As published in Ad Age
In the 2000s, agencies were profitably mastering “quality” niche marketing with “new” media like cable, direct marketing and customized print.
By 2013, ad tech almost wholesale displaced “quality” in favor of “quantity.” Clients began to value “predictable scale” more than the unpredictable outcomes of “quality” advertising. In the quality-versus-quantity battle, the quality camp has been on the defensive.
But the real change today is an emerging business model around quality scale.
In a reversal of fortune, the quantity side of the business is on the run, and for good reason. The collapse of ad tech-buying platform Rocket Fuel’s share price — from a high of $65 at IPO to $2.60 at its recent sale — proves that “quantity” alone can’t generate results like those from well-crafted campaigns.
This presents agencies with a rare opportunity to rebalance the quantity and quality equation of marketing into a new business model — where “quality scale” can deliver both scale, precision and new agency revenue.
Agencies are the industry’s best hope for a transformation towards quality scale (and their best shot at profitable growth).
This shift centers on the artistry needed to balance both data and content, while being sensitive to audiences’ digital mindset. Operationally, this means an adjusted landscape with fewer impressions, fewer cookies profiles and fewer blind arbitrage, but higher CPMs, better quality clicks and better overall business results.
The “quality scale” business model is achieved through agile execution, real-time data and creativity. It leverages these strategies:
1. Right-size impression goals
A right-sized scale strategy measures real people engagement in the thousands, not millions. To scale meaningful client results, use technology to scale the number of high-quality, albeit with smaller campaigns. Programmatic content marketing, for instance, is a platform that can achieve quality scale profitably.
2. Right-size performance metrics
Performance-based compensation is not a new idea, but agencies have long resisted it for good reason. But well-applied technology can help agencies add ROI value through real-time data like “instant brand polls” among digital audiences who just saw a brand ad. Agencies gain a lot of trust when they move to a blended, performance-based compensation because quality will always prove it’s worth over the long-term, and long-term brand/agency relationships are profitable relationships.
3. Right-size operational agility
The primary road to profitably for agencies is deploying more kinds of campaigns using diverse technologies. But ad tech isn’t easy to understand and, more troublesome, tech isn’t easily absorbed into agency culture. One way to tackle the problem is through agency-wide, hands-on experimentation over a period of months, covering a few core technology areas, such as chatbots. Consistently executed, agencies will develop diverse teams with specific expertise in monetizable disciplines.
4. Right-size user experiences
Platforms aren’t sensitive to the fine line between creepy advertising and advertising that is welcome. Designing campaigns that merge online with offline activities into trusted engagement experiences provide agencies new revenue potential. For example, with business-to-business clients, “brand to demand” campaigns can link trade events with online activity. Platforms can’t design a frictionless blend of media, tech and data into highly engaging experiences. Only agencies can.
Agencies missed the business opportunity during the first ad-tech boom. Now is a rare second chance for agencies to stake their financial claim in the coming era of quality scale marketing. If agencies let this moment pass them by, there may never be another chance.