The new technology challenge to ad agencies

Technology is having a big influence on the Cannes Lions advertising festival this year – and not just because of the €220,000-a-week 132-foot yacht, which  lead sponsor Microsoft has parked in the middle of the bay.

The lines between TV spots and viral web videos are officially blurred by the inclusion of creative from any screen – from cinema to mobile phone – in this year’s Film Lions. Creatives from the offline world are getting to grips with digital tools, even if their companies’ structures and business models haven’t quite caught up.

Some agencies – and not just Microsoft-owned Avenue A Razorfish – are even wondering whether there ought to be an award for applications next year. Most of those ‘apps’ are likely to be Facebook widgets, whether to send online buddies Coors-sponsored drinking invitations or Nike’s Miles, which particularly keen joggers can install to nag them to run more often.

A more philosophical inspiration from the tech world is open source, the somewhat utopian software development movement that puts its code online for anybody to improve. The freely available Linux operating system and the Firefox web browser are the best-known examples in software, but agencies are embracing the concept as a metaphor for online collaboration and using consumers to extend marketing campaigns.

Aegis digital wing Isobar is touting open source as the thinking behind its online Isobar TV show, recording interviews with rival agencies at Cannes to foster a spirit of cooperation.

Open source was the main topic of conversation at BBH’s latest top-level pow-wow, says managing director Ben Fennell. Even with 900 employees worldwide, “we should be finding better ways to harness millions of people around the rest of the world”, says Mr Fennell. BBH’s posters for Vodafone UK’s current outdoor campaign draw on over 100 designers from around the globe.

“It’s definitely a trend,” Mr Fennell says. “But nobody’s figured out how to do it yet.”

Similarly conflicted is Richard Morris, regional director at DDB Europe. DDB can feel virtuous after the remix of Singing in the Rain used in its Volkswagen Polo ad soundtrack was used by the winner of Britain’s Got Talent. The three-year-old VW campaign’s life is extended as the Mint Royale track tops the UK charts, but DDB has not managed to hold on to the intellectual property rights.

Allowing consumers to run with an idea and enlarge its audience can only be “a good thing”, he says. “But as soon as an idea lives beyond the paid-for medium in which [advertisers] are investing, the business model on which we’re paid slightly falls apart.”

Open source is just one way in which technological developments are wrenching the organizational and business models of advertising agencies. “The above-the-line and below-the-line distinction is completely confused by online,” says Alastair Duncan, chief executive of MRM Worldwide, the digital arm of McCann Erickson, an Interpublic agency. “But the industry is structured around its output.” That can hinder the development and complicate the billing of the integrated campaigns that marketers are increasingly demanding.

Even if social media and the internet in general present as much opportunity as challenge, by enabling cheaper campaigns to achieve greater “engagement” with consumers, marketers and advertisers are still grappling with the financial consequences of technological change.

FT techfeed

Tech Blog

Analysis & reviews

About this blog Blog guide
Richard Waters, Chris Nuttall and April Dembosky in the FT's San Francisco bureau share their views - plus tech insights from Tim Bradshaw and Maija Palmer in London and Robin Kwong in Taipei.



Read about the authors


To comment, please register for free with FT.com and read our policy on submitting comments.

All posts are published in UK time.

Contact the FT Tech Hub team: richard.waters@ft.com, chris.nuttall@ft.com, april.dembosky@ft.com, maija.palmer@ft.com, robin.kwong@ft.com and tim.bradshaw@ft.com.

See the full list of FT blogs.

Archive

« May Jul »June 2008
M T W T F S S
 1
2345678
9101112131415
16171819202122
23242526272829
30  

Tech analysis and reviews

Coding for dummies

Execs learn geek techniques

Time for smartwatches?

Sony synchronises watches with smartphones

Tags

advertising android apple AT&T Electronic Arts Europe Facebook funding google hacking hewlett-packard HP htc instagram intel iPad iphone IPO Jawbone Lenovo London megaupload microsoft Mobile Netflix Nintendo nokia nokia lumia patents privacy samsung smartphones social media social networking Sony SOPA Spotify story of the week Tablets Toshiba twitter venture capital Wikipedia Yahoo Zynga