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Tuesday, July 16, 2013

Ad Agencies Fail To Lead


I hear many stories about ad agencies and their failure to lead or innovate.  It is especially troubling when they have an opportunity to take the reins and fail to do so.  What follows is just one of many examples I have seen or heard.

Just three years ago, I interviewed a wonderful executive who had been doing mobile marketing and advertising since the mid-nineties; she started in mobile marketing long before most of us even knew it existed.. Not before or since have I met anyone with so much depth in mobile.   I thought she was extraordinary and had some amazing things to say about the future of this medium.  At the time we met, there was very little mobile advertising being done and I thought she could bring her expertise to an ad agency.

I was totally wrong. 

I called five agency presidents who were friends; two were from very sizable firms.  Only one of the five wanted to see her and he was from the smallest of the agencies I called.  The others, in one way or another, said that they didn’t know how to monetize mobile and were therefore not interested.  I told each of them that she could help them do that.  They turned me down and were not interested in meeting her.  The one who did see her told her that he didn’t have the money in his budget to hire her, even as a consultant.

About six months ago, one of the people I called remembered our conversation and asked if she was still available to meet, but she is now leading mobile at one of the major mobile advertisers.  Not surprisingly, rather than dealing with a traditional or even a digital agency, she has taken her business to a mobile shop.

In just these past three years, mobile is now in the forefront of media activity.  At least five ad agencies missed their opportunity to lead and, perhaps, get into the forefront of one of the most important trends in communications.

It saddens me to see that ad agencies can’t seem to get ahead of the curve.  Where are the visionaries?  Why can’t agencies push their clients into new technology and new avenues of creativity rather than waiting for their clients to push them?  Why can’t traditional agencies push themselves?

The traditional ad agencies have ceded innovation to the media and digital agencies, which now seem to be on the forefront of new avenues for communications.  It is a shame that the creative agencies just don’t seem able to get there.  One of the issues is that the creative ad agencies seem to be consumed with their existing day-to-day executional problems while the media agencies are always looking for new ways to grow and build revenues. However, by not leading in innovation, they put themselves at risk of losing even more credibility.

Once upon a time, ad agencies functioned in this domain.  Originally, television commercials were all sixty seconds.  It was agencies who developed the :30” and the :10.  It was agency research departments which developed psychographics and agencies which developed the concept of account planning.  Sadly, during the last fifteen or twenty years, there have been few innovations which have come out of the traditional side of the business.

Can anyone explain this to me and does anyone have a solution?   

9 comments:

  1. You make a good point, Paul, and you ask a good question.

    Here's an attempt -- one sort of answer.

    Innovations rarely come from the Traditional side of anything.

    I'm not just playing semantics with you. It says a lot that there is a Traditional side of the agency business and then there is the rest of the world. The non-traditional world. The Innovative side.

    The really sunny side of this story is that an entire ecosystem has emerged to seed, develop, finance, grow and systematize technical and other innovations. Most of this immense hive was non-existent 30 years ago, and the curve of it's growth has been exponential. The system has produced Google, a thousand smaller but useful innovations, and even more flops, but it has proven to be an efficient and effective way to drive innovation.

    Agencies and clients are fortunate to spend a great deal of time choosing from an immense buffet of marketing innovations, and have had to learn what and who to say "No" to, or face mortal overwhelm.

    Those of us who earnestly dedicate ourselves to doing the best for our clients spend our times creating, testing, and (yes) optimizing a mix of media and technology that would be entirely alien to an agency person of just a decade ago, and we do it at a speed that only a few geniuses at Intel could have predicted.

    The adoption curve of these technologies matches their reliability, ROI and risk profiles. Large organizations tend to wait for a technology to reach a scale at which it might reliable make an impact at scale.

    Large agencies work within the rhythms of their large clients, whereas smaller agencies, and agencies chosen for their focus on innovations, tend to be more interested in emerging technologies. They will try to seize the advantage ahead of the bigger advertisers and their agencies, to advantage their growth-stage clients.

