Does the techy agency exist?

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. …