Explore how the rapid integration of advancing technologies and data metrics all point towards an upcoming disruption to this traditional field.

Marketing as a field is certainly no stranger to disruption. Throughout the years, advances in technology have always forced companies to create new marketing strategies and have even given rise to entire companies whose sole job is to market for other companies. The point in time society is currently at, however, is completely unprecedented and every field of work is on the cusp of serious disruption.


Economists have long-since dubbed our current state of technological development: The Fourth Industrial Revolution. Characterized by the fusion of digital and biological worlds, this new revolution has the potential to impact every aspect of our daily lives. While the other three industrial revolutions led to the liberation of old ideals, this new revolution threatens to topple historically strong industries and change the face of business forever.


Addressing and successfully integrating with modern technologies, as well as acknowledging the full scope of their potential, is the only way companies and industries alike will survive the coming disruption. Marketing agencies are already being disrupted by this change and understanding how they’ve been able to survive is as simple as breaking down how they’ve evolved over the years while building a timeline for this change.

400 Years of Traditional Marketing

It should go without saying that the marketing agency would never have formed if the field of marketing never took hold. With that in mind, the roots of marketing itself go back to the days when humanity was mere hunters and gatherers. Evidence suggests that marketing may even go back to the foundation of our societies, with traders positioning their goods more appealingly.


While this is a far cry from the marketing seen in the world today, the overall goal was the same: sell a product to someone who doesn’t necessarily want it. Suffice to say the field didn’t take off for over a thousand years when printed advertising finally jumped into existence.


Having the ability to reproduce literature was invaluable to the development of marketing. There are a few key statistics to be drawn from within the last 400 years:

  • First American magazine was published in Philadelphia during the year 1741
  • The earliest recorded billboard rental occurred in 1867
  • Posters were banned on the property in London in 1839 due to their popularity


At this point, people were beginning to realize that marketing worked. If you were a successful enough salesperson, you could generate revenue for your product without even needing to demonstrate what it did. Convincing a person that they need something, even if they don’t, became the mantra of salespeople around the world.

It’s through this that the first and longest surviving form of marketing, one that led directly to marketing agencies, developed:

The Rise of Outbound Marketing

When someone says marketing, what you picture in your head is likely outbound marketing. Tried and true, outbound marketing involves talking at potential customers through both personal and non-personal means. Through rapid conversations, a product’s existence is brought up to generate a sales lead. Once a sales lead is formed, internal sales representatives could be passed the torch to complete the sale.

Outbound marketing was one of the biggest reasons the marketing agency evolved, to begin with, since it showed something key to marketers: outreach can be performed far quicker when you have multiple people on the job.

This line of thinking, along with growing sales, caused many marketers to set up shop and hire internal workers whose sole purpose was to go out and generate sales leads. While getting random door-to-door salespeople may have frustrated you in the past, knocking on every door possible is their sole job purpose. Those leads could then be given back to the head marketer who could convert them into profitable sales.

Right around the time, the printing press took off is a similar time period to where marketing agencies started to form and evolve. Before covering what these original marketing agencies looked like, though, we need to quickly examine what exactly a marketing agency is and what it does.

A modern-day marketing agency specializes in a wide range of multi-channel marketing campaigns on behalf of a client. These organizations use an array of marketing mediums to tailor certain customers towards your product. All of the business decisions made by marketing agencies are built around your budget, goals, and business development.

However, the origins of the marketing agency are far more simple. In Europe, it was William Taylor who opened the first agency office in London during the year 1786. While this helped to expose some of the world to the idea of a marketing agency, it wasn’t until 1840, when Volney Palmer opened his agency, that the idea reached North America in Philadelphia.

All Palmer did was buy out major sections of the newspaper at a discount rate, and then turn around and sell that space back to clients at a higher rate. In fact, he had very little creative input on the advertisements. He was essentially selling ad space and making decent money at it too.

Clearly, this is far different than what marketing agencies do today, as described above. That is, until, outbound marketing became fused with the marketing agency business model. Agencies such as N.W. Ayer & Son, based out of New York in the 19th century, realized that it’s far more profitable to offer the creative side to companies as well. This is where hints of the modern-day marketing agency could be clearly seen.

