Mumbai: To succeed in the future agencies will have to index work to outcomes to command a premium. The focus should not rest on delivering 100 social media posts as that takes the agency away from a client’s P&L. The conversation should be about the value that an agency can deliver for a client. Then the agency can ask for a share. Also agencies will also have to create an environment where younger people are comfortable and thriving.
On the third and final day of Goafest 2024 a Knowledge Seminar presented by Malayala Manorama in association with MIQ, titled Adaptability And ‘Innovation: The Cornerstones Of A Future-Ready Agency’ featured a panel of industry leaders. They were Anusha Shetty, chairperson, group CEO Grey Group, India; Arun Iyer, founder, managing partner Spring Marketing Capital; and Babita Baruah, who is VML India CEO. Steering the discussion was Dheeraj Sinha, Group CEO for India and South Asia at FCB Group India. In this session, the panellists explored the vital role of adaptability and innovation in shaping the future of agencies, where the next generation is concerned.
Sinha noted that advertising isn’t dead. The aim of the session was what need to be sorted. The session tried to find answers to issues like why salaries are at the level of what an Uber or an Ola driver earns and why the industry struggles to attract young talent. Young people have to be put in front by agencies he noted. Agencies should focus on solving business problems for clients and not focus on social media posts. He posed the critical question, “What questions should we be asking wherein talent is concerned?”
Iyer responded by highlighting the need for inclusive environments, asking, “Are we creating agencies where younger people are comfortable and thriving? Are they happy working in agency structures that we have created in the past? Do we need newer structures for them? Empowerment becomes important” What he sees changing is the fact that the whole idea of creativity has to be de centralised. Decentralisation leads to democratisation. One has to forget about vertical pyramid structures. One needs to have decentralised structures where talent can sit in smaller towns.
Shetty, then, addressed the generational shift in workplace expectations, stating, “I hear from senior leaders about culture missing. But the truth is GenZ is the largest workforce today and they want flexibility; 85% of GenZ wants a hybrid work situation. Are we as seniors ready to accept this?” She emphasised the importance of adapting to the needs of younger employees. She noted that agencies have to adapt to how GenZ wants their workplace. GenZ wants a hydrid environment if not WFH. But senior leaders want people to come in the office and that is their dream as they feel that the culture is missing. But GenZ does not want to come back. Life she noted has changed completely. She also spoke about increments and young people are not shy to come back and ask for more unlike her generation. GenZ she said will not be loyal. They will stay for two years and give their best. The goal for an agency should be to think of different ways to handle remuneration like creating wealth for them. GenZ wants the good life along with flexibility and freedom. GenZ has seen their parents have a hard life.
Additionally, Baruah added, “Simple things like setting younger people up for success and fostering a sense of belonging are crucial. Allowing expression and embracing them is key.” The discussion underscored the need for senior leaders to evolve and create supportive, flexible work environments for the new generation. Baruah noted that good practices were a part of the industry to induct new people and these practices were let go off. Simple things like setting people up for success like explaining to them the culture of the place are important. Young people she said like to have a sense of belonging to a place.
Also where agencies are hiring from is an issue. Is the focus only on hiring people who are good with expression, writing and engaging with clients or are agencies actually looking at tech world skillsets? She noted that there is no difference between a mainstream and a digital team. “It is all one. How are we making that change? Otherwise youngsters don’t feel that they are part of the change that is happening.” Her agency focusses on these areas.
Iyer said that young people are more transactional. Also when they work in agencies is the environment a tired, overworked environment? The session noted that agencies should be agile and young at heart. Sinha asked if there is enough of a focus on having the right structure, is a money pool being created? This conversation he said is very important.
On the remuneration front Sinha said that there are challenges like a client saying that another agency is charging 30 percent less. He feels that work must be indexed to business outcomes. It could be about growing revenue on the back of running a campaign or growing a brand’s share of voice to solve the challenge of penetration. Then you can charge a premium. The problem is that agencies link themselves to creating social media posts. That does not get back to a P&L conversation. Iyer feels that way forward is to follow the lead of consulting firms. They put up the value of what they create before setting out the budget. They work on the idea of value creation. Agencies he said are in trouble as long as clients put them in the cost bracket. Agencis have to explain the differentiated value that they will create for a client compared to competition. “We need to learn better from consulting firms who have done that. CEOs are happy to put money on the table if they can see the value. That is where agencies have to get better. We have to ask ourselves what is the value that we are creating?” Shetty agreed that agencies should conduct themselves as consultants and go beyond order taking into a much more conversation mode.
Agencies she noted need to do research before going into meetings with clients. The younger employees she said need to be trained in terms of doing research, test a hypothesis in small ways, have a point of view. Then the agencies value will be driven in a client’s mind. Currently the situation is very transactional unless a senior person form the agency is present in a meeting. The way an agency approaches and talks to a client at all levels needs to improve. Teams should be taught to be more consulting, thinking in nature to offer better solutions for clients and get paid better.
Baruah noted that an agency has to ask itself what it is doing that a marketing person cannot do sitting in front of a computer. Can an agency feel it better? Do clients also feel that the agency can do it better? Earlier agencies had this and it came on the back of very strong strategic planning and there was an understanding of what the human truth was. This then translated into very strong creative ideas combined with very strong media planning. On the other have the budgets are not there to get really strong thinkers like earlier. Technology solutions can be used by agencies to help clients understand about where they should be spending money and how it will impact their business and growth.
Iyer noted that to stay profitable leader agencies have to hold on to pricing. The challenge is that the entry barrier to launch an agency is low.
