Jason Bloomberg
Opinions expressed by Forbes Contributors are their own.
For those of us in the technology world, digital is a technology concept – customer-driven technology to be sure, but still about the ones and zeroes in the end. Ask someone in the advertising industry about digital, however, and you’ll get a very different answer. It’s about the transformation of branding.
“Colors and the emotional aspect of what a brand represents – those days are gone,” says Eric Pilkington, Chief Digital Officer at McCann Health, a McCann Worldgroup agency, which is owned by advertising giant Interpublic Group IPG +0.00%. “It’s a different form of branding. It’s very experiential – building a series of experiences.”
Technology still plays a central role in the move to digital, of course, even for ad agencies. In fact, the digital road is one they’ve been down before, as the web forced agencies to reinvent their business models back in the 1990s. Now with the rise of mobile technologies, such reinvention is once again in the cards.
“Technology is extraordinarily disruptive,” admits Pilkington, who rode the dot.com wave at companies like WebMD. “But digital is not just the inclusion of mobile.”
To explain this more-than-mobile context for digital, Pilkington provides General Motors GM -3.13% as an example. Over the last few years, Interpublic wrested partial control of the lucrative Chevrolet account from competitor Omnicom Group OMC +0.00%, with digital a key element to the new strategy.
“GM had to go through a total transformation,” Pilkington explains. “It was all digitally led – hundreds of web sites, programs, and data-centric customer modeling.”
Furthermore, this data-driven approach represented a marked difference from the traditional agency value proposition. “GM’s digital footprint is massive, including all sorts of transactions online,” Pilkington continues. “Well beyond the inferential and attitudinal modeling of the past. Now we can be predictive.”
In fact, the role data play in digital transformation is the cornerstone of Interpublic’s move to digital. The value to GM is profound. “The power of prediction: ability to build data and build models around that data,” Pilkington says. “How do you evoke relationships over time? Not just a car, but the right car? Data is the glue that allows us to do that.”
Transforming to Transform
Perhaps the most interesting angle to this story is the internal changes that agencies must undergo in order to successfully help their clients undergo their own digital transformations.
“Sometimes agencies are going through their own transformation,” Pilkington explains. “We’re sometimes leading transformation, sometimes participating.”
This digital rethink impacts agency business models, just as the rise of the web impacted the media buy centered business models that predated the dot.com boom. “We’re shifting from time and materials to the productization of IT,” Pilkington says, as customers look to drive costs out of their digital efforts.
Coming up with technology-centric products, however, requires a skillset the highly distributed agency model can struggle to find – at least in one place. “Connecting the dots required McCann to bring together top talent across the organization,” Pilkington says.
In fact, servicing the GM account will require Intergroup to leverage its worldwide and multidisciplinary capabilities to deliver combined technology and creative solutions. The company intends for this collaboration to take place across all Interpublic division McCann Worldgroup business units currently serving GM brands, including Commonwealth//McCann (Worldgroup’s globally dedicated Chevrolet agency), MRM//McCann, Weber Shandwick, and Momentum, among others.
The reason such large agency conglomerates have so many different divisions in the first place is because creative capabilities don’t scale well. For such dominant players to compete with boutique shops, they must think and act like boutiques themselves.
The technology part of the digital story, however, requires scale in order to be cost-effective. Hence the productization of technology that Pilkington refers to works at odds with the creative capabilities at individual units.
Pilkington sees this trend as fundamental to how agencies play in a digital world. “This is how advertising has grown up over the last few years,” he says. “We’re starting to move to a ‘model of excellence.’”
This model of excellence cuts across the separate business units, shaking the advertising world to its core. “The traditional campaign is dead,” Pilkington says. “It’s tough for creative directors. Everything they’ve worked toward for years no longer applies.”
Creative work itself, however, isn’t dead – in fact, it’s stronger than ever. The role creative plays in the new digital world, however, has transformed.
Interpublic leadership understands the importance of this transformation. “We can talk about digital, we can talk about new media, we can talk about fragmented media, we can talk about all the different outlets and the disintermediation of TV,” says Interpublic Chief Executive Michael Roth. “But in the end, creativity makes it all come together and really is the secret sauce to what we do.”
