Agencies Enter Into a "Great Race" For Relevance

 

Agencies appeared in the mid 19th century as retailers and manufacturers recognized they could communicate with the masses through the explosion of newspapers during the Industrial Revolution. From that point on, agencies adapted to changes in mass media (e.g. TV, radio), society and business. That is, until the rise of the Internet at the end of the 20th Century. At that point, most traditional agencies (whether creative, PR, full service or other) were slow to adopt interactive skills which opened the door for a new kind of interactive agency that would work with a new kind of marketer focused specifically on the digital space.

 

Yet now we're entering into a new era of marketing, an era that Forrester calls "The Adaptive Marketing Era". In this era, interactive and digital technologies become the foundation of marketing communication. Agencies today recognize this and the recent explosion of social computing has in many ways broken down the walls between agencies as virtually all agencies are trying to own it for their clients. This in turn as opened a door for a new set of specialty agencies and consultants (e.g. Powered/Crayon, Converseon, etc.) and has created some significant confusion for marketers as to the roles of agencies. They see Crispin Porter + Bogusky build out the skill sets of an interactive agency, interactive agency R/GA win the role of lead agency for Ameriprise, media agency Starcom Mediavest reposition themselves as a "human experience" agency focusing on a more holistic media experience, and they see PR agencies like Edelman make significant strides into the interactive space through social media. This leads to frustration for marketers. According to our research, most interactive marrketers don't trust their traditional agencies with digital work and yet most don't believe their interactive agencies are ready to lead yet either. All of this creates somewhat of an agency purgatory - where different agencies try and take on each others' roles but no one type of agency is ready to take over.

 

 

 

Until the agency world shakes itself out, interactive marketers should clearly definte the roles of their agencies and look to the agency's heritage to identify their core strengths. This is especially true in social media, which is more of a horizontal than a vertical within an organization. While many agencies claim they are experts in the space, in most cases they are experts in their specialty area. The reality is marketers should own their social media strategy since it is about creating direct conversations with consumers, with agencies playing a supporting role helping develop strategy, identify influentials, build out communities and infrastructure and help with analytics (to name a few). 

Comments

Small Agencies Gaining a Foothold?

The last 6-12 months have given my small agency an opportunity to compete (at least at some level) with larger agencies. We were nimble enough to get up to speed quickly on social media and inbound marketing, which has proved challenging for larger agencies with large ongoing accounts that are not so quick to change. Our niche is smaller b2b and b2c companies that need a marketing boost in this tough economy and are ready to shift resources from print and tv/radio into interactive. As in any changing environment, the early adopters get the best benefit, but the long tail lets other agencies share the wealth later on.

If Digital Agencies ARE Ready to Lead, Will Marketers Follow?

I think Forrester has correctly identified this perceived gap between traditional agencies' digital expertise and interactive agencies' ability to lead, but "perceived" is the operative word. Looking at this problem from the point of view of an interactive agency that likes to dig its toes into the strategic leadership sandbox whenever it can, I would argue that enculturation plays a huge role in marketers' perception of what their interactive agency can and can't do. The precedent set a decade ago had traditional agencies in the driver's seat largely as a matter of brand ownership, with interactive agencies left to "translate" the brand online. Now that so much of brand perception is driven by conversations taking place online, that traditional power structure has the potential to be subverted by agencies that live and breathe in the digital space.

Because these old power structures are largely still in place, interactive agencies often have big political hurdles to overcome in order to get their big ideas for the brand in play. Before deciding that they can't trust their interactive agencies to lead, marketers need to clear some of these hurdles and give their interactive agencies a turn at bat. Here's an easy way to challenge your interactive agency on their ability to lead the brand: ask them to complete a brand audit using the social monitoring and measurement tools at their disposal. Test them on their ability to gauge the brand climate, uncover risks and opportunities, and offer new ideas. If they can't give you results, then not only are they not ready to lead -- they're not ready to be your interactive agency either.

Eric Anderson
White Horse

Advertising Agencies are Posers in Social Media

Great article. I conduct agency searches and have done agency reviews for Jenny Craig, Villeroy & Boch and Raley's Supermarkets.

My personal experience is that most agencies are social media posers.

They do not embrace social media for their own agencies yet recommend it for clients.

They don't walk the talk based on my experience.

Hank Blank
Blank and Associates

Old habits die hard

The problem for most traditional agencies are that the people running them
are still set in the old ways of making money based on media
commission rebates and subsequent services. Quite simply they
have large infrastructures that need to change with falls in advertising levels
and subsequent reduction in income levels they have not
explored new monetization routes because they don't know how to?
Also given the plethora of free to use technology out there
agencies are finding it hard to justify to clients their subsequent fees.
With FD's controlling marketing budgets now every pound/dollar counts.
Agencies must rip up the old ways of doing business and look at new technology areas
if they provide high quality campaings/solutions then they will be fine in the long run.
Start ups are changing the way they do business, if only the established ones took a real hard look internally at themselves then they will soon realize things have changed forever with the advent of social media.
http://www.Twitter.com/dmclive

RE: Old habits die hard

Ian you're right on with that comment. There's no doubt that changing a legacy business is very difficult - especially a business that has traditionally made a lot of money and had somewhat of a stranglehold on skills. There's no doubt a lot of startups are shaking up the marketing serrvices world and will continually do so. However, traditional agencies still have some leverage because they typically have experience leading brands, tend to be more agnostic across media and are pretty tied into their clients' businesses.

Ultimately it's about the brand

The general conclusions here are hard to argue with and I'm not surprised by these perceptions from the people surveyed -- clearly there are issues and turf battles to sort out. I think the challenge for interactive marketing agencies leading is that most audiences don't live just in social media. Whatever sort of agency is given the opportunity to "lead the brand" is going to have to be able to lead it wherever it lives, online or offline.

Search For Relevance and Reinvention

Sean:

These are some valuable and not too surprising findings. Thanks for that. Also, I think that your take on this is spot on. Social Media has been the catalyst for big and important changes that are taking place in C-Suites and communications companies everywhere. As a long time ad guy who started my career in the Mad Men era, I’ve embraced Social Media and have been observing and studying its implications very closely. Social Media has advanced well beyond being another form of media and morphed into the Fifth "P" of the marketing mix…People. Right up there with Product, Price, Place and Promotion. People Strategy is a game changer and it has huge implications for communications agencies. I believe that the ad business should see Social Media as a disruptive gift that demands we change the way see our business, fix outdated business models and usher in a new era of creativity. As you say, a search for Relevance and beyond that, Reinvention.

This was the subject of a presentation I recently delivered at the South By SouthWest Conference in Austin. “Why Madison Avenue Should Love Social Media – The Thoughts Of A Mad Man Turned Twitterholic”. Here’s a link to a downloadable pdf. http://bit.ly/dfDbEa

Keep the good information and insights coming.

Hank Wasiak

Re: Search For Relevance and Reinvention

Hi Hank,

"People" as the fifth P is a really intresting concept. We wrote something similar in our "Adaptive Brand Marketing" research in which we said there are a whole new 4 P's - permission, proximity, perception and participation. I think a lot of agencies get this, it's a matter of changing a big legacy quickly, which is never easy to do (you may know that better than me). Obviously not everyone gets it and the point of our research has been to give change agents within marketing organizations the ammo they need to get the right people thinking and acting beyond yesterday's model. You're definitely unique in your embracing of social tools considering your career history. By the way, I love the first day on the job picture in your preso.

Picture

Thanks Sean and thanks also for sharing other 4 P's - Permission, Proximity, Perception & Place. Hits the mark....I'll use this as part of my next class lecture at USC. As far as the picture goes, I was definitely not a Don Draper. As you can see, things have changed over the years. Hope I can put another one up in 20 more years.

Hank

Advertising Agency

BY the Blog "Agencies Enter Into a "Great Race" For Relevance" you are trying to show the best message behalf of Advertising Agency and its functionality. Its really a good blog...

Brand Relevance

The great race for relevance captures exactly what is going on in advertising. Some firms are going to define and manage new subcatories and be winners. Others will adapt and many others will become irrlevant. This race and how to win and avoid losing is the subject of my new book Brand Relevance: Making Compeitotrs Irrelevant. davidaaker.com