Why let a company design its own advertisements, when you can claim to do it better, quicker, and with more lucrative results? This idea turned out to be extremely successful for the New York marketing agency and brought them clients such as AT&T as well as the U.S. Army. For the most part, this became the marketing model that stuck for another 100 years. In terms of a visual aspect, this is where we can begin to build our marketing agency timeline:


Society Reaches the Digital Age and Everything Changes

Most people picture the digital age and they immediately think of the dotcom boom and tech companies slowly overtaking the major global markets. For marketing, the digital age began far before the rest of the world. Data may not have been stored in the massive warehouses we have today, but it was certainly collected and utilized for the marketing agencies' needs.
By 1934, 60 percent of American households had radios and over a million cars were equipped with these devices. At the time, there wasn’t anything near as popular as the radio, and radio show hosts ruled society. As a marketing agency, this was the opportunity of a lifetime.


The following table, pulled from the Economic History Association, shows how radio advertising expenditures increased in just a 13-year time window:


Year Expenditures

(Millions of $)

1927 4.8
1928 14.1
1929 26.8
1930 40.5
1931 56.0
1932 61.9
1933 57.0
1934 72.8
1935 112.6
1936 122.3
1937 164.6
1938 167.1
1939 183.8
1940 215.6


There was a major jump between 1934 and 1935 as marketing agencies realized just what a goldmine radio advertising could be. For perspective, accounting for inflation, by 1940 radio advertising expenditures were just over $4 billion in today’s terms.


However, radio advertising was just one piece of the puzzle. Phone and television marketing was just on the horizon and seemed to hold the same exact potential as radio advertising. Marketing agencies capitalized on these mediums and offered access to these exclusive audiences to anyone who was willing to pay the price.

At the end of the day, eyes on a product are one of the easiest and quickest ways to generate sales, something marketing agencies capitalized off of as technology developed. Advertising became one of the largest jobs of a marketing agency by the mid-20th century, but everything started to change in the last 20 years. First, however, an updated timeline needs to be mapped:


Inbound Marketing Grips the World

Throughout history, marketing agencies were capable of successfully adapting to technological changes, but the 21st century has posed more challenges for these groups than ever before. The Internet was groundbreaking for a number of reasons, but it wasn’t as helpful to the marketing agency business model as one may expect.


In fact, it wasn’t helpful to marketing in general because it completely changed the ways by which marketing was performed. Outbound marketing had become commonplace and the world grew accustomed to it. The rise of the Internet, as well as the Internet of Things, brought about a new form of marketing: inbound marketing.

This sector of marketing is actually still developing but essentially focuses on positioning a company in a way that attracts customers. Rather than seeking out potential clients, you allow those clients to be guided to you via online methods. As outlined by HubSpot, there are three main strategies with inbound marketing:


  • Attract: Establishing yourself as a trusted advisor on the right content in such a way that draws people to you.
  • Engage: Present valuable solutions and market insights that align with client goals.
  • Delight: Finish the jobs successfully and supportively.


When you think about it, the overall goals of outbound and inbound marketing are quite similar. The difference is the mediums by which you attempt to attract your clients. With outbound marketing, no household was going to call a marketing agency and request to purchase a client’s product. With inbound marketing, a household may find a product online within a company’s website and by it directly.


Marketing agencies, for years, were the middlemen between consumers and producers. They held a monopoly over the advertising space and were, for all intents and purposes, required to successfully sell a product.


As the Internet evolved, however, companies soon realized that with the right amount of money invested in their internal marketing teams, along with an understanding of how the Internet works, they could do the marketing agencies’ job for themselves. Companies began to understand how to leverage search engine optimization so that when a potential consumer looks up a product, their company is at the top of the list.


In the past, marketing agencies seemed to adapt with relative ease to technological developments yet, as outlined in the following graph from The Atlantic, advertising and media jobs have declined over the last decade:



Clearly, adapting to the modern digital age has proved more difficult for marketing agencies than ever before considering their main mediums are all on a decline. This is, in large part, due to the rise of AdTech companies which have overtaken the job tasks of the traditional marketing agency.


