Without differentiation, what sets agencies apart? Trophies!
In the most recent poll of U.S.-based CMO Council, only 9% of senior marketers said they believe that large holding company agencies are doing a good job evolving for the digital age. For those of us who didn’t major in math, that means 91% don’t. I think that’s because those big agencies are trying too hard to accomplish the wrong things.
Clients ask agencies to get up to speed digitally, so agencies run out and get digital people. They buy digital agencies and try to incorporate them into their structures. They hire 22-year-old community managers. Most agencies these days can make a nice website or a cool app or create a social media campaign (and most can still make a decent TV commercial).
However, they are addressing the symptoms – not the real problem. That problem is that a lot of people think advertising has changed.
This has advertising people focusing on executional elements and not strategic-level thinking. Agencies are running so fast to add digital, social and mobile capabilities, they are not thinking about how it all links together. Or indeed if adding capabilities is the solution at all. And so in chasing the executional elements of a fast-changing world, they fall further and further behind. More importantly, they are being thought of as commoditized suppliers.
How do I know this? The first sign was the emergence of the procurement department in advertising reviews. Advertising margins are being squeezed because traditional agencies are not offering real strategic value. Instead they are executing strategy that comes from other places, often consultants. So like a light bulb supplier who sells on volume discount, agencies more and more are being asked to cut their “blended rate” by the penny pinchers in procurement.
The second sign is the industry’s increasing focus on award shows. Back when ad agencies were acting as real strategic partners, each country had their own advertising award show, such as the Marketing Awards here in Canada and the Clios in the U.S. Creative connoisseurs also entered the One Show and maybe the Art Directors Club show. Now there are the Applied Arts Awards, The ADCCs, Bessies, the Tomorrow Awards, the Clios, The One Show, The D&AD, The Effies, The New York Festivals, Communication Arts, The Billies, The Obies, Cassies, Cannes and about a million more. Award shows are getting to be as a big an industry as advertising itself.
Why so many award shows? Are we that egotistical? No. We are that devoid of real differentiation. If you are no different than any other agency, if you are not offering companies high-value strategic thinking, then the only way to stand out is to win more awards than the other light bulb manufacturers.
It’s clearly time to get back to thinking on a strategic level. It’s time to create a structure for a company based not on selling units of time, but on adding true value to your clients on a strategic level.
This is where we bring things back full circle. Advertising, on a strategic level, has not changed. It is still about connecting people with brands. Advertising will always be about this, and if you stick to this fundamental truth, you won’t go wrong, won’t get caught in the trap of chasing the latest shiny object that comes along.
The answer lies not in hiring more programmers and community managers, but by taking a step back and looking at the big picture. Instead of seeking the next new media, ask yourself, what experience can we create that transforms our organization into what we want to be? How can we add value to the brand experience? How can we unite all of our efforts, internal and external, across all touch points so that we are always pulling in the same direction.
Now one might argue that I myself have radically changed the way I look at advertising. After all, our company is a digital and social media AOR on as many clients as we are traditional AOR. However, I would say that I have embraced our new world and changed how I execute the work I create, but not at all the essence of what I do. I am still passionate about finding ways to connect people with brands, just as I did when I wrote my very first ad: a newspaper ad for the Montreal Gazette.
Andrew Shortt is founding partner at Toronto agency HQvB.
