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Changing Paradigms in the Advertising Industry

— by Rahul Joshi, Marketing Director, AccelerAsia

AccelerAsia is uniquely placed to get a bird’s eye view of the creative and advertising industry because of the clients we represent in the ad tech and the digital marketing world. And from our vantage point, it is apparent that the industry is in the midst of a structural shift. The democratisation of data, software and reach has produced new paradigms of production and distribution that are changing the incumbent industry workflow in unprecedented and disruptive ways.

The model in place all these years has been this: the client would brief the creative agency, which would, in turn, find a production partner. But increasingly, there is a decoupling happening, such that brands have direct relationships with creative agencies and with production partners.

The Movie Studio Model

Several major global brands have adopted a model prevalent among movie studios, in which a studio producer manages a show or a film, and is responsible for everything from the director to the catering. Of course, some of this is sub-contracted, but the studio producer has complete oversight. Thus, instead of having a vertical chain, you have a triangle: a transparent production process, given the production partner’s direct relationship with the brand and its clearer understanding of the brand’s goals.

This gives the brand greater control on the production quality, on transparency, on cost, and it actually allows the brand to evolve more, because along with it comes precise understanding of what the output will look like and what it requires. The brand needs to increasingly be in the driver’s seat and in control of the output across all channels, which is often serviced by multiple agencies.

Property Development

An appropriate analogy would be that of property development: if I’m a property developer and I have an architect, I don’t blindly want to follow that architect on their decision on the choice of construction companies, for example. I want to be involved in that.

Most property developers will be involved in that whole stack, if you will, with the option to choose the architectural firm, engineering firm, the construction company — down to the interior designer and electrician. That is what advertising production is moving towards — in some cases wholesale, in some cases gradually.

The Management Chain

Every agency is aware of the challenges and disruptions facing the industry, and of the fact that brands themselves are building creative capabilities in-house. Specialised in-house advertising and marketing project management talent is increasingly being invested into by brands – in some cases by augmenting the marketing team, but in some cases all the way through to creative and production.

Advertising agencies are fortifying their positions, and with an explosion in channels and platforms brought about by technology – especially when it comes to data-driven creative – the agency’s role is still of tremendous value.

The Asian Context

The evolution of advertising buying has also touched Asia, with local, regional and multinational brands.

Two of Singapore’s most prominent brands have, for the first time in their history, decided to work with a creative agency and a creative production company separately. This is proof that there is a growing understanding of the benefits of this decoupling and therefore an increasing appetite for this model.

There is little doubt that the advertising ecosystem is delicately balanced, yet robust enough to bear any shocks changing technologies and business models bring. All three stakeholders — brands, creative agencies and production companies — are necessary parameters in the advertising equation, but individual companies coming out on top or falling by the wayside will depend on how well they can adapt to their changing roles in the grander scheme of things.

It is pertinent to underline the fact that this scheme of things will, ultimately, always be shaped by the consumer.

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