6 min Read
By now everyone is aware that the future of the world rests on AI & those who control it. (That explains AI’s strong links with geopolitics.) Meanwhile, technology refuses to be left behind. We continue to mess with the human body, from butt-lifts to gaming the human hormone systems for short term benefits – to transplanting pig hearts. Even as our apps try to find a place on every screen on the planet!
On a parallel level, delivering customer revenue as a service (RaaS) is emerging as the new business model where third-party agency partners manage, optimize, and accelerate the client’s sales and revenue operations, shifting the focus to cost-per-brand revenue generated from cost-per-customer touchpoint.
British advertising group WPP’s latest global business strategy is designed to revive its decelerating revenue by satisfying an age-old need for linking client’s marketing spends to brand revenue. Other agencies have also reportedly started offering versions of this model, at least as a part of their new client acquisition practice.
But for this, agencies must go back to the full-service agency model a.k.a. full stake agency, albeit with an added bouquet of tech offerings. This is a sharp departure from the independent, specialist agencies for media, digital & creative services – a practice that prevailed in the past 2 decades.
A major addition is that agency fees can be partly linked to sales outcomes with inbuilt incentives.
RaaS is a business model where clients pay for guaranteed, measurable outcomes related to sales (e.g., sales revenue, enquiries, test-rides booked, etc.) – rather than for pure services delivered at various customer touchpoints.
The RaaS model attempts to shift a part of the risk from the client to the agency – ensuring higher accountability with a direct measure of RO. It achieves this by focusing on meaningful sales performance rather than pure services.
Key aspects of RaaS:
The challenges are a-plenty, but the rewards are exciting. Besides it also promises to address the perennial question about the future of the ad agency model. 🙂
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