With the current ad agency model under attack from various fronts, it's hard to predict what exactly the industry will look like once the dust settles. There's no shortage of 'agencies are dead' proclamations or would-be saviors promising revolutionary new business models.
Former Havas chief David Jones believes that his "brand tech" company You & Mr Jones has figured out what marketers of the future need in a data and tech dominated world â and that he's got a huge head start on the competition.
The company was formed in 2015, raising $350 million to leverage technology to help build brands. Since then, it has acquired five technology companies, invested in 21 and launched two start-ups â all in a bid to bring marketers and technology closer together.
Right. So what is a brand tech company exactly?
You & Mr Jones is seeking to offer a new take on the full-service ad agency model â via which marketers got everything they need (producing ads, buying ad space, overall strategy) from a single firm.
In this case, You & Mr Jones essentially plays middleman between brands and technology companies â companies that specialize in things modern brands increasingly need content creation, brand strategy, chatbots, artificial intelligence and data and analytics among others (things that traditional ad agencies haven't been focused on).
The idea is to make brands self-sufficient and cutting edge, connecting marketers with startups at an early stage and helping them with their content and tech strategies at a time when a lot of them are moving toward moving many of those functions in-house â without actually making their ads for them.
"We didn't set out to compete within the advertising industry, we set out to disrupt marketing using technology," he said. "And if we get it right, there will be a new sector or a new industry."
There's now doubt the ad industry is going through seismic shifts
Three years afterJones set out on his new journey, the industry has only been rocked by more massive change. Some of the biggest brands are publicly criticizing traditional agency models, holding company stocks are getting clobbered and marketers are increasingly looking to cut out middlemen across he board.
What's more, new players are entering the field, promising that they can helping brands navigate the current landscape on the back of digital content and data analytics.
Former WPP chief Sir Martin Sorrell's latest venture s4 Capital is the latest example, promising to make marketing better, faster and cheaper with better application of tech. Jones sees Sorrell's move as a validation of his earlier theory.
"For me, the biggest proof of this working was when you had the guy who created the biggest holding company in the world saying that he was launching a new digital version of that because they don't have a future," Jones told Business Insider. "Imitation, after all, is the best form of flattery."
As a result, the momentum has only been accelerating for You & Mr Jones, with the company seeing 60% organic growth last month, according to Jones.
The industry's existential crisis is working in is favor, Jones believes.
"You probably can't find a major global client today who would tell you that they're happy with what they've got and it's all sorted," said Jones.
"You've got all the holding companies tanking, and you've got the biggest clients in the world publicly saying we don't want that model anymore."
You & Mr Jones is like a mini venture capital firm for brands and technology
While the traditional holding companies are great at brand-building and advertising, they are often less skilled when it comes to building tech products, says Jones. On the other hand, giant tech platforms are less verse in brand building. That's where You & Mr Jones fits in, according to Jones.
"The core advantage of You & Mr Jones is that we combine, in one group, both expertise in technology and expertise in branding," he said.
To ensure tech expertise, You & Mr Jones has invested in AI, blockchain and AR across companies including Niantic, Pinterest, Automat, Jivox and Pixlee among others.
It has 11 partners with years of agency experience in the center, who meet with as many as 20 new companies at the intersection of brand-building and technology a week.
"This gives us and our clients unique insight into where technology and marketing technology is headed, way beyond the narrow realm of just 'communications," he said.
Take Niantic, the company behind the AR game Pokémon GO, which Jones believes is the perfect proof- point of brand-tech. In Japan, McDonald's was embedded in the game for just a few days, and sales sales went up 27% for the month.
"This is exactly what brand-tech is," said Jones. "It is the ability to drive growth for a brand using technology in completely different ways."
"Experience has been a focal point of brands and CMOs looking to drive growth beyond conventional advertising and marketing," said Forrester analyst Jay Pattissal. "So firms like You & Mr Jones have an opportunity to drive direct relationships with brands, in the same way Google, Adobe and Amazon do."
The company wants to create a whole new industry
Jones believes the ad agency business is on the precipice of a complete reinvention with five or 10 companies emerging to form a new category of marketing technology holding companies. In fact, he believes that recent events prove his hypothesis.
"There will be companies like S4 within that, and there'll be companies like Stagwell within that and I'm sure new ones who come along," he said. "I maybe didn't envisage that Martin Sorrell will be launching one of those competitors, but we have always believed that this is what clients want and need."
But Jones maintains that You & Mr Jones has an edge, because it operates without the constraints of a fund and also works directly with brands apart from its investments. He wants marketers to think like startups, not giant incumbents.
"Airbnb didn't get up and say 'we want to compete with hotels,' they used technology to do something new, and Lyft and Uber didn't say 'we're going to screw the yellow taxis.'"
