Fast Company foresees disaster; Bloomberg Businessweek predicts prosperity
When it comes to self-criticism, advertising tends to be an industry that loves exaggeration, speculation and especially self-flagellation. We beat ourselves up – or tolerate being berated by others — on a pretty regular basis. Among the many predictions we’ve endured in recent years: The end of advertising as we know it; Agencies just don’t get it; The Chaos Scenario; and most recently Fast Company’s Mayhem on Madison Avenue.
The latter, which hit the newsstands last week (though appeared in digital form 10 days earlier) basically suggested that all those dinosaurs who’ve been bringing you the :30 TV spot stand somewhere between too slow to evolve and the edge of extinction. (Note that Mullen was included among those who’ve transformed themselves enough to count as evolved.)
This week, however, we have a very different story. Playing the contrarian, Bloomberg Businessweek suggests that the “lumbering advertising behemoths have advantages over smaller, cutting-edge firms.”
Writer Felix Gillette, after his obligatory references to MadMen, multiple-martini lunches and expense account dinners at Nobu (can’t have an ad agency article without recallying all of that cliche’d imagery for the thousandth time) eventually gets around to disputing the claim that the big, dumb agencies are dead. Instead he insists that the big, dumb agencies are actually kicking the butts of all the little digital shops with funny names. (That would be Big Spaceship, Blue Barracuda, glueisobar, et. al.)
The poster boy for the article is BBDO NA’s chairman and CCO David Lubars. Throughout a long career, Lubars has produced great advertising work: from his early days in Providence when we ran the Keds business, to an LA stint on Apple, to his time at Fallon where he launched the seminal BMW Films.
So maybe he’s not only entitled but correct when he claims in the Bloomberg story that the little hot shops, who are thumping their chests and declaring the end of mass marketing and the death of the Big Dumb Agencies, do so as a business posture, an attitude for journalists, and a sales pitch to clients. “They don’t believe a word of it,” he says.
Lubars goes on to talk about all the digital work being done at BBDO while the agency still manages to win best Superbowl spot.
One thing both Fast Company and Bloomberg do agree on is that we are in the midst of turbulent times. Digital shops strive to develop better creative ideas. Giant ad agencies throw money at technical talent in order to compete with the funny-named agencies. And no less than Google, Apple and Facebook, along with a slew of hybrids — from the likes of PSFK to multiple new retail platforms – all have their own opinions of where the industry is going.
So who’s right? Fast Company? Or Bloomberg? Will the big agencies adapt fast enough and prevail? Or will the smaller, more nimble digital shops with UX and engagement in their DNA win out in the long run.
Hard to say. One thing is certain, however. Given the fact that no other industry in the world seems to inspire more discussion, debate and analysis as the advertising industry, we can be certain the conversation isn’t over. Like the Energizer bunny, it keeps going and going.
wow this is so nice that you share a information of Fast Company foresees disaster; Bloomberg Businessweek predicts prosperity...
Fat players won't give up that easily indeed. I tend to believe Bloomberg too. It reminds me this article http://www.thomznotebook.com/post/2130634248/managing-an-advertising-agency-guide-for-dummies I agree with what the guy is saying. At least it's happening here already.
Why does literally every article on a constructive topic have to end with a black or white, zero sum question. It reminds of watching a discussion on CNN where top opposing forces are pitted against each other in a drag out debate ... a debate that gives no insight.
Some big agencies will survive and some small ones will flourish. Regardless of the size, they will have to be nimble and ready to adjust on the fly and take chances.
It's interesting you bring up David Lubars in reference to his big agency experience. You also include Fallon in the same sentence. Fallon, in its breakout period in the late '80s were anything but a big agency. Not only were they small agency, twenty some employees - they acted like a small agency. I worked in the Minneapolis creative community at the time and had numerous dealing with them and their design firm Duffy.
Considering the excellent insight I've read on other pieces you've written, I would have expected a little more here. I would have liked to hear your take on the what it's going to take for an agency to prosper in the upcoming year or two. That would have been an article.
I tend to believe Bloomberg. If I have $100mil + to spend on advertising can I trust a small shop. And is that shop small once it gets that kind of a client? I think once you start gaining $50m+ billings per year from clients you become a big agency. And nothing beats the 30 sec spot still. Nothing isolates a message like that. Not digital, not social, not 95% of mobile, nothing. I might rail on Nielsen thinking less people are watching but the ones who do watch you have their undivided attention!
