Wall Street Journal marketing reporter Suzanne Vranica notes that Weiden + Kennedy’s recent dismissal by Nike is “a digital wake-up call for Madison Avenue, which has been slow to embrace digital media.”
“Gone are the days of one shoe, one advertising campaign. Now you’ve got to engage consumers on every level,” Trevor Edwards, Nike’s vice president of global brand and category management, told the Wall Street Journal last summer. Nike’s made some valiant efforts in new media, and Weiden’s been the agency for a lot of it.
Just a hunch, but I’m sure there are two sides to the story. It’s not just the agency’s fault. Madison Avenue’s failure in digital media has several causes:
- Companies and agencies move way too slowly. Online, you don’t have months to create a campaign. You need to be ready to plug and play. That requires a willingness to take chances, to be transparent, and to let consumers respond.
By the time it makes its way through corporate, legal and PR, the online opportunity is over. Attention is short online. Agencies and their big, over-staffed clients don’t move fast enough. The race is to the swift, not to the lumbering dinosaur.
- The agency business model is broken. Companies are still asking agencies (and agencies are still agreeing) to make creative pitches without being hired first, or paid.
You want to know how an agency thinks, look at their current and previous work. You like their approach, hire them and pay them to come up with something equally creative for you.
- Online success is all about hyper-focus on niche audiences.
Ad agencies are still taking a buckshot approach that is supposed to try to appeal to the masses. But the Internet is about niche marketing.
You want to reach bloggers? Start hiring real bloggers who know the terrain. Don’t put up some lameass fake blog.
The fact is, you can’t create effective advertising for blogs or other social media sites unless you know them as a participant rather than an observer.
- Agencies are paranoid. They’re hesitant to look beyond their walls for creative consultants who have a successful track record in new media. A lot of us don’t want to work for big agencies, or work in cubicles.
- Agencies seem to be quite sure that they already have digital talent and corporations seem to believe them. But where’s the great work? Subservient Chicken was ground breaking. Have you seen another great campaign from Crispin + Porter? Please, show me a big agency that does consistently great work online.
Ad executives say more mainstream ad firms could lose business unless they figure out how to better integrate digital media, Vranica wrote. In fact, Madison Avenue ain’t seen nothing yet. There’s a tsunami of change coming at you.
Great article, a couple of excellent points come to mind:
1. Agencies are best at creative… but for some reason, many clients still source production to them. I have an acquaintance at a large European FMCG company who decided it was time for a change. He installed a Marketing Resource Management system to operationalize his marketing procurement, and let agencies focus on creative. He’s saved 80% on production costs (which is in the low 7 figure € region…) He has ploughed these savings into paying agencies OVER market rates, which results in superior-brand competitive advantages…
2. There is much talk these days about the “New Digital Supply Chain” – which looks to automate creative workflows and reduce operational inefficiencies. For example, at MarketForward they have productized this into a full fledged Digital Asset Management system which optimizes the client/agency relationship… and lets agencies focus on what they’re best at: creative.
Some of your audience may be interested in the event for which I am the marketing manager, Henry Stewart XVII, which focuses on these very topics. We will be in New York at the Javits Center on June 6 & 7 (www.damusers.com)
ad agencies, as well as media agencies and the rest of the companies on the adv bandwagon are part of huge financial corporation: they cannot bet on new form of revenues. and that’s why most of them are in trouble running behind all the hypes around.
“By the time it makes its way through corporate, legal and PR, the online opportunity is over.”
Don’t forget committee. Corporations are notoriously risk-averse, and the committees that control the process have difficulty letting decisions get made without first talking the idea to death.
Excellent work here, BL.
The big agencies are scrambling to buy their way into instant digital expertise. I wrote about it today, and I quote Age’s Bob Garfield, who supports your point perfectly…
I wrote: The real challenge will be getting the ad giants and their new digital acquisitions to truly integrate the new way of doing business into the traditional advertising model. And that may be a bigger challenge than many think. Bob Garfield, writing in Advertising Age, says,
“In terms of culture, organization, expertise and compensation structure, a global ad agency can no more easily transition from a gross-ratings-points mentality to a world of aggregation, information, optimization and customer-relationship management than Young & Rubicam can transition from English to French. It’s two entirely different grammars and vocabularies. Not to mention revenue models.”
I agree.
Lemme guess Parry: you work for a big ad agency.
I like your point on the agency being slow. It makes me (indy designer) want to focus on being very nimble and conditioned…get my projects done quicker..and position myself that way, without compromising my mantra of customer intimacy.
Thanks
BL,
Excellent post BL. I think that until we convince clients to change their advertising strategies, there remains little hope of moving advertising agencies to change.
I would like to see some research regarding the effectiveness of various types of advertising. To date, I see lots of anecdotal evidence professing this or that, but little hard data. Clients aren’t likely to change their marketing habits without hard facts.
It’s not just the agency that’s slow. The client approval process is the dinosaur.
Just saw in Brandweek.com that marketers who are rushing into Second Life are not getting results they had expected. The article says many marketers are treating Second Life using the same methods they do for traditional advertising, and it’s clear to users that many marketers put something up but never return. They don’t get that it’s supposed to be interactive.
This is another example of advertisers and their agencies jumping into things without truly understanding. They’re responding to the hype rather, but not looking at what’s behind that hype.
FYI, the story is at http://www.brandweek.com/bw/news/recent_display.jsp?vnu_content_id=1003563242
This post is right in my wheelhouse. The agency model isn’t just broken, it’s obsolete. And, sadly, it’s my experience that the agencies are not the first, second or third to jump into new media ideas …. they lag farther behind even that.
By the time they try something new, it’s old. Because they are afraid to look outside for help. Because they don’t understand permission marketing. And because they’re too stubborn to tell a client, “Don’t spend your money that way.”