Tag Archives: creative services

Explore the Polls: What Will Replace Ad Agencies?

Yesterday’s “Ad Industry Leaders Storm the Exits & Start Innovative Marketing Communications Companies.” triggered lots of comments, emails and calls. Clearly very topical so let’s explore further.

What do you think will replace the Ad Agency? Several forms of organization are being experimented with. Take the poll. Even suggest your own vision.

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How Ad Agencies Could Learn To Stop Worrying And Love Crowdsourcing

Is crowdsourcing a riot that'll wreck ad agencies or an innovation that'll save them?

Mention crowdsourcing over a meal with ad agency pals you’re likely to put them off their food, and you, for some time.

For a creative, liberal, experimental, edgy, fashion-aware, up-to-date industry, it seems advertising is very conservative and defensive about crowdsourcing ideas for their clients.

The most common reaction is “But ideas are OUR business”.  Perhaps. Even if you aren’t getting paid for your ideas because much of the industry is half-way between the old commission model and being hung on the FTE cross by Procurement (see earlier posts on this blog).

Last year Unilever used it, for Peperami in the UK, causing lots of dark muttering in the trade press. They used IdeaBounty (Slogan: “The best ideas get paid“) as lead agency and dumped Lowe from the brand altogether. Another key crowdsourcing player, BootB call themselves “The Borderless Creative Engine”. Their web-site runs in 14 languages including Arabic and Simplified Chinese, proving their point. Check out the clients listed on both web-sites. Big names.

For Peperami it was discovered, once the feathers had been swept away, that the winning ideas were thought up by a copywriter in London and a Creative Director in Munich, both of whom had recently been made redundant. The selected ideas were produced through a specialist agency called Smart Works.

In the USA, Frito-Lay brand Doritos has made a Super Bowl Special out of crowdsourcing. This is the fourth year that they’ve put crowdsourced ideas to work. 4,064 videos were submitted this season and they’re all available on the Doritos “Crash the Super Bowl Contest” site. The landing page features the four winners and two runners-up. The rest are in a 362 page gallery. The Herbert Brothers (two then-unemployed guys from Batesville, Indiana) who created the Doritos big winner for Super Bowl XLIII in 2009, are also featured.

The top 20 commercials aired at Super Bowl XLIV this year include Doritos in 2nd, 11th, 14th and 17th places as ranked by the USA Today AdMeter poll. They also topped the Visible Measures most watched viral videos listing week commencing 1st March 2010.

Marketers turning to crowd-sourcing seems to reflect a combination of 4 things:

1. Frustration with the speed and calibre of ideas from their agencies;

2. Giving their less adventurous ad agencies a firm shove in a new direction;

3. Exploring ways to get more for their money, including better results;

4. Getting their feet wet for educational and publicity reasons. It certainly did the latter for Unilever with Peperami and seems to work well for Doritos where the crowdsourcing idea has become a key brand attribute.

Instead of panicking, perhaps the ad industry should take another look at crowdsourcing but with their innovation hats on. There’s a whole new model for the ad business here and when it takes off …

For those who still don’t want to look too closely, think of it as bringing in free-lances. From the whole world. And you only pay for the ideas you use. The best ones.

There will still need to be a strong ad team at the core representing all disciplines and collaborating closely with clients. Their responsibility, finally, will be the Brand itself. The core idea of the Brand will remain the preserve of that marketer/ad agency team, as will the management of the communication platform. It’s expressions of that core idea that will get “free-lanced”.

I wonder which ad agency will crack first.

Oh, hold on. Goodby, Silverstein & Partners managed the entire “Crash the Super Bowl 2010” process.

OK, then I wonder which holding company will crack first and buy BootB. Anyone care to bet?

5 Ways The Ad Industry Stumbled & 5 Ways To Rebuild It, Only Better.

Yes, you got burned. Now come back stronger!

Reading the trade press one would think the ad industry has suddenly and unexpectedly fallen on hard times.

It hasn’t. The current shake-out has been a long time coming.

Here are 5 industry features which combined to cause the collapse:

1. Miguided creativity. Many Creative Directors and their ad agencies shifted their focus and that of their staff, away from their real purpose.

They used to produce marketing communications to engage consumers, build brands and help drive sales for their clients. Now one would be forgiven for thinking that they prefer making ads for each other. Scam ads and festivals of self-congratulation have put this into sharp focus, making marketers question the professionalism and value of the industry.

Why did it happen? Ego, bad HR practices, poor leadership and forgetting the essential role advertising is supposed to fill in the marketing mix.

2. Laziness, Fear, Maybe Arrogance. Continuing to use Transmission Model thinking. ‘Brand advertising’, like 30 second TVCs. The industry failed to embrace the digital media era and become truly consumer/user centric; listening to them and letting them search for and find marketers doing the right things in the right places. Failing to be idea-focused and media-agnostic. Too many ad types tried to stick to what they were comfy with. Digital, direct, sponsorship, PR and events remained 2nd class colleagues in silos; afterthoughts to be briefed only once the Big (all too often TV) idea had been “cracked”, or were left out of the picture altogether;

3. Failing to add & track value. Trying to perpetuate an archaic revenue and overall business model with little or no value-based or performance-linked component in their remuneration. An approach where the value added is not tracked, recognized and as a result often not rewarded either.

