Dramatic change is coming to the marketing-services industry, but it won’t be driven by Madison Avenue, or by the industry leaders you read about in the trade pubs. Those firms, while necessary to meet the needs of larger enterprises (for now), are essentially irrelevant to the innovation that will transform the industry. 

In the era of integrated services, the disruption will come from an unknown class of emerging hybrid firms. These agencies build scalable infrastructures that enable them to readily adapt their business models and services to changes in technology, consumer behavior and market demand.

“Something or someone will eventually come along to disrupt your agency, so it might as well be you.” The Marketing Agency Blueprint (Wiley), Chapter 9

The Case of Instagram . . . and Its Application to Agencies

Disruptive innovation is nothing new, but the rate at which it occurs has accelerated. Consider the case of Instagram. In 551 days (that’s how long the company existed), a small team of engineers built a mobile photo-sharing application that was acquired by Facebook for $1 billion in cash and stock.

So how was this start-up, with 13 employees and no profit or revenue to speak of, able to do something that the industry’s behemoths such as Eastman Kodak, Canon, Nikon and Olympus, among others, could not? 

They had vision, a willingness to fail and a culture of innovation that drove them forward, all rare traits for traditional agencies.

“It’s a little like asking why Hasbro didn’t do Farmville, or why McDonald’s didn’t start Whole Foods,” said Michael Hawley, formerly of the Media Lab at the Massachusetts Institute of Technology and Kodak board member. “Cultural patterns are pretty hard to escape once you get sucked into them. For instance, Apple and Google are diametrical opposites in so many ways, have all the skills, but neither of them did Instagram, either.” — Disruptions: Innovation Isn’t Easy, Especially Midstream by Nick Bilton 

The Disruptor Advantage

The unknown is one of the most exciting things about being an entrepreneur. It’s the adrenaline rush that comes from taking chances and venturing down the road less traveled. That is the disruptor agency advantage. These organizations, by their very nature, are risk takers. They thrive on change, easily tire of tradition, and pride themselves on their agility.

These emerging firms have less to lose than their larger, more conservative competitors. They are building new, hybrid agency models from the ground up. They don’t have the restrictions of legacy systems or the internal politics that hinder change. They have flexibility in their pricing, lower overhead costs, and more dynamic and versatile talent.

Disruptors need to be willing to take risks the established agencies cannot or will not. 

Meanwhile, traditional agencies must acknowledge that something is wrong, be willing to fix what is broken, and return to the ideas and inspirations that made them great. They have to think and act more like start-ups. They have to become disruptors themselves.

Read More

• 5 Ways Hybrid Marketing Agencies Will Transform the Industry 
• Marketing Agencies Fail to Evolve as CMOs Seek Integrated Digital Services