Much has been written about the impending death of the agency and the role programmatic will purportedly play in the killing. But, far from eliminating creatives’ jobs, technology could actually be creating new ones. In this piece, Hugo Gersanois, Chief Strategy Officer, AppLift (pictured below), addresses the need for agencies to learn how to create more high-quality work at scale without inflating prices. For when they do – they will be able to grab a larger market share.

The better we get at targeting, the more messaging we need. Marketers are now able (and expected) to create customised ads that speak to nuanced audience segments. That should mean more work for creative agencies, not less, as long as they are willing to adapt.

This year, programmatic spend in the US will reach USD$22.1bn (£16.7bn), representing 67% of total display advertising spend, according to research from eMarketer. Mobile is driving that growth and comprises 69% of total programmatic digital display spend. In 2017, mobile programmatic video is forecast to surpass its desktop counterpart for the first time. The story’s the same all around the world: programmatic buying is estimated to grow at an average rate of 31% annually over the next few years, reaching USD$36.8bn (£27.85bn) by 2019, according to research from Magna Global; at which point, global programmatic spend will be split evenly between desktop and mobile.

By definition, programmatic is a more automated approach to advertising, a key factor behind the technology’s ability to target more precisely at scale. The better marketers get at targeting different audience segments, the more messages they need. The better the quality of the messages, the better the results. (Because as we know, advertising isn’t just about finding the right people; it’s also about serving them the most relevant message.) A single data management platform can have a thousand campaigns running simultaneously for just a single advertiser. Some of that creative work may be automated; but advertisers who rely too heavily on automated solutions for creatives will find that performance suffers, or at the least, that they have missed an opportunity to produce better results by not relying on the creative strengths of professional storytellers.

Creative agencies are poised to benefit from the surge in demand for good creative work that the continued rise of programmatic advertising, specifically mobile, promises to drive. Not only will this surge lead to more work from existing clients, it will also create new clients, as advertisers who used to handle messaging in-house turn to outsourcing to keep pace with the growing volume of messaging they need.

Are creative agencies ready?

Programmatic, and the need for more creative messaging, is a good thing for agencies, but it will require them to make some changes. Agencies will have to be prepared to produce a larger volume of work, most likely at a faster pace, and more often, with the specifications of the mobile format in mind – especially when it comes to video.

Agencies will also have to become more skilled at using data to inform their strategy. The performance of creative work has become increasingly measurable. An ad isn’t good if the client likes it; an ad is good if it generates results. Agencies that demonstrate a comfort level with effectively using data, and a track record of doing so effectively, will have a competitive advantage.

Hugo Gersanois, Chief Strategy Officer, AppLift

Just how many messages an agency will be expected to craft for a typical programmatic campaign remains to be seen. Segmentation is basically limitless, but, of course, advertisers need to set parameters to get things done. Imagine you are Coca-Cola running a mobile video campaign in the US after the Olympics. Perhaps you adapt your message based on the area of the country, whether the location is urban or rural, and the demographics of the user. You quickly have 100 audience segments that require different messages and, in turn, different videos. Most likely the videos will be based on the same big idea and tweaked with those specifications in mind; but that is still a sizeable project, and one that requires creative expertise. The decision on how to segment the audience will most likely come from the client, the third-party solutions it uses to track data, and/or its partnership with marketing data companies, like Nielsen, that help with segmentation. But how to match creative messaging and data is a job for the agency.

Creative agencies’ pricing models will also change. Right now, they take on a limited number of projects, each at a steep price tag, usually working with Fortune 500 companies. Their work is prestigious, the focus on quality. The most successful agencies will learn how to create more high-quality work at scale without inflating prices; and, when they do, they will be able to grab a larger market share. And they will have to, because it is easier and cheaper than ever before to create content. Agencies aren’t just competing with each other, but also with user-generated content, influencers, and the aforementioned automated solutions. To stay competitive, they will have to become more volume-based and less pricey.

You and Mr. Jones, the holding company created by David Jones, former global CEO of Havas, is indicative of the future of the space. It dubs itself the first ‘brandtech’ group and offers branding services as well as data and technology tools. It’s a marriage between creative minds and machine-based marketing technology.

Marketers realise that to make the most of the data and targeting abilities at their fingertips, they have to couple them with strong messages customised for specific audiences. That requires creative talent. Creative agencies have the skillset; but to take advantage of the opportunity afforded by programmatic, they will have to alter their mindset.

They’d be wise to do so. The era of performance creativity is likely upon us.