Rather than selling advertising space, AdTech companies sell the data and Internet space that companies need to make informed sales decisions. Having access to consumer data is far more valuable than relying on an archaic marketing agency. Data companies such as Google and Facebook have overtaken marketing agencies as the preeminent seller of advertising space, leaving the future of the marketing agency in jeopardy.


Social media played a major role in this shift as well. Companies such as Instagram or Twitter became hotspots for advertising. These companies capitalized on advancing technologies and the connectivity that the Internet can bring. Instagram alone has over 1 billion active monthly users, according to Statista, which presents a massive pool of potential consumers to any companies hoping to sell a product.


From a company’s standpoint, they could reach more eyes by purchasing advertising space through Instagram and other social media platforms. Marketing agencies may offer certain caveats that social media companies don’t, but the large number of views an advertisement receives on a social media platform balance this trade-off.


This is where our marketing agency timeline ends. The future of these groups has never been more uncertain considering how every aspect of marketing is changing faster than ever before. Adapting to these changes is imperative to the survival of these companies, so identifying those changes can reveal where marketing agencies are falling short.

Artificial Intelligence and Data Within the Marketing Agency


Surviving the technological disruption brought on by the Internet needs to be done as quickly as possible by marketing agencies. Technology is only getting faster and the development of artificial intelligence systems is poised to change the future of work once again. If marketing agencies cannot surpass the existence of the Internet, there is no hope for them to evolve and succeed in the machine learning world.

So, how exactly will these agencies evolve and survive?


The answer is short and simple: understand a need and meet that need. It seems simple enough, but it’s what marketing agencies have failed to do since the Internet took ahold of the world. In the past, marketing agencies succeeded because they capitalized on a medium, i.e. radio, phone, and television, better than anybody else. Products may have changed over the years, but marketing itself just uses different channels. Essentially, the same disruption that happened when the radio was introduced happened in the modern-day. The only difference, though, is that marketing agencies haven’t adapted as quickly.


In the modern-day, data companies have grown exponentially while marketing agencies have seemingly declined, besides some of the larger competitors. The question is, what sets the surviving marketing agencies apart from the companies that have gone extinct? The answer is an understanding of AdTech and big data.


Pew Research Center reveals how 96% of Americans now own a cellphone of some kind and about ¾ of U.S. adults own a desktop or laptop. Society is now more connected with the Internet than ever. Building an understanding of this space and how marketing can be performed using it has been key to the small few marketing agencies who have survived.


Data collected by Martech in 2016 shows the exact steps marketing agencies will need to take if they hope to survive in the future. The days of thinking like marketers are over. Focusing on thinking like a data company is the best way to stay relevant.


As referenced in the above piece, four in ten marketing professionals wanted their agency partners to focus more on data and predictive modeling. On top of that, 74% of senior marketers believed that an agency having data analytic capabilities was a major deciding factor in the agency selection process.


The services offered by marketing agencies are still incredibly valuable to potential clients, but they are a more expensive alternative than simply relying on an AdTech company that can offer targeted advertising and successful marketing campaigns.


Artificial Intelligence as a Driver of Change


Most people believe that artificial intelligence will not heavily impact marketing, but this couldn’t be further from the truth. A.I. systems are extremely proficient at generating a positive relationship between a company and consumer, which can lead to increased sales as a whole.


Artificial intelligence is used by companies to identify new market segments and utilize data analytics to make informed marketing decisions. As covered by Business Insider, this is resulting in a trend of personalized ad experiences that greatly influence purchasing decisions. Deep learning can allow artificial intelligence to determine what product you are likely to buy before you are even aware it exists. Business Insider referenced how the artificial intelligence global market is projected to grow by 50% through 2021 alone, which is an unbelievable growth in comparison to other fields.


Have you ever discussed purchasing an item before among your family or friends, then gone on social media, and received an ad for that product? There’s a slew of ethical issues emerging surrounding invasive advertising via device listening, but the effectiveness of this marketing is impressive, nonetheless.


Considering the fact that the amount of data circulating throughout the Internet will only increase as more and more people become immersed with technology, artificial intelligence will be able to make more accurate predictions when it comes to what products should be marketed to which people.