I agree. With few exceptions, small small successful agencies become or start to act like big agencies. Do you say "no" to your biggest client as a small agency when they want to give you more?
I think while everyone looks at the big ole agencies, it's the big ole clients that drive them. And it's the big ole economy of consumers that drive them. Making money, not creative, drives it all. If creative sells for that client, then that will be the driving force. But creative isn't always what pushes a product to where a client want to be. Not everyone is a Target, sometimes they're a Wal-Mart.
I think when clients see that some old fashion techniques still work for old fashion products (I don't believe this for cutting edge products) we'll still see the advertising equivalent of the car salesman in a bad sports coat riding a camel on late night TV selling used cars, simply because it still sells used cars.
What brings in the bucks for a client is what will "win". That's my story and I'm sticking to it.
Edward- good ideas come from people- and depending on who you hire- depends on how good you are. Crispin was under 40 people when they came up with "Truth"-150 when they came up with "Subservient Chicken" and probably around 900 when they did "Laptop hunters" -which may not be considered great "Creatively" but it took a serious whack at "I'm a Mac"
Size has nothing to do with survival- skills do. Same think I learned in Special Forces.
The notion that big dumb ad agencies are so dumb that they will sleepwalk into oblivion is pretty hard to believe. The bigger you are, the harder it is to change. However, necessity is a great motivator.
Many of the most creative uses of tech will always come from the small digital shops, because there are less obstacles in the way. But the big boys still hold most of the cards.
If we're smart we'll work together.
dannydaley Hence the new models like Engine and Co: and also the mindset of places like BDW. We should also remember that there are many different size clients. Some will opt for the midzsize integrated shops, not wanting to manage multiple resources (studies show that many companies are overwhelmed with this); others will seek best of breed for projects; and yet others will find comfort in the holding company model. But all will be held to a higher standard and expected knowledge of digital and social.
Honestly, I don't see any blanket statement about the state of ad agencies being all that accurate. Yet, there is one fact that's hard to ignore and one that the USA is battling with China and other emerging economic powers. It has to do with the leap frog effect. Newer agencies don't have to retrofit an old culture and there-in lies the advantage and probably the only advantage.
In Crisis, Opportunity is the Sound of an Audience of One-handed ...
Six years ago, the cost of media versus creative ad accounts was 10:1. Media costs were destabilized by the internet, as well as other factors. What weu00e2u0080u0099re talking about here is chaos theory, a multiplicity of factors. The jarring Neilson report in what, 2005, that 1/3 of the young male demographic had left TV for video games as a main preoccupation rocked media buys. There are new ways to go where the people are. Before the whole industry had been running on rule-of-thumb for media; ROI was relegated to DM, and was considered coarsely nonmagical. The faltering of print media, as well as clearer stats for other media, real numbers of eyeballs and click-thrus u00e2u0080u00a6 new understandings of the value of word-of-mouth and the worth of influence u00e2u0080u00a6 social maps and the paralleling attempts of social media. There are new ways to account for social influence; Gladwellu00e2u0080u0099s connectors, mavens, and salesmen are starbursts in the social matrix. The effect of social u00e2u0080u0093 as tests run on pop songs have proven u00e2u0080u0093 is that the payoff can be larger, but it is also less predictable who the favorites will be. Print media, is stabilizing under a new split delivery. The funnel of the marketing system is still the same, and there are appropriate media for the basic processes of interest, research, purchasing, and retention, and for the customer profiles youu00e2u0080u0099re trying to reach. The ad business had become ritualized with media buying seasons, and formal reviews, and agency-of-record announcements, but that egg has been cracked open. I donu00e2u0080u0099t know where agency pricing stands today viz the media:creative ratio, but I would suppose media real estate has declined dramatically against creative labor. Everything has been bid down. People are examining measures they hadnu00e2u0080u0099t before, like my dad watching the instantly-calculated MPG gauge on his Prius, where before he used to floor it to the stop sign and then jam on the brake.
All in all, there's keeping up to do. Exciting times ... but no one is necessarily out of scale. If you're not driving change, you still have to watch the road.