    That's what we do. That's our entire focus. Finding the advantages for growth-stage companies and exploiting them to take share from the Traditionals. it's busy work. We're not taking any time to try to patent anything or to own intellectual property. Helping growth-stage companies and brands grow is full-time work.

    Anyway, that's the view from DiGo ;-)

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    1. Thanks, Mark. There is a lot of food for thought in your response. Growing brands is very difficult and complicated and getting more so.

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  2. Hi Paul,

    There are many types of creativity. The traditional agencies focus on the creative content of an advertisement. Great content then becomes household word and is spread out to all communications outlets, from TV to Mobile, etc. Advertising no longer lives by great content alone.

    The strategic $$ are geared to creativity of maximizing ROI and successful digital/mobile agencies always make that a powerful part of their presentation. Media companies have become extremely profitable because they analyze the millions of vehicles a client can use to put out their brand and more and more in real time can show ROI effectiveness while making quick adjustments to improve.

    Qualitative/Quantitative creative analysis is the mantra for successful advertising today and TV is a harder read than mobile and digital as it is currently, and I say currently, less interactive. Thus traditional becomes even more successful when they are able to address all venues of communication in a package.

    The giant traditional agencies continue to evolve in creating the 360 presentations but they often have separate profit centers which focus on their specializations to do it and compete for client $$'s.

    Agencies are now creating client agencies to speak with one voice in hope to better address the 360 brand presentations and ROI, but there is only so much talent out there and of course they have to work well together, :).

    The more things change the more they stay the same, :).

    Best Wishes,
    Barney



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    1. Barney, your point(s) are interesting. However, the complications of the business do not excuse agencies from innovation and leading their clients. That they have ceded this to media companies and digital agencies is inexcusable, in my opinion. As Mark DiMassimo stated above, it is the agencies job to focus on innovations on behalf of their clients.

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  3. "Traditional" agencies haven't failed to lead or innovate. Much less ceded anything to anyone. They just do what they do best!

    If they’re part of an agency holding company network, they've got everything covered in every way imaginable. Just pull in various parts from the holding company agency portfolio to fulfill whatever is required for the client and you’re all set. Advertising, sales promotion, media, shopper marketing, PR, direct, CRM, internet, social, mobile, e-commerce, whatever.

    The problem is when you get to the vast majority of agencies who are independents. No way they can hire and tool-up to deliver all of these things. So they are, by definition, at a huge competitive disadvantage relative to their larger holding company brethren when it comes to new biz.

    Of course, if an agency specializes in digital, social, mobile, whatever, they’ve got a good shot at winning something. They simply hire a lot of people who know a lot about these things. But what they know about branding and positioning which endures the test of time remains the $64,000 question (let's say three years in today's terms.)

    If I were a client I would first hire a “traditional” agency to tell me how to position my brand against competitors and what I should say to consumers so they might actually believe my brand promise. That’s what traditional agency people are trained to do before anything else. “Execution” in any medium, or through any technology or device, is simply a contemporary extension of those fundamentals. Technology and delivery systems will surely change, but the brand’s core values and promise shouldn’t!

    All of which is to say, there is no shortage of leadership or innovation in the best of "traditional" agencies. All depends on what the client really needs; and who they trust with their brand after all the smoke clears. Bill Crandall

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    1. I will leave the full response to my readers; however, I completely disagree with you. Three of the five agencies I mentioned were traditional and owned by the holding companies. It happens that it is the smaller agencies are doing the innovation such as it is.

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  4. Paul ... You completely missed my point, which was ... "Go to 'traditional' agencies (networked or independent) for genuine branding and positioning expertise!"

    How could anyone miss my point? Just wondering, Bill

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  5. This comment has been removed by a blog administrator.

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  6. I love this article and think it nails on the head why so many agencies have such a hard time driving traffic to their blog. I especially like your strong recommendation to focus on one or more specific industries/verticals. There is just way too much CSI otherwise.

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