The Agency Black Box Is Breaking. Horizon Media’s Bob Lord Explains Why
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By Lynn Leahey
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Bob Lord has spent decades at the intersection of technology and marketing. He was the global CEO of Razorfish and led digital transformation at IBM before joining Horizon Media as president early last year. At Horizon’s helm, he’s pushing the industry to rethink what an agency is for.
In a conversation with Streamlined, Lord says most agencies are trying to solve the wrong problem by obsessing over cost efficiency at a time when AI has quietly unlocked something far more valuable: the ability to become a growth partner to advertisers. Supply-chain transparency, open-source tech culture and performance-based compensation models are helping crack open the many black boxes of marketing. The agencies still clinging to those opaque structures are running out of time.
What is stopping agencies from using AI to drive client growth instead of just cutting costs?
There’s inertia in the legacy holding companies and the industry at large. The initial instinct of utilizing AI revolves around cost reduction. But holdcos are not chasing the other profound potential of AI, which can help them become a growth partner to their clients by using AI to help advertisers’ businesses grow faster than they could without AI.
In your ARF keynote earlier this year, you said you were shocked by how opaque marketing measurement still is. What needs to change structurally to fix that?
The lack of transparency in the marketing world is remarkable to me. Something that attracted me to Horizon was [CEO Bill Koenigsberg’s] philosophy around buying transparency. It’s in all of his contracts. Any kind of discount or savings he gets from publishers, he always passes on to the clients.
But now you also have technology and data costs, data fees and the ad tech tax. Agencies should be transparent about how new technology is being used to build audiences and media plans so advertisers can better understand the impact of their campaigns.
At IBM, for example, a shipping manager could tell me where a product was down to the shipping container, but I still can’t tell a marketer by the end of the week whether their campaign has had an impact. That lack of transparency is because of how many disparate layers exist in the media supply chain.
Those silos are going away because AI is introducing more transparency into these black boxes.
Programmatic was supposed to be the way of transparency, but what programmatic workflows have actually done is perpetuate hidden costs.
If a CMO walked into their agency tomorrow and asked to see the reasoning behind its recommendations, what should they expect to hear from a truly modern agency versus a legacy one?
A client shouldn’t even have to walk into a modern agency. They should be able to log into an online system and ask about their consumers, how their campaigns are performing in different markets and what their competitors are doing. A modern system would give them the proper indications of audience behaviors, including whether marketing efforts are working and how products may need to change.
You’re a fan of performance-based compensation tied to business outcomes. How do you get agencies to willingly give up the billable hours model?
The answer is easy but very hard to implement.
At Horizon Media, we’re shifting our model so that we only get paid when marketers achieve their business goals. But that model can be unpredictable for public companies that need predictability in their revenue streams.
We couldn’t do performance-based media five years ago because the technology wasn’t sufficiently stitched together. With AI, agencies can more easily tie a media dollar to a media plan across the various systems involved in modern media buying.
What is one thing the tech world does well that marketing agencies still resist?
Many great technology companies use software that originated in an open-source world. Popular AI models, such as ChatGPT and Claude, also run on open-source technology. That structure allows everyone to share ideas and innovations across systems.
As marketers, we can learn from that. When I was at IBM, we didn’t grow at the scale we intended until we opened up our cloud and technology offerings to partners like Microsoft and Amazon, who we considered competitors. Innovation thrives when agencies are able to create strategies for clients in open ecosystems beyond the constraints of a single silo. Consider custom bidding solutions, for example.
But I don’t see that approach taking off in the media world right now. Agencies want to own their own technology and data. They think Google and Amazon are enemies.
What does it really mean for an agency to be a growth partner rather than just a vendor?
Agencies have to weigh whether they’re bringing new value and growth to their clients or just optimizing for cost efficiencies.
Over the last two decades, we as an industry have split up media and creative. But being a true growth partner is about making those two things work really well together. As an agency, success is not about scale or how much I can buy or how big I am compared to my competition. It’s about whether I can use new technology to strike an intimate relationship between the consumer and the brand.
That’s what it means to be a growth partner.
Catch Bob Lord on the Programmatic IO stage in New York City September 28 in NYC. He’ll be speaking on the panel, “Charting The Tech-Enabled Future for Agencies.” Get your ticket here.
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