I find it interesting and a bit sad that we are only now discussing the state of the advertising business. As consultants to other companies who have faced or are facing extinction, how is it those considered most successful might have thought this new paradigm might only apply to others? I assume that with all species in nature, the law of natural selection will prevail and those large shops that adapt quickly and smartly will survive, and the small smart and agile shops will grow to become large shops in the near future.
howlvenice I don't think there's been any shortage of discussion. Been going on for a while now, yes? Unfortunately it's been coming from the new, emerging, forward thinking shops, not the fat and dumb. There are some agencies that took a little too long to get here, but many have and are. Others were definitely too slow. And some just didn't realize the change was coming so fast. There is some truth to both articles. But one thing is certain. The proverbial head is definitely out of the sand now.
Advertising is missing a very big component, DIVERSITY OF COLOR,THINKING,GENDER,ETC
Advertising does not reflect the diversity in the world around them.. Still all white & clueless. were in 2010 if u take a walk down the hallways of mullen, crispin,gooby etc would still resemble the hallways of Don Drapers in the 1960s. Very painfully sad and true the only people of color these agencies will hire is the janitors and mailroom clerks. Your missing out on so many different types of people at your agencies.
DonDraper Could not agree more. Shame on the entire industry. All I can say on our behalf is that we are hard at work (and starting to succeed) with hiring more diversity. We have Asian, Latino, Black in a creative department that is still mostly white, but are acutely aware of the issue and working on it. We used to be located out in the suburbs, which made it harder. Since moving to the city it's been a much better situation for recruiting and attracting diverse talent.
Thanks for the comment and the point of view.
Ignore the big boys at your own peril. They've got the survival instinct of the cockroach.
Why should people listen to people like Lubars? Well, I remember "The Hire" back in 2001. It was a seminal piece of work from Fallon for BMW. If you were doing digital in 2001, it was the kind of thing that made you go "Jeezuz, I wish I had done that." Well, it was done by none other than David Lubars.
That's from here, btw :: http://iboy.posterous.com/don-drapers-revenge-its-a-mad-mad-ad-world
And this is defo worth a read :: What digital agencies are doing to ensure they are not the next dinosaurs
iboy Agree. Have known Lubars and his work for a long time, as referenced above. Thanks for the links. Appreciate it.
Thanks for bringing this up. I read the Fast Company piece last week, and actually came up with a question for the MDW panel this week which didn't get posted (I was on the road).
A lot of the small shops were born out of the need for energetic, highly creative & less bureaucratic teams that could serve up digital campaigns and maximize consumer engagement (i.e. abandon the big ad agencies' web banner --the first (lame) effort at digital ads). The thing is, ten years later, big ad agencies have had a chance to learn, reorganize, adapt. I actually believe that a group of the big ad agencies (those that have adapted and are putting out great work) are better set to deliver integrated campaigns that don't neglect traditional media. After all, consumer engagement will still largely depend on some traditional outlets.
And I agree with Bloomberg. The best is still to come, and the large shops will be in the middle of it all --together with the small ones.
lacreid All of this is about a mindset, behavior and definition of "work." Doesn't belong to any one kind of agency. However, most come at all problem solving with the muscle memory inherent in their legacy systems. It's always been hard for digital shops to get brand and hard for big brand agencies to get digital. It's possible for both, but calls for real determination and commitment.
edwardboches Absolutely agree. My original thoughts on this were actually on how agencies sometimes hold themselves hostage to that definition, actually compartmentalizing the world in a way consumers do not --and sometimes constitutes a barrier to being able to deliver on integrated briefs (which is what most clients would like, and what consumers end up seeing).
Regarding the panel for MDW, I believe Co has the right idea --but nothing stops the 'big old agencies' from adapting and adopting models... except themselves. IMHO, a lot of clients actually welcome such changes (I know I did).
Thanks for comparing these two perspectives.
Integrated Marketing Communications requires a blend of traditional and digital.
Some of the big ad agencies will adapt, embrace engagement, and thrive while some of the small, nimble digital shops will grow and continue to have broader impacts on the advertising industry.
edwardboches DR4WARD I saw a presentation from Forrester earlier this year with just that title "The Great Race to the Middle". ATL, digital agencies, media companies and specialists all fighting for the top spot.