Ready, Fire, Adapt!

 [Posted by Lisa Bradner]

My report on Adaptive Brand Marketing continues to generate coverage and comments positive and negative in both the US and Europe: see links here for Marketing Week and AdAge.

The Ad Age piece in particular is interesting to me.  While I’m not fond of the “we haven’t read the report but here’s what we think” approach, I do appreciate the folks from BBH Labs weighing in and sharing their vision of what the future adaptive marketing organization looks like. Several of the things called out on their list are in my report as well—although anyone who’s read Dave Frankland’s recent report on customer intelligence, "The Intelligent Approach to Customer Intelligence" knows that equating this function to market research doesn’t’ scratch the surface of everything that is involved.  

What I am concerned about is the attempt to bring adaptive brand marketing down to a list: lists won't get us there. We need to fundamentally rethink the people, process and technologies we use and, take on hard issues like organizational structure; partner relationships, compensation and metrics, or this just becomes another reinvention activity that stops short of real change.

My piece is neither an indictment of agencies nor of brand marketing organizations. It is an attempt to begin the dialog about what we keep, what we give up and how we make our relationships more productive for all parties. In my many conversations with practitioners on both sides of the fence (both for the piece and at Forrester’s Consumer Forum this week) I heard that no one is happy with the status quo and no one feels they have all the answers. I also heard a lot of smart business minds willing to wade in and take on the core issues and that excites me greatly.

At Forrester we'll be continuing to push the thinking on how to design, build and operationalize an adaptive brand marketing organization. As a 3rd party research firm we have the opportunity to look across both the agency and brand marketer camps and help surface solutions. The more everyone commits to talking about and thinking through the tough issues the better the solutions we'll create together.

So I’m here to give a shout out—there’s been a lot of noise out there but things are quiet on the marketing leadership blog—I hope you’ll change that: post here, tell us what you think, ask provocative questions and be part of the conversation.  Let’s make this something we build and grow together so we create lasting change not just another industry buzzword.

Post your comments here, or ping me on twitter @lisabradner

Jupiter Online Ad Forecast: Modest Growth in 2009

[Posted by David Card]

follow me at davidcard

In the face of overall economic turmoil, advertising spending appears to be holding up a little better online than in other media. Jupiter forecasts that US spending on online display advertising will end up growing 12 percent in 2008 to reach $8.3 billion, then slow to an eight percent rate in 2009, when it will reach $8.9 billion. Financial services spending on display ads will decline for the next two years, while auto and lead generation will remain essentially flat. (See US Online Category Advertising Forecast, 2008 to 2013.)

Paid search spending should finish 2008 with 26 percent growth, to $11.4 billion, then slow to 20 percent growth next year. Adding in Classifieds, Display, and Search, US online spending in total will finish 2008 up 18 percent, at $23.6 billion, then slow to 15 percent growth in 2009, and 11 percent in 2010. After that, depending on how the recession plays out, we should see a slight acceleration again, driven by display.

How does that compare to offline spending? We're projecting total offline -- including direct mail -- to be essentially flat in 2008, and down 7 percent in 2009. Broadcast TV should be down 8 percent next year, with cable not much better. Radio'll be down 10 percent, as will magazines, and newspapers down 15 percent.

Perspective? Offline was down 6 percent in 2001, but that was after an up year, rather than a flat one like 2008. Online grew 3% in 2001, and was flat in 2002. But search was just emerging then, and display was down double digits both years as dotcoms imploded.

So it looks a little ugly, but it's all relative. Hey, we're still expecting growth. Relevant research for thriving during the downturn:

Ad Sales Strategy for online media

Can Marketing Deliver Growth in the Downturn?

Recession Marketing strategies

Agency Digital Strategist: What's Next?

Let’s say you're a traditional agency who gets it.   Depending on the size of your shop, you’ve probably hired one or more digital strategists who are bringing new technologies into both agency culture and clients’ business. 

What happens to these guys later? 

