We spent a lot of the summer visiting the senior executives at major agencies, talking about the world, figuring out what we could offer them and what they could offer us. It was an interesting experience because the overwhelming sense we got was that the communications world was on the cusp of a big transformation.
The structure of communications in large companies is that comms and marketing directors come and go. They have between 18 months and 3 years to make their mark and they depart for another brand and another gig. The agency world is structured to respond to this. Every few years a major account is repitched as the new guy or girl comes in, and everyone does their best job of reinventing the brand, putting a new stamp on it. All of these pitches are done on spec, rather quickly and with very little budget for detailed research. The results can sometimes be wonderful, but they are overwhelming driven by anecdote, by instinct and by sheer creative flair.
Brands and businesses in all the all the other aspects of their existence operate a very different ecology. They try to acquire parters, resellers, customers with long term value, cherish them, develop them, nurture them. An 18 months or even a 3 year relationship would indicate a major failure. Real value comes from consistency, honesty, trust built over a long period. The lessons learnt by brands who listen to online conversations are that their good name is hard won and easily lost. Social media marketing when it is effective attempts to build on the micro-interactions (thank you David Armano) of brand and customer. Spending is on good customer service, small but incremental improvements in product. Not on bold statements.
So the big agencies like Tribal DDB are launching start ups (step forward Radar DDB) created from a core team based on one techy, one adman and one PR person. The structure of the new agency has to be more geared to creating longterm value by doing small things well over a long period. Customer understanding is very important, as is a longterm relationship with the client.
This creates a challenge on the client side too, because the client to be effective needs to be in place for longer. Marketing people need to be recruited from customer services, from product research, from PR. The marketing of brands and companies in a bold, splashy cycle with a 2-3 year interval won’t go away, but it will gradually lose ground to an approach based on slower, incremental changes. This is the “everyday value” idea of the retailers. It brings us closer to a view of the brand being driven by customer experience, not by billboards.
The business of Market Sentinel and companies like us is not data, but intelligence. It is about discovering the relationships between brands, businesses and their stakeholders and helping our clients find the right metrics to discover what they need to know to grow their business. What we have been discovering in the summer and since is that there are some agencies, or teams within those agencies, who instinctively get the importance of using the technology of the web to understand and link with the customer. Beeline Laboratories, Edelman, Web Liquid, KMP all do a good job here. But their lives are still difficult. The world is still set up for the old way of doing things.
In the meantime the impact of the credit crunch is like a glacier bearing down on the industry, ripping apart traditional structures and budgets, destroying the fabric of the old agency. My hunch is that these techy agencies, with their emphasis on technology and long term relationships and with their lower cost structures, will inherit the world.
Nice post. Surpised you didn’t mention We Are Social in the context of agencies who instinctively get the importance of using the technology of the web to understand and link with the customer though…
In short yes, the techy-agency does exist, but they make sure that the technology is not on show, that the idea and the engagement are what customers engage with, not the technology that supports it.
As you are probably aware, there are many creative and pr agencies out there who want to implement (largely) good ideas but who do not have the technical skills to create it.
On the flip side, there are plenty of techy agencies who do not have the “slight of touch” and soft/creative skills that social media requires.
In my mind, the agency that will win through will be people like Robin’s (and KMP) who can manage both the relationship building side of social media as well as build the tools that make social media so useful…and who can offer strategic recommendations based on fact (or some fantastic buzz/sentiment monitoring and influencer analysis!)
Maybe.
Ogilvy has been the steward of the American Express brand for 50 years. Same with Coke and McCann, BBDO and Pepsi, Levi’s and FCB. O&M in particular talks about “Brand Stewardship” which defines the role of the agency over time in the face of changing personnel on both the client side and account team.
My point is that consistent execution over time has always been required to build brands. What’s changed is the nature of that execution; the new tools and approaches required to be effective as we move from the era of broadcast media / mass marketing to the era of social media / interactive marketing.
The big agencies of today almost all made their name in print media, then were able to make the transition to television. Social media is fundamentally different from either, and the established agencies are struggling to deliver what brands need to be effective in the next wave.
And what is that, exactly? I call it scalable intimacy and think the agencies that can deliver it will dominate for the next 50 years.
Interesting article and some insightful comments, especially from Paul F., I too think that only the ‘techy agys’ with the ’softer skills that Paul refers to will win the day. I’ve seen many outfits who have one or the other of the ’soft skills’ or ‘techy skills’ but very few manage to embrace both of them successfully – the devil is in the detail.
Over the years i’ve seen numerous ‘few man bands’ evolve out of the bigger agys when one techie guy, a PR man and one adman leave to do their own thing. When the economy was good they would have plain sailing for a while…and then reach a stagnation point.
In this economy however, they will need a lot more momentum to exceed the ‘gravitational force/escape velocity’ needed just to take off. Beyond that, only the ones who can embrace the “scalable intimacy” that Mike T. refers to will succeed even in the medium term, let alone the long term.
Anyways, it will be a most interesting time watching the Phoenix that arises from the ashes.