Will ad agencies be able to weather the mother of all storms?

24 Jun

dramatic storm clouds

Should ad agencies be worried that even their own staff think they’re not particularly creative places to work?

More to the point, these same staff nominate their clients as the most creative companies.

American advertising giant Deutsch has released an alarming – but perhaps not wholly surprising – report on their own survey of 1,500 people from the biz and it predicts more rough weather for the industry.

Among the findings, this one stood out:

Deutsch ad agency research graphic on who is creativeThe impact for agencies is significant in several ways.

Tangible: We will be challenged to attract and keep good people. In the past, being able to work at a company that dripped creative juices kept top-tier talent in place. When employees felt the need for change, they invariably headed off to another agency, either for greater creative freedom or the cash. Now, the bigger creative opportunities may seem to be with the clients rather than the agencies. And we all know who has the cash these days.

Where are young people coming into the business going to make of this?

Intangible: Ad agencies will lose more of their swagger. Mad Men is all fine and good, but the brazen strut and obscene spending days are long gone. In their place are lean shops with tight fiscal control and multi-tasking employees. Media commissions are gone, competition is fierce and the office bar is shuttered. One might reasonably consider what the reputation of ad agencies will actually be in another 5 years.

Tangible: As clients get more creative, agencies become more redundant. If companies like Google are hiring away ad agency staff and building their own marketing empires internally, what need of ad agencies at all? To act as incubators for creative talents? To be the Google farm team?

Intangible: We will lose our cultural influence. Traditional media is where agencies have shone. With ad spend in print and broadcast down, and the big ideas happening in strategy rather than execution (by example, location-based and hyper-marketing), will we have anything to brag about at parties anymore? (“Did you catch the smart ad that referenced the content in your email?!”)

Here are some possible ways forward:

Embrace our role as experts in consumer behaviour. That’s the high value work that businesses want. They know the landscape has completely changed in the past 5 years and they are scrambling to adapt to a super-powered consumer. They could well turn around and build their own internal research departments, but they are focused on process, product and service developments, and digital and mobile shifts in their business. So it’s high time agencies owned this loud and proud. Our strength is our understanding of the way consumers think, feel and act. Businesses are business-centric. Agencies must be consumer-centric.

Build niche expertise. There are myriad businesses out there that aren’t huge and can’t create their own marketing departments. Many have niche products that are aimed at niche markets. Agencies that abandon the generalist “full-service for all types of businesses” position and instead become experts in a particular vertical will attract those companies.

logo redbird communications victoria bcBy example, Redbird here in Victoria has adopted a strategic direction of raising awareness and changing behaviour. This niche position means they won’t be just another do-it-all agency in the deck for potential clients to shuffle through when they’re hunting for marketing and advertising support. Expertise will bring some of that swagger back.

Stop calling ourselves ad agencies. We barely even do ads anymore. Instead we help create experiences between businesses and consumers (yes, it can go both ways). That could be by offering up insight about the in-store environment, by repositioning the brand to own a more profitable and engaged area, by aligning the internal sales and marketing processes so that the customer has a more consistent brand experience.

It could mean asking the consumer what they value, or figuring out how to get a crowd to show-up at a particular time for a product launch using mobile technology. The list is endless.

We are doing these things already. Sometimes we even write ads.

But calling ourselves ad agencies suggests that it’s business as usual. In the industry, we’ve known that hasn’t been the case for several years and have been spinning a revised version of ourselves back into the market. What the Deutsch research has made clear is that even agency employees aren’t buying it anymore. That’s the mother of all crises right there.

Batten down the hatches.

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5 Responses to “Will ad agencies be able to weather the mother of all storms?”

  1. Mike Fromowitz June 24, 2012 at 1:36 pm #

    The ad agency of the future isn’t.
    Maybe it’s time to think like Japanese clients. Hire brilliant creative gurus and let them take the advertising and marketing lead.

    • Doug Brown June 24, 2012 at 3:42 pm #

      Or come at it from the other direction and infiltrate the clients to change the products and services they are bringing to market, such as Crispin Porter + Bogusky and Sid Lee have done so effectively. Thanks for that comment Mike!

  2. consortium brand management agency October 4, 2012 at 3:13 pm #

    I was curious if you ever considered changing the page layout of your blog?
    Its very well written; I love what youve got to say. But maybe you could a little more in the
    way of content so people could connect with it better. Youve got an awful lot
    of text for only having 1 or two pictures. Maybe you could
    space it out better?

    • Doug Brown October 4, 2012 at 4:35 pm #

      Thanks for your recommendations. I’m a bit confused by your use of the word content: you suggest I could use more but then in the next sentence say I have too much of it for so few pictures. Hm.

      I believe that my audience doesn’t need a multitude of pictures to get through a post. People will read what interests them. Sometimes it’s a blog post.

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  1. Daredevils wanted « Dougbrowncreative's Blog - June 27, 2012

    […] few days ago I wrote a post about the perception by people who work in advertising that it’s no longer a particularly […]

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