That was the question framed by an agency leader on a call I had earlier this week.  “What is the career track for the digital strategists at my agency?”

Obsolesce.

No, it’s not as bad as it sounds.  But if digital strategists do their job correctly, they should do themselves out of that job.  My reasoning:  once digital is firmly entwined in an agency’s approach and thinking, that role of cheerleading digital shouldn't be neccessary. Three years from now, if one guy is pulling an 'integrated' agency’s digital offer, it sounds to me like a road half-traveled.

The career path for a digital strategist should be a senior agency role, in planning, client management…ideally with a portfolio of clients who are early technology adopters.   But their game shouldn’t stop with digital.  They and their teams should manage the whole media mix.

So the bottom line is, digital strategists should become as integrated as the rest of us. 

Evaluating your media agency

One of my colleagues will soon be launching a "Wave" for media agencies.  For those of you who may not know, a Forrester Wave is an analysis and evaluation of a particular market. 

A critical step is defining the 80 or so criteria on which the agencies will be evaluated.  These criteria will also be made available to our clients so they are able to customize the output - or rating - based on their needs.

Among many others, we'll ask and examine these agencies' media buying and planning offers and how they execute; their clients (including retention rate); their corporate strategy; their ability to help deliver insights on specific audiences; and of course, how they approach integrated - or cross-channel - media campaigns.

What are the most important criteria for you?  If you're an agency, what do you expect to be judged on?  And if you're an advertiser, what are the make or break characteristics of the partners you work with? 

What IP for Agencies

Most - vocal - readers agree that ad industry value is heading south: both overall or if one zooms on an individual agency (thanks to hammerandtong for his comparison of WPP’s and aQuantive’s market value). 

The agency view is great context, but at some point, I would still like to have a look at the history of the industry and compare the part of the pie agencies have gotten.  However, my friends at the DataCenter at Ad Age have assured me that would be extremely difficult, given the different ways of counting revenue over the years.  Any ideas welcome.

I do wonder at point things began to go sour (30 years ago, 20… 10?) and if there is an indication of a way out by untangling history...

While retrospection may be helpful, I’ll get back to the (nearer) present. When Pete and I were working on the Connected Agency research late last year, we were quickly convinced that agencies needed new IP to save their skins.  They needed to invest to create new value. 

The intellectual property that we put forward is deep consumer knowledge. In short, this translates for marketers as the promise of better performing marketing activities. That consumer knowledge is the driving center of a Connected Agency.

Off target? Far-fetched?  Or spot on?

What do you think?  Is IP the right pursuit?  And if so, what IP must agencies develop to keep themselves relevant for the next 20 years?

Ad Industry Value: Up or Down?

Last week, while France, I, and indeed nearly the rest of Europe enjoyed long, bank holiday weekends, Ad Age heralded digital as the savior of agencies in their 64th Annual Report.   Sure, digital is a great ride.  And now, with marketing services, drives up to half of the billings in the top 4 groups.

But has digital really been as good as all that for agencies’ business?

Digital requires a different business model, often very different expertise and specialized competencies.  Add to that the complexity of good digital marketing, the blinding innovation of the digital space…and the last minute technical glitches that no one seems impervious to, pushing up time spent and project cost.

But agencies didn’t have a choice, right? 

I had an interesting discussion with a former collegue, the head of an international agency within a large group.  We were speculating as to the overall value of the advertising industry.    Has value been destroyed or created?  Is advertising a more valuable industry than it was 30 years ago? 

And we worried that increasing pressure on costs coupled with the continuing need of lots resources - junior and less expensive - was driving a negative spiral.  Among other things, this spiral makes it hard for agencies to hire people at their just value, often driving the best young graduates elsewhere (as client-side marketers, or to another industry altogether). 

The ad industry has lost its spark. 

The Conflict of Interest of Change

Both Agencies and clients have asked who and what type of agency will best drive the evolution to a more integrated and ‘connected’ agency.

I recently heard much frustration from one large advertiser who sees his primary agency partner buying - quite largely - into digital, mobile…yet the agency still delivers ad plans to his marketing team which are essentially 100% television-based. A strategic contradiction that hinders his company’s evolution, “don't they understand that they aren’t helping me move to digital?”

Yes, I’d have to answer.  The contradiction hinders evolution… and keeps margins and operations securely in the more profitable old world, which the agency is better staffed and better paid to deliver. 

Hence the conflict of interest. The challenge to agencies is assuring current operations while building the future. Or, perhaps in some cases, just getting the most out of current operations.

Which leads to the question - what type of agency is best equipped to evolve: an agency within a large group with significant resources - keenly important for building consumer intelligence; or an independent player, with perhaps less to lose?

I have my point of view.  What do you think? 

Media Agencies' Content Plays seem One-sided

Media agencies have been moving aggressively into building branded content offers.  The lastest:  WPP’s Mindshare announced a reorganization last week, including the creation of a unit focused on making content. 

Integrating content and marketing messages certainly allows advertisers to sneak under the radar screen of ad-fleeing consumers; and reinforces the value exchange of entertainment for attention. 

But in the rush to create new advertising occasions, the most important piece is missing:  what about the consumer? 

Here’s what I mean: media is becoming more addressable, more interactive, more measurable.  An agency’s challenge in the near future will be moving consumers through their individual marketing funnels.  Yes, reinventing the front end - how to connect with consumers - is important.  But even more critical today is inventing the back end - knowing who to connect with and how. 

Content is just an excuse to interact and build a relationship with consumers.  If the content is not connected with deep consumer intelligence and individualized data, media agencies are missing half the opportunity.

Dell to Agencies: "People are most important"

When I spoke with Casey Jones at our marketing forum, he cited WPP’s ability to recruit as the deciding factor in his choice.  Building - and keeping - the right team on his business is his priority. 

Casey even went so far as to say “What’s important is the talent of your team, not the brand of your agency.”

How many of you advertisers agree? 

Like the proverbial shoemaker and his kids, agencies seem to miss on their own professional advice:  helping their clients experience the value of their brands.  The impact of acquisitions, extensions, staff turnover, the tendency towards ‘juniorizing’agency teams…?

I’d call Casey’s comment good news for talented individuals and a challenge to agencies: How will agencies define and prove value beyond that of a network of talented individuals?  And is gathering these individuals under one roof enough of a differentiating offer when the internet allows talent to network and connect - together and with the client? 

In 2007, Dell went to WPP to pull together their advertising dream team; their choice could be different next time. 

An Agency's First Step To Getting "Connected"

[Posted by Peter Kim]

Thanks to Mary Beth Kemp, my colleague and co-author of The Connected Agency report, for taking the lead on this new Forrester blog called Agency Futures.  So I'm cross-posting this from our Marketing Team blog.

A lot needs to happen before agencies get Connected.  The clear first step for most shops is building digital acumen.  So I've published a new piece called "Agencies Must Build Digital Skills To Survive" - pretty much to the point, eh?

Here's a [long] excerpt:

Traditional advertising agencies -- marketing services providers that have built global brands through mass media --€” need to prove their digital mettle now more than ever. Although late 90s startups like Scient, Viant, and ZEFER flamed out, firms like Critical Mass, Organic, and Avenue A|Razorfish have risen high above the dot-bomb wreckage and are well-positioned for success today.

Clients are shifting business to digital shops, and consumers have turned away from media channels that built the agency industry and toward emerging Internet media. Ad agencies must build new interactive competencies quickly in order to succeed. How? They must build digital skills with a three-tiered approach of establishing digital commitment at the executive level, retraining existing staffers, and building a pipeline of future talent.

So what's the secret to success?  Hire a chief digital officer?  Tell all your staffers to get on Facebook?  Go 2.0 with your web site?

Maybe all that and more...

[Posted by Peter Kim]

[Posted by Peter Kim]

[Posted by Peter Kim]