The shift to analytics-driven marketing and technology-enabled business growth has changed the nature of advertising agencies. Check out this interview with Kimberly A. Whitler and Alexei Orlov, who was once the CMO of Volkswagon.

1. THE NEW ERA OF ADVERTISING:
WHAT AGENCIES AND CLIENTS
MUST DO DIFFERENTLY
TO SUCCEED
A F O R B E S I N T E R V I E W W I T H A L E X E I O R L O V B Y K I M B E R L Y A . W H I T L E R

2. THE SHIFT TO
A N A L Y T I C S - D R I V E N M A R K E T I N G A N D
T E C H N O L O G Y - E N A B L E D B U S I N E S S
G R O W T H H A S C H A N G E D T H E N A T U R E
O F A D V E R T I S I N G A G E N C I E S . T H E E R A
O F “ M A D M E N , ” W H E R E
A D V E R T I S E R S P R I M A R I L Y F O C U S E D
O N T V , R A D I O , A N D P R I N T
A D V E R T I S I N G I S G O N E . I N I T S P L A C E
A R E S P E C I A L I S T S W H O F O C U S O N
S O C I A L M E D I A , D I G I T A L M E D I A , A N D
T R A D I T I O N A L M E D I A . A N D , T H E R E
A R E B E H E M O T H S W H O A T T E M P T T O
P U L L A L L D I S C I P L I N E S I N T O A
S I N G L E H O U S E .

3. ON TOP OF IT,
T H E T R A D I T I O N A L A G E N C Y M O D E L
W A S B U I L T O N A R E V E N U E
G E N E R A T I O N A P P R O A C H T H A T
I N C L U D E D M E D I A P L A C E M E N T ; W H I L E
T H E R E W E R E D I F F E R E N T M O D E L S ,
T H E M O S T C O M M O N O N E W A S B A S E D
O N A P E R C E N T A G E O F T H E M E D I A
P L A C E D ( E . G . , 1 5 % O F T H E V A L U E
O F M E D I A P L A C E D ) . T H A T M O D E L I S
B E I N G D I S R U P T E D A S
P R O G R A M M A T I C M E D I A B U Y I N G
T A K E S H O L D A N D C L I E N T S P U S H F O R
C H A N G E S I N T H E A G E N C Y
C O M P E N S A T I O N M O D E L .

4. WITH EXPECTATIONS
O F T H E T R A D I T I O N A L A G E N C Y M O D E L
W A S B U I L T O N A R E V E N U E
G E N E R A T I O N A P P R O A C H T H A T
I N C L U D E D M E D I A P L A C E M E N T ; W H I L E
T H E R E W E R E D I F F E R E N T M O D E L S ,
T H E M O S T C O M M O N O N E W A S B A S E D
O N A P E R C E N T A G E O F T H E M E D I A
P L A C E D ( E . G . , 1 5 % O F T H E V A L U E
O F M E D I A P L A C E D ) . T H A T M O D E L I S
B E I N G D I S R U P T E D A S
P R O G R A M M A T I C M E D I A B U Y I N G
T A K E S H O L D A N D C L I E N T S P U S H F O R
C H A N G E S I N T H E A G E N C Y
C O M P E N S A T I O N M O D E L .

5. HOW ARE ADVERTISING
AGENCIES CHANGING?
K I M B E R L Y W H I T L E R :

6. The actual model is changing. As recently as roughly
eight years ago, advertising ruled everything; it was
the golden era of cinema and TV. Clients would start
with a budget and then ask agencies to develop
creative that would be spent against that budget. Now
the world has changed. The power has shifted from
brands to people. Today, brands need people more
than people need brands. The challenge for brands is
delivering real benefits in real time such that you
create a discreet experience. And you have to do this
every day, bit by bit, minute by minute, that
aggregates over time to a holistic view that the
consumer has about the brand. This has caused a
fundamental shift as agencies now have to develop
deep, meaningful insight from data that can take a
brand and catapult it to another place. This takes
precision. Companies that succeed will take a nuance
of data that is real, meaningful, and unique and then
shape the insight in a way that makes people stop.
A L E X E I O R L O V :

7. Additionally, agencies need to understand that co-
creation is happening. Gone are the days when
companies threw everything at an agency and the
agency was expected to come back with a final
product. Clients want to be involved in creating the
end product. Often, they want the consumer, or other
critical stakeholders to be involved as well. Agencies
have to open up the process and let clients in—the
black box era of creation is over.
A L E X E I O R L O V :

8. HOW DOES THIS IMPACT THE
STRUCTURE AND
ORGANIZATION OF AGENCIES?
K I M B E R L Y W H I T L E R :

9. There is a big change in the architecture of great
agencies. First, there are fewer creatives as the head
of advertising agencies and more creative
communities. These communities include graphic
designers, copywriters, analysts, strategists, and big
thinkers. It is an integrative team brought together to
combine left and right brain thinking into superior
strategy and creative. Second, there are less account
managers/executives and far more practitioners at
agencies than in the past. The reason for this is
because clients understand how to monetize
technologies, leverage cross-channel personalization,
and actually how to connect with the clients better.
A L E X E I O R L O V :

10. WHAT STRUGGLES ARE
AGENCIES GRAPPLING WITH
AS THEY ADAPT TO THE NEW
MODEL?
K I M B E R L Y W H I T L E R :

11. One of the biggest struggles agencies face today is
making sure to have the right conversations with the
right people. To have the right conversations, it starts
by ensuring that agencies can speak openly and
candidly, even when the idea may not be what the
CMO or CEO wants to hear. However, this can’t
happen if agencies are afraid to speak the truth and in
some cases, there is a currency of fear. When
agencies are afraid of losing a client, the quality of
work is at risk because agency representatives will be
afraid to challenge, push back, or even speak
honestly. What ends up happening is that clients talk
at agencies. What used to be a partnership and
discussion has in some cases turned into a company-
vendor relationship.
A L E X E I O R L O V :

12. In addition, there are other factors impacting the
advertising agency world. Conversations today are far
more data driven, which is fantastic. CMOs are more
focused on mattering rather than marketing. This
presents an opportunity for advertising agencies to do
more meaningful work, embedded in purpose rather
than selling.
Additionally, there is a big shift on the horizon. If
agencies aren’t careful, consulting firms will continue
to encroach on our domain. Companies like Deloitte
Digital and Accenture Digital are starting to expand
beyond strategy to think about the delivery model.
Increasingly, there are strategy players migrating into
delivery. Additionally, big companies may begin to
create their own internal agencies that create in-
house IP.
A L E X E I O R L O V :

13. YOU TALKED ABOUT HAVING
THE RIGHT CONVERSATIONS
WITH THE RIGHT PEOPLE.
WHAT DO CLIENTS NEED TO DO
DIFFERENTLY TO MAKE THIS
HAPPEN?
K I M B E R L Y W H I T L E R :

14. At the beginning of the relationship, you have to set
the ground rules. If a client wants advice from an
advertising agency versus simply the delivery of
output, there must be an agreement up front about
the give and take of discussion and that the agency
will have the freedom, actually the responsibility, to
speak up and share thoughts.
Today, many C-level leaders are younger than they
have been in the past. This is terrific because they
bring a data-driven mindset. However, while most
people talk about intellectual capital, it’s actually an
abundant resource. EQ, on the other hand, is a skill
that tends to be earned over time, across a number of
life experiences. Experience only comes with time,
scars, and learning.
A L E X E I O R L O V :

15. For great work to occur, sometimes you have to throw
your knowledge away and shut up and listen to the
other side. Sometimes, people believe that because
they have data, they have the whole of the data.
Insight often lives between and across data and great
work requires more than data. Clients should treat
their agency partners like employees (rather than
vendors) and be more gracious.
The best work I’ve ever seen and done is when there
is a pause—and opportunity to slow down, breathe,
and think.
A L E X E I O R L O V :

16. WHAT DO AGENCIES NEED TO
DO DIFFERENTLY?
K I M B E R L Y W H I T L E R :

17. Agencies are actually pretty appalling at selling their
work; the reason, I believe, is related to the point I
mentioned earlier—the fear that they have. While
clients need to help alleviate that fear, agencies need
to do more careful research and should argue not
from emotion, but from fact. When the two parties are
having difference discussions, one from fact and one
from emotion, it’s easy to miss each other’s points.
Agencies need to learn to speak and understand the
language of clients to be able to have the right sort of
conversations.
A L E X E I O R L O V :

18. Additionally, while clients need to listen, agencies also
need to listen and to ask the right questions. I’ve
found that typically, when you lose a pitch, it’s often
because you don’t ask the right questions. Agency
folks often don’t understand the importance of the
client’s KPIs (of creating objectives and meeting them)
and need to ask about, understand, and center work
on delivering against the KPIs. Finally, agencies need
to live up to what they sell. Tell the client what you
will do for them and do it well. You don’t need to
shower clients with a ton of ideas. Often, less is more.
Share the best ideas and explain why.
A L E X E I O R L O V :

19. ANY LAST TIPS YOU CAN
PROVIDE CLIENTS TO
GENERATE BETTER
ENGAGEMENT AND WORK
FROM AGENCIES?
K I M B E R L Y W H I T L E R :

20. Be clear about requirements,
Be open to opinion, advice, and thoughts,
Understand that there is a big difference between
when you want something done (usually ASAP) and
when you can get something that is high quality
Collaborate on the planning process (don’t hide the
timing – it doesn’t help anybody). Have
conversation around activities.
A L E X E I O R L O V :

21. KIMBERLY A.
WHITLER
is a former General Manager and CMO who has
worked in the U.S. and overseas for companies
in a variety of industries, including P&G,
PetSmart, and David’s Bridal. After nearly 20
years in industry, I am currently an Assistant
Professor at the University of Virginia's Darden
School of Business, conducting research that
addresses contemporary CMO challenges.

22. ALEXEI ORLOV
Alexei Orlov is Founder and Global CEO of mtm
choice worldwide, a boutique network of skilled
practitioners specialising in high-precision brand
activation and media optimisation. Bolstered by
market-enabling technologies, mtm agencies
seek to help brands excel at the “moments that
matter” for their customers and consumers. The
company has completed three acquisitions and
will be closing a fourth in January 2019.