I have with agencies now cover mobile, online video, social, ad exchanges, global ad-serving platforms, rich media advertising, DSPs, analytics, real-time insights tools, data platforms and even enterprise software.

The pace & scale of change is truly mind-blowing:

• In 2008 Search accounted for just 3% of all media investment in the US and Western Europe. Just 3 years later this has tripled to ~9%. In UK, Search now represents at least 15% of all ad spend.
• Android has grown from zero to over 550,000 new activations per day in 3 years and, with iOS, is radically transforming how advertisers can engage with customers through mobile devices
• YouTube now streams 3 billion video views per day, double the volume just 18 months ago
• Facebook, Twitter & Google+ together have close to 1BN users globally, 50% of whom log on every day, half of these through mobiles
• In just 18 months, Ad Exchanges, DSPs and Agency Trading Desks have revolutionized the way display media is bought, challenging the business models for hundreds of existing display networks
• Google announced over 350 major new products or feature changes over the last 12 months alone, an average 7 per week. (To see what these were, visit www.google.com/newproducts)

As a Googler, with full access to our internal resources, it is a huge challenge to maintain my own knowledge of all these technologies and the associated opportunities they afford marketers and agencies. For agency account leaders, planners and buyers, who also have to be fluent in a similar suite of products from dozens of other digital companies in addition to all forms of traditional media, it has become truly impossible to remain true media ‘experts’. Every new layer of complexity created by technology evolution creates an even deeper requirement to nurture and build strong external partnerships. As Rishad Tobaccowala of VivaKi recently commented, “The world is too complex and moving too fast for any one company or team to do it all. We need to train people who are cross-bred and hybrid and who are willing to work together.” Tight-knit day-to-day collaboration at account team level with technology companies like Google have now become a necessity for agencies to keep up with all the potential options for connecting advertisers with their customers.

Many advertisers have also come to the same conclusion. A key component of many major media pitches recently has been the requirement for agencies to demonstrate the strength of their partnerships with Google and other players in the digital ecosystem, and how they can use these relationships to deliver additional value to their clients.

Smart agency leaders like Jack Klues, Laura Desmond and Steve King have realised that a close global partnership with Google would help their agencies to stay ahead. Today our global partnerships with VivaKi, Starcom Mediavest and ZenithOptimedia deliver immense value beyond the technology collaboration originally envisaged by Maurice & Eric in January 2008:

• Our industry experts provide deep insights into consumer & market trends that illuminate new consumer engagement opportunities for agencies, enabling their clients to lead rather than follow
• Our display, mobile & video experts work with agencies to create innovative, high impact campaigns for advertisers by pushing the boundaries of what is technologically possible
• Our product managers help agencies to understand and prepare for new marketing opportunities generated by technology change
• The joint research studies we publish each year with agencies deepen our understanding of consumer behaviour in this new digital realm and deliver the proof points needed to encourage advertisers to leverage these new opportunities
• Our training initiatives and digital media certification programmes, covering everyone from the top CEO to entry-level graduates, are helping the agencies to maximise the ROI from their digital campaigns and keep their teams operating efficiently and effectively
• Our ongoing partnership with VivaKi’s Audience on Demand trading desk is helping agencies & their clients to improve the performance of their digital campaigns through superior buying processes.Yet despite all this, as I talk to agency leaders around the world, both inside & outside of Publicis, I still occasionally get asked what the value is to an agency from working with Google.

Agency leaders who have not yet figured this out, who are not actively encouraging their account teams to build a deep collaborative partnership with Google, may soon discover they are at a significant disadvantage to their competitors in this fast-changing market.

Simon Birkenhead is Google’s Global Business Leader for Publicis Groupe

[This article was originally published as the 100th article on the blog of Marco Bertozzi, EMEA MD of VivaKi. See original posting here.]