Marketing & Strategy Innovation Blog

That's why I jotted down some tips on what ad and media agencies could do to break out of their downward spiral. In this, I benefit from ignorance as I've mainly worked on the client side, yet do claim some authority based on the nine-digits I've helped spend (waste?) in the past.

If you feel my under-nuanced, over-generalising, rhetorical approach misses the point, please use the comment section below. The only way to turn the tide in the agency world, is to start having the painful conversations in the open. Trying to ruffle a few feathers is my first contribution to get the talking started. Because remember ... I do love you  :-x

TIP 1: TAKE THE LEAD IN ROI CONVERSATIONS RATHER THAN UNDERGOING THEM

In less than 3 years, agencies will find themselves facing marketing effectiveness specialists asking questions about the campaigns they were involved in. As these consultants will probably come from outside the industry (c.q. McKinsey, Bain, or even us) they will not be interested in a cosy chat about the "message of the brand" or the "creative award that has been won". Instead, they will zoom in on the money the agency made, or lost, for its client. 

They will field very precise questions like: Why did you recommend to up-weight prime-time 30 second ads in urban areas when the data shows this has negligible impact on actual sales? Or: Why did you focus this POP campaign on family values as a brand driver when it is clear that value for money is what really moves people to purchase?

They will come armed with data from the next generation media and message optimisers, which already today can identify the initiatives that made money for the brand and even predict those that never will. And if you haven't got your answers straight, they will really go to work on you. As an agency, the choice is therefore simple. Take the lead in measuring and managing ROI yourself and be ready for the conversation, or prepare to be the lamb three years from now.  After all, the data they will use then, is being collected today.

TIP 2: DIFFERENTIATE YOURSELF

Here's a challenge. Look at any list of major international agencies and tell me in one word how each truly differentiates itself in the marketplace. If you can get beyond half a dozen unique value propositions, I want to talk to you 'cause I ain't seein' them. Everyone has large networks, everyone is creative, everyone has the best people and everyone has a bunch of awards on their wall.

Now look at this from a client's perspective. Here's an industry which claims to advise brands on how to differentiate themselves in the market place, yet can't get beyond bland whiter than white rethoric itself. 

Rather than chase every budget-dollar through a middle-of-the-road positioning, agencies should clearly state what they are about and live by it. Clients should be made to love the agency brand or hate it, yet not even contemplate the commodity purchasing indifference they display today. After all, if you can't make your own agency stand out in the crowd, how do you expect your customers to ever take you seriously if you claim you can do it for them?

TIP 3: STOP ADVERTISING, START COMMUNICATING

By a cynic, the advertising industry could be summed up as a machine which is commissioned to blast inconspicuous consumers with as many commercial messages as possible, whether they want them or not. Then, once a year, it gets together to celebrate the team which has come up with the least intrusive, or even funny way of doing so, and highlights their achievement to the world as a sign of its professionalism. 

While exaggerated, I am seeing a rapid rise in the number of people embracing this view, and to pre-empt spinning out of control, agencies must let go of their addiction to channel-centric communication planning, and focus on what matters to the end-consumer. They need to start recommending initiatives which are rooted in respect, insight and passion. Messages need to be relevant and incite people to say "tell me more" rather than reach for the adzapper.

I realise this is a brutal step to take in a world where commission structures, industry habits, politics and people's beliefs have been formed by 30 years of info-blasting. Yet when facing the dilemma between walking a difficult path or staying on the route to irrelevance, I know which one I'd choose.

TIP 4: LEARN ABOUT THE STUFF THAT REALLY WORKS

As an ex-shopkeeper, I've built and managed stores from Killarney in Ireland to Kazachstan and I can tell you one thing, there's no medium on the planet that can rival retail and shop-staff. Yet most regular agencies haven't got a clue on how to manage the point-of-experience. The world has massively moved online, yet I still meet senior strategists who've never even visited Second Life or wrote a blogpost. NPS and WOM are the "technique du jour", yet only very few people I know really understand that they mean.

Agencies need to make sure that everyone in the agency's employ truly update their knowledge on the new media, creative and business landscape. If your people aren't tinkering with alternative media, branded storytelling, retail and the techniques that really matter, encourage them, force them and if they can't do it, replace them.

There is no reason to believe the current rate of change will not continue, so the communication game three years from now will look even more different than the way it does today. In my book, the time to upgrade your capabilities is when you still have some money in the bank to pay for it.

TIP 5: CHALLENGE THE INDUSTRY ORTHODOXIES

In addition to understanding the new realities, agencies should actively challenge the industry orthodoxies that have stopped making sense (or are close to doing so). In customer centric communication planning, it is non-sensical to separate media and creative. In a world where ROI rules, the lingering habit to link an agency's reward to the amount of "money spent" is simply archaic. With all the computer power and data flying around, media-buying by now could be as automated as buying shares on Nasdaq, yet everyone's still waiting for "industry entrant" Google to make the first move.

Looking at the way the advertising industry operates, it is easy to spot dozens of inconsistencies with the way the world is going. Agencies that want to succeed in tomorrow's market place need to resist the temptation to go along with the industry politics and actively start breaking bad habits. Silo-bashing will be a rough ride in the beginning, yet will eventually prepare them for a world which will prove unforgiving for those who haven't evolved.

TIP 6: IF IT HAS NO MEANING, STOP DOING IT

To paraphrase D. Ogilvy, most agency work still treats my wife as a moron and lacks any truly "BIG" idea. In short, it's ineffective and meaningless. And while I understand that it's often the client who waters down the boldness, the challenge I put is to fight back harder. The way the market is going only those agencies who really add to their client's bottom line in the long run will be the ones that survive, being average is a guaranteed path to irrelevance.

If you're truly passionate about what you do, connect your ideas to the brand's bottom line and have the facts to back them up, you have every right to speak your mind and be firm about it. Going along with the flow of mediocrity will not only devalue the perception of your agency, it will also make your brightest people leave. Be bold, be confident and if the facts back you, be prepared to stand your ground.

And if committee-ship risks you producing vanilla, remember Ogilvy's words that he would never let an account get so big he couldn't afford to lose it. Frightened agencies are lackies.

TIP 7: IF YOU DON'T WANT TO OR CAN'T IMPLEMENT THE ABOVE, HARVEST AND START OVER

There is no law against harvesting a brand name, and perhaps that's the way some of the established houses in advertising should go. Even if the middle-of the-road market will be shrinking, there's still money to be made. As long as the forces of conservatism are at work, having a clearly "conversative" positioning can be very effective (oh yes, but that relates to point 2 :-)

Some groups already seem to be going this way. Publicis is eagerly shopping for new boutiques, Carat has got great outfits like Isobar, who say the opposite of what some of the more traditional Carat media execs are actually doing. Betting on two horses is perhaps the wisest route if your a big player, and harvesting is part of that game.

Still, as a person reading this article, the question I dare ask is whether you prefer to be part of the agency that evolves to the next level, or the one that will get harvested.

If you're agency is already on the path I described, I applaud you and wish you all the best. If it isn't, join the conversation to change the industry. Or better, drive it ...