This is the fifth essay in our series of 10 Lessons From 10 Years Of The World’s Most Innovative Companies.
For most of the past 10 years, our World’s 50 Most Innovative Companies included at least one ad agency, and sometimes as many as three—leaders like Weiden & Kennedy, Droga5, and 72andSunny. Yet for the past two years, nothing. Not a single ad agency has been included.
Why? Because two parallel forces of innovation have exerted themselves, in undeniable ways, shifting the focus of power in the advertising world away from agencies. The first comes courtesy of Facebook and, to a lesser but deepening extent, Snapchat. As consumers’ media tastes have become increasingly mobile and social, these new platforms have been commanding more attention—and more ad dollars. To tell the innovation story of the past two years and ignore Facebook and Snapchat would be foolhardy; the impact of ad agencies on the marketing landscape has been pallid in comparison. It’s just not where the leadership has been.
The second wave, which has been steadily gaining momentum over a long period, comes courtesy of the client: Brands have begun to create their own content in new ways. Some have done so independently of ad agencies; others have worked with agency partners. But regardless, it is the brand itself that has commanded the spotlight. From Coca-Cola to GE, the best marketers have demonstrated a new assurance, asserting more control over their messages and how and where they are disseminated.
GE has filmed sensors being installed inside a Nicaraguan volcano and created a road show around the chemistry of barbecue, turning its scientific nerdiness into a virtue (which it then reinforced with traditional television ads). It has partnered with virtual reality filmmakers and embraced what it dubbed “emoji science.” Just as the company has remade itself, divesting less technological parts of the business, GE’s brand has become both more focused and more adventurous.
We have seen some of this before: The rise of Red Bull as a cultural presence was reinforced by in-house media activities, which earned it a spot on our 2012 World’s Most Innovative Companies list. Yet the phenomenon has expanded throughout the business landscape, to activities that go beyond sponsorships and stunts. Fashion houses always produced spectacles with their runway shows, but now those events are constructed to generate real-time content that is shared and disseminated globally. From upstarts like Honest Company and Glossier to established companies in finance and pharmaceuticals, brands are presenting their own content, online and via social, that may never touch traditional media platforms. Some newer companies have even built marketing into their core—outfits like Warby Parker and mattress-purveyor Casper. The cool, friendly user experience of their e-commerce operations (and increasingly, their brick-and-mortar outlets) attracted an enviable customer cohort well in advance of any traditional advertiser spending.
Then there’s Taco Bell. Its aesthetic couldn’t be more different than Warby Parker’s or GE’s, but it has found a brand-appropriate way to inspire its customers: rolling out new, limited-time products every few weeks. This creates incentive for return visits, and if a new menu item gets rave reviews, it can become permanent. The product itself is the marketing, and the marketing becomes the product.
The ad agency business is hardly drying up, but the pressures are more intense than ever. Models are evolving, and there’s no clear new winner. Challenges are coming from places like BuzzFeed, which has been creating its own ad formats and content for brands, targeted to its customer base and fueled by data that agencies can’t access. The traditional ad giants have been put into a position where they are forced to react—whether to the BuzzFeeds of the world, the Facebooks and Snapchats, or their own brand clients. It’s a tough environment, and regaining control of the storyline will require creativity that lasts beyond 30 seconds.
This article is part of our coverage of the World’s Most Innovative Companies of 2017.