Advertising agencies traditionally build “creative” campaigns such as commercials and print ads that fly out into the world with an unmeasurable impact on a client’s brand. The first disruption to this model came with performance advertising. Instead of seeing if sales of soda increased after a barrage of 30 second TV spots, advertisers could see who clicked on ads and which ones followed through to purchases. Advertising dollars could be efficiently spent by directly measuring the impact of advertising campaigns. Increasingly desperate advertising agencies managed to grab a piece of this pie–either by creating and managing pay-per-click campaigns for clients or creating the landing pages that these ads lead to.
Mobile is the new disruption. Although mobile ads operate in much the same way as pay-per-click ads, there is a new generation of advertising that is delivered as a mobile app. Many brands have dedicated apps such as Chipotle and Starbucks, while others have created advertising campaigns built around mobile games and location-based experiences. This is real software.
Most advertising agencies are not software developers. Yet many brands make the mistake of hiring agencies to build mobile apps. I’ve seen this many times, as companies that know how to make web pages and 30 second commercial spots scramble to understand software development on behalf of a client. This is an expensive and failure-prone strategy. The software development process is completely different from Photoshopping banner ads or shooting TV commercials. There is no way for a traditional advertising agency to transform themselves into a software company. Large ships are slow to turn.
The reality is mobile advertising is more dependent on software developers and data scientists than video editors and account managers. Some brands are catching on and eliminating the middleman. In fact, others have started incubators and are smartly creating startups around this new era of software-based advertising.
This is a much smarter use of advertising dollars. Advertising campaign budgets can easily rival a series-A for a hungry startup. A startup filed with smart engineers and designers that are far more capable of promoting your brand in a measurable way than a traditional agency. Agencies might consider the same approach. Instead of trying to do it all in-house either hire an actual software developer to build and manage the project externally or spin up a disruptive advertising software startup.