Ads, ads, ad firms.
They’re the names on the tin, but are often the first thing people think of when they think of ad agencies.
Ad agencies have come a long way in the last couple of decades.
The idea of buying an agency has been banished.
The old ad agencies used to sell you the right to have a conversation with the ad agency and get to know them in a way that you would not have otherwise.
Advertisers no longer needed to have an agent, but rather had an ad agency to put the words up in the first place.
And that was all the more important as they began to sell products like the iPhone and iPod, as well as other products that they could not afford to buy from themselves.
But in the age of digital media, ad agency revenue is in a tailspin, says Arundhati Bhattacharya, the co-founder of the ad industry think tank The Internet Advertising Bureau (IAB).
In a 2016 survey by AdWords, the world’s largest marketplace for ad-selling services, the median revenue per user fell from $8.10 to $5.95.
“As a consumer, it is more important to be able to understand your choices, not just to know the price,” Bhattacarya said.
Ad revenues, too, have dropped as a percentage of revenues.
The share of total revenue earned by the ad agencies fell from 20.6% in 2015 to 17.9% in 2017.
The decline in revenue comes as agencies have struggled to keep up with the increasing demand for their services.
They have had to cut costs and scale their operations to cope with the demand.
In 2018, ad revenues were down 9% from a year earlier.
“The number of ad sales is declining,” said Bhattaparya.
“In the last two years, we have seen some consolidation and the sale of agencies.
This is happening, and this consolidation is hurting agencies.”
The ad agency industry, in the end, needs to find a way to survive in the digital era.
Ad revenue is shrinking, but it’s not a good time to be a client.
Advertising, Bhattas said, is still about the experience and the content that you put in your ads.
The ad industry needs to be focused on building products that people can use and enjoy.
Bhattayas advice: The best ad agency is a one-stop shop.
The best marketing agency is another.
The industry needs a more flexible approach to advertising.
Ad agency agents should not only have the ability to run an ad, but the ability and willingness to offer it.
A good ad agency should have the right expertise and experience to make it happen.
The agencies that are getting the most clients should have good, solid products that are well-crafted.
The market needs to change from one where clients get products like iPhones and iPods, to one where the ad products are about the interaction and interaction experiences.
The time is ripe for the agencies to start providing their services to clients on a more granular basis, Bhatacharya said, with fewer contracts.
And the agency that can deliver on these new client expectations will thrive.