Agency Elimination Software?

Mediapost has an article up today about VCs funding technology that will eliminate advertising agencies. They call the category "agency replacement software".

I can't take it seriously. Having seen all sides of the equation by working at public & private marketing services companies, VC-funded software companies, and public technology/media companies, I just do not think that the people touting "agency replacement software" understand what (g00d) agencies actually do or how (good) agencies actually operate.

From the article:

"Companies have agencies for public relations, buying media and planning marketing campaigns," noted [Greycroft Ventures, Partner, Ian] Sigalow, speaking at a venture capital panel on digital content at the OnMedia NYC conference Tuesday. "We're looking at companies that let them do these agency services in-house."

What better way to improve processes, than through automation? I won't argue that point.

And I won't argue that most agencies use way too much labor, too little process and too little automation to solve problems.

And I won't argue that there are thousands of agencies out there who survive simply because they execute a process at a price cheaper than the client would do so themselves. (in fact, this is driving an obsession in agencies with outsourcing, crowdsourcing - anything x-sourcing)

But agencies are not solely about executing process. Agencies are about expertise, knowledge and experience.

Did Intuit say "Quickbooks is Accountant Elimination Software"? No, because that would have made their software DOA. Intuit actually embraced accountants, built them features and now that all accountants are trained on Quickbooks, they have a fortified position in the market precisely because every accountant sets up their clients on Quickbooks. And I doubt that many accountants grumble about the good 'ol days of handwritten ledgers.

For a more applicable example, what about Adwords? Did Adwords eliminate agencies? Not at all. In fact, it enabled a specialist category of at least 2,000 SEM services companies globally. Did Marin Software eliminate agencies? Nope. They empower the SEM services with technology. And because they worked with agencies, they were able to quickly fortify a solid position in the marketing instead of languishing like so many of their competitors who thought they would eliminate agencies.

Here is the question: Instead of alienating a potential customer-base of the earliest of early marketing technology adopters, why not change the focus to enabling agencies with "marketing automation software"? There are at least 5,000 agencies in the US alone. There are at least 500,000 independent marketing consultants in the US. There is a market for this because I bet you'd be hard pressed to find many people in those groups who love doing the manual labor.

I think "agency replacement software" is a joke. It is naive. And it will cost a lot of tech companies who have great ideas to languish. The winning marketing tech companies who succeed will be those who embrace, empower and automate agencies and their relationships with clients.

Conclusion: The irony here is that in the past 10-15 years, agencies have proliferated and so long as people want to a. work in marketing, and b. want to work for themselves, agencies will exist. And the companies who decide to empower these individuals, will succeed and prosper.