Whichever companies build the best and most successful artificial intelligence systems will be the same companies ruling the marketing space. Right now, that’s AdTech companies who have built an extensive knowledge base surrounding data. If marketing agencies can begin to make use of artificial intelligence systems, though, they may be able to retain and grow their current market share.


AdTech vs. Marketing Agency


Both AdTech companies and Marketing Agencies have a competitive value. Overall, a marketing agency offers a more complete marketing campaign if they use the correct marketing channels. AdTech companies specialize in the selling of data but don’t offer all the bells and whistles that marketing agencies do.


To this end, industry reports from 2017 show that 39% of Internet marketing agencies felt getting new clients were their biggest challenge, yet 85% of those agencies offer SEO and web development. Clearly, concerns regarding obtaining new clients are stemming from an incomplete understanding of the modern marketing channels.


Marketing agencies need to take a technology-first approach with their evolution and focus on acting more like data companies. The demand for agencies who have a solid handle on data analytics is clear, so expanding into the realm of digital marketing is more important than ever for these agencies.


Artificial intelligence is the next disruption point after the introduction of data analytics. Getting ahead of this trend now could enable marketing agencies to set themselves up for great growth in the future. By combining all the bells and whistles offered by marketing agencies with technology, they can set themselves apart from AdTech companies and help reestablish their value in the marketing world.

Digital Marketing as the Future of the Industry

Regardless of who controls the field, digital marketing is the future of the industry. The main difference between traditional marketing and digital marketing is clear:

“The main difference between digital and traditional marketing is the medium through which an audience encounters a marketing message. While traditional marketing uses traditional media like magazines and newspapers, digital marketing uses digital media, such as social media or websites.”


In this sense, it is far to substitute traditional marketing and digital marketing for outbound marketing and inbound marketing, respectively. While outbound marketing still exists, all signs point towards it dying out in favor of inbound marketing. The number of Internet users is only set to increase, and technology is spreading throughout the world faster than ever before.


Currently, MarketingDive has estimated that digital marketing expenditures will reach $146 billion by 2023, which is a 9% compound annual growth rate. It is predicted that search ad budgets will shift to voice queries, an emerging marketing medium, within five years.


It’s only natural for marketing agencies to have difficulty evolving in the digital marketing landscape. After all, they were founded on outbound marketing and the mediums that come with them. Throughout the 20th century, agencies were lucky in that technology still supported outbound marketing as the best sales driver. It seems that luck has run out.


Inbound marketing is slowly proving to be an effective sales driver that is on track to surpass outbound marketing. However, marketing agencies have failed time and time again to adapt to this future of marketing. For marketing agencies to survive in the future, they need to focus on integrating technology with the unique business offers they bring to the table. Building an understanding of the mediums used by inbound marketing will grant them a competitive edge in the digital marketing landscape.

The Uncertain Future of Marketing Agencies


How exactly this fourth industrial revolution will play out is anyone’s best guess. At the end of the day, marketing and the agencies that have formed within the field are resilient and adaptable to change. While most people wonder how marketing agencies and the field will evolve, they fail to see that the field has already evolved.


When was the last time you saw a door-to-door salesman? Society is at a point where marketing agencies know exactly what to sell and exactly who to sell it to. The success rate of these agencies that utilize social media marketing and other modern strategies are far higher than traditional agencies that rely on archaic forms of marketing, such as billboards. Change is a natural part of industries around the world but failing to adapt to that change will result in a company or entire fields permanent end.


As products being sold continue to become more complex and intertwined with the digital age, companies will be forced to hire marketing agencies to get their products into the hands of the consumer. Paper pamphlets and letters written on doors have been replaced by social media algorithms that know what you will buy before you’re even aware it exists. To stay relevant, marketing agencies need to become proficient with technology and identify the best ways to sell. In the modern-day, data is everything, and controlling that data leads to profitability. At the end of the day, the only thing that changes is what product is being sold. Whoever can generate the best sales results by utilizing that data, whether it be marketing agencies or AdTech companies, will reap the rewards.

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