4. Failure to invest. Take a good look at the holding company model. While there have been some benefits of size, have they improved what the ad agencies within them actually do? Not really. In fact, the holding companies have become distractions for agency management and hindrances to progressing the craft. This simply because they siphon profits from front-line companies which need the money to retain and train the best people, conduct research and pilot new techniques to add value to clients’ business (see 3. above);

5. Strategic blindness. Earlier, ad agency groups un-bundled media planning and buying from the development and creation of advertising which everyone seemed to believe was their main business. That divorced media strategy from brand communication strategy and handed over the data & analytics too.

More recently the industry failed to recognize the impact of online advertising and social media. Ad industry leaders are now under immense pressure.  Digital is for them a poorly understood rod with which they are now being beaten. Added to that, marketers made major budget cuts during the downturn, reviewed their approach to marketing and are demanding real results (see Value) whilst Procurement has also become a permanent stakeholder at the table (see earlier post Creative Services & The Vicious Cycle of Procurement). All rather challenging for the old school mentality.

Here’s hope for a brighter future.

Now marketer budgets are slowly rising again. The more sophisticated ones pulled back very little anyway, knowing one cannot cost-cut one’s way to market leadership. The problem for most ad companies now will be how to gain, retain and make money on a share of that re-instated spending because the business has changed substantially.

Here are 5 ways the ad industry can make real changes to evolve into a better professional services sector.

1. Focus on adding, and invest in tracking, the value you create. Ask “how will this improve our client’s business results and how will we track how well it does that?” If you can’t prove a clear connection to improved desirability, higher perceived value or better service perceptions, or to lower costs of achieving the same or better sales and branding scores for your client, think again.

2. Return to deeply understanding the target prospects. If you know them deeply – especially their motivations, communication profiles and online behaviour – and better than your clients, you will be able to lead your clients professionally producing work which truly adds value and justifies a decent margin.

3. Charge, and get paid, for Ideas. Marketers need to pay you on the basis of the ideas you create and implement and the impact of those on their marketing KPIs. Paying you on the basis of the media spend behind your ideas is lazy and unprofessional on both sides. Yes, it has been a long standing tradition that clients get free ideas, but as both sides must finally have noticed by now, the world has changed and the old commission model is broken.

4. Embrace Procurement. Procurement is here to stay in contract negotiations, in getting paid each month and in annual or semi-annual performance reviews. Learn from it and make the most of it. Clients want results, so negotiate with them a data-based way to track your performance on appropriate KPIs and make sure they commit to providing the data needed from their side to do this. Learn, and run your own company with the same degree of attention to supplier costs, results, transparency and fat trimming or frankly, you are doomed.

5. Have fewer, better people who are better paid, better equipped and better led. Yes, there is such a thing as critical mass, but you need to be pragmatic and deal with the realities of your business. Size is not everything. Clients want leadership and service from experienced, quality people and will pay for the value they add. If you don’t have sufficiently skilled, motivated, talented people to deliver on that, you will not succeed, let alone prosper.

Get it right and you will keep the business you have, earn bonuses and better payment terms on it, win yet more business and have future clients and talented potential staff banging on your door.

OK, you may be feeling like you’re sitting in a pile of ashes. Rise from them as something a whole lot better. Good luck.

Creative Services & The Vicious Cycle of Procurement

ouroboros_by_Saki_BlackWing

ouroboros by Saki BlackWing

Creative services aren’t generic.

They are unique. They have to be. Without uniqueness they can’t add value. That goes for content like advertising, design, games, on-line worlds and music. It goes for idea based consulting like branding, communications and media strategy and the plans to implement them.

Their uniqueness depends on the backgrounds, experience, inspiration and leadership of the people creating them. They are creations of unique individuals for unique circumstances.

Experience and the ability to produce high quality, unique creative ideas set salaries for those who create them. The less one is prepared to pay, the lower the quality one should expect.

The increasing role of procurement in buying creative and strategy services from advertising, media planning and branding industries may indeed save marketers some money, but can have undesirable consequences.

Not least the loss of the very thing that makes creative services valuable – their unique ability to add value to the procurer’s business.

The result? As procurement drives down the cost of buying those services it will drive down their value. With that will come dissatisfaction with those services, canceling of contracts and the appointment of the next low cost bidder. The vicious cycle will continue and the problem will worsen.

The solution? Innovations in procurement to correctly value creative services. This is easier in the on-line space where accountability is high. Off-line it may take longer.

At the same time the providers of creative services must improve leadership, innovation and accountability to improve their ability to deliver and value what they do.

Finally, both sides must realize they share  the common goal of adding higher value to brands and their owners through superior creative ideas and innovation.