The digital revolution has turned countless businesses and business partnerships on their heads—not the least of which is the relationship between advertisers and their agencies. For the former, digital solves a problem that has dogged the industry since the days of John Wanamaker and his oft-quoted observation: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Advertisers now have the ability to know whether they are targeting the right person in the right place at the right time—a powerful capability.
For agencies, however, this capability comes at a price. The almost limitless choices and flexibility related to the timing, placement, and format of digital ads inject multiple layers of complexity—and, often, inefficiency—into digital-marketing operations. With more than 20 potential intermediaries between advertisers and publishers today, the value chain has morphed into a maze of myriad associations and solutions. Complexity too often reigns, and it’s not surprising that agencies are wasting far too many resources and way too much time—in an age when both are in short supply.
To gain insight into the digital-age drivers of efficiency and effectiveness, The Boston Consulting Group undertook a study using lean methodology to map and measure the end-to-end processes of 24 digital campaigns across 15 European advertising companies. (See “Our Methodology,” below.) We found that those companies that had determined to get their arms around the complexity of the digital world by undertaking a comprehensive approach involving integrated tools and processes had realized staff time savings of up to 33 percent in their campaign operations. Others that had opted for a more narrowly focused approach had realized efficiency gains that averaged 12 percent savings in time expended.