October 2021 | Digital Marketing

What is the future of advertising agencies?

What is the future of advertising agencies?

Do you remember that tagline “Thanda Matlab Coca-Cola”? It made Coca-Cola one of the most famous television commercials in India. From then till now, it is a widely consumed soft drink in the Indian market. The company became more popular, and the revenue reached sky-high after this Ad. All this happened because the advertisement directly connected to the Indian audience.

The power of advertisement has always been the strongest element in building and publicising a promising brand. From ideation to the creation of advertisement campaigns, advertising agencies play a vital role. It has noticed and survived a great industrial shift from the 18th century till the 21st century.

The history of advertising agencies is rich, and their future is way more magnificent. So, let’s know a brief about the history of advertising agencies then, dig into the present scenario and unfold its future.

Pre-internet era

The pre-internet era was all about magazine and newspaper advertisement. Businesses were never thought to be successful like they are today. At that time, individuals and companies used to purchase ad slots at the discounted price from magazines and newspapers and sell them to top-notch brands with a markup.

That was all about advertising before the involvement of the internet. No other additional services were offered. It was just a blend of the best ad slots sold at the right time to earn money.

In 1786, the first advertising agency was founded by Mr William Taylor in London. After that, the concept of advertising agencies spread around the globe. Then in the 1840s, Volney B. Palmer opened an agency in America. But, she restricted her services just for buying ad slots from newspapers and magazines and selling them. As a result, she remained an advertisement broker.

Then the revolution during the pre-internet era came after the formation of Ayer & Son in 1869. This was the oldest advertising agency in the US that sold ad slots and did campaign planning, writing, visualizing, and execution.

Post internet era

The involvement of the internet in advertising brought a huge transformation in the whole industry. Globalization made the world smaller; there was no entry barrier; new companies were established, which means the market became more competitive.

Out-of-the-box advertisements with unique marketing strategies were the only way for companies to thrive in this competitive business environment. This gave birth to the digital advertising agencies that are now an integral part of the world economy.

By 2010, there were only advertising agencies, and the new breed of agencies known as digital advertising agencies came into existence after that. Till 2017, digital agencies kept on supporting the mainline advertising with big ideas that were telecasted on television and published in print by amplifying the digital leg of the advertisements.

After that, the spending on digital advertising was constantly increasing, and clients started asking for digital-first ideas. Before this transformation, the agencies simply used to cut the TVCs and use them for YouTube Ads and run small social media campaigns.

Future of advertising agencies

Then, again a shift came in the advertising industry in 2018 when digital advertising became the prominent 30%-40% of marketing spend for every brand. This marketing method remained the same before the COVID-19 pandemic. Just like every other industry, this pandemic brought a revolution in the advertising industry as well.

Out of Home (OOH) and print advertising had vanished during the epidemic, TV continues to be the choice, but digital advertising is holding the pride of place. All the spending that was deducted from outdoor and print advertising is now used in online or digital advertising. Even digital advertising spends have surpassed television spends. Hence, as per the trends and demands, clients are looking for innovative digital ideas.

Now, with the changing demand and upgrading scenario, an agency has to emphasize more on digital-first strategy. Along with that, they have to understand the mainline media, i.e., television advertising. Hence, we can say that agencies today are providing an integrated perspective, wherein they are focusing on mainline as well as digital advertising.

So, the future of advertising agencies lies in having an integrated approach to every marketing campaign in which no advertising domain should be left behind. They need to have an understanding of every vertical, whether it be print, television, OOH, or digital advertising. But, their idea should be the digital-first idea.

Furthermore, we can say that by 2025 integrated agencies are the way forward. All advertising and digital agencies will be amalgamated to form integrated marketing agencies that will focus on all types of advertising but majorly on the digital wing.

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