Five things ad agencies have to get good at

Gareth Kay talks about innovation in this excerpt from a recent interview.

Ad agencies are really good at certain things. They’re masters of simplifying and focusing. They’re great at creating – or better yet revealing – a brand’s story. They know how to get attention.

But there’s a whole new set of skills and talents they ought to be developing as they encounter change