Navigating the transformed digital landscape: A guide for media agencies

Brands turn to their advertising agencies for advice on how to manage digital transitions, but these agencies themselves are not immune to disruption. A recent study conducted by researchers from the University of Michigan and Harmelin Media explored how media agencies could effectively incorporate new technologies. M.S. Krishnan, a professor of technology and operations at the University of Michigan, and Brad Bernard, SVP of innovation and marketing at Harmelin Media, share a brief summary of their findings.

The impact of digital technologies on the landscape for brands has been significant. The remarkable growth of e-commerce, video streaming, influencer networks, AI-enabled interfaces, new privacy regulations, and various other digital disruptions means that companies need to quickly adapt or risk failure. Media agencies are not exempt from this trend, as digital disruption ushers in new expectations and challenges that older agency models may not be equipped to handle.

The University of Michigan's Stephen M. Ross School of Business, in collaboration with Harmelin Media, conducted a study to understand how the media agency model has been affected by digital disruption and what agencies can do to ensure they are well-positioned for success as the bedrock of marketing and media keeps evolving.

In October 2021, researchers from the University of Michigan interviewed leading figures at the 40-year-old media agency, which has weathered over 25 years of digital disruption, to learn how they adjusted their model to maintain the quality and relevance of their service and preserve long-term client relationships.

Hiring the right people is crucial

The researchers' most significant findings concern the seemingly straightforward process of hiring. Recruiting and retaining high-quality talent is vital for any agency, especially in this era of rapid digital evolution. For Harmelin, it's critical to hire individuals who not only comprehend data, technology, and the digital realm but also possess certain ideal personality traits.

Harmelin's staff turnover rate is roughly a third of the industry average, and their average employee tenure is 6.4 years, according to LinkedIn data, which is more than double the average. Among various recruitment strategies, the agency has had success hiring individuals who are notably curious.

As digital platforms are perpetually changing, having staff who are open to change and eager to learn positions media agencies for success. Agencies must also nurture this talent, through training and promotion, to foster client trust in their capacity to adapt to change and capitalise on emerging opportunities. Moreover, investing in people enhances retention as clients value long-term connections with a consistent agency contact rather than having to establish new relationships each time the agency experiences turnover.

The future agency model should involve everyone.

The agency, the client, and the media vendors need to work together on strategic plans to tackle complex business issues. These partnerships must be founded on transparency, as each partner contributes their own processes to the discussion. Encouraging a transparent relationship among partners enables each party to contribute and bring their unique and invaluable strengths to the table, which subsequently leads to success for all involved.

Adopt flexibility

Digital transformation also offers opportunities for agencies to expand their businesses by taking on tasks that weren't previously part of client contracts. In the traditional agency model, contracts meticulously detail an agency's scope of work. However, with the evolving demands of digital transformation, future contracts should aim to enhance flexibility so that addenda aren't necessary for every adjustment to the scope of work.

Contracts should be linked to the value an agency provides, says Scott Davis, chief revenue officer at Harmelin. This approach leaves the door open for agencies to extend their scope of work with digital developments, rather than amending existing contracts every time the scope changes.

Lastly, agencies should strive to improve the speed and flexibility of their work to focus less on day-to-day tactical duties and more on devising innovative solutions. This could be achieved by developing internal tools that offer both the agency and client insight into business performance.

For instance, Harmelin has created a tool called GeoViews, which collates media, sales, and market data into a single dashboard, simplifying and accelerating data visualisation, insight generation, and action-taking. These types of internal tools automate previously cumbersome tasks, allowing agencies more time to delve into their client's businesses and solve business issues.

Digital transformation will persist in disrupting the way media agencies function, necessitating continuous adaptation. Media agencies can evolve alongside digital technology to present themselves as strategic and competent partners to their clients by hiring and developing the appropriate talent, cultivating partnerships rooted in transparency, prioritising contractual flexibility, and utilising internal tools that increase their pace and efficacy. By accepting digital transformation and adopting new business practices, agencies will prepare themselves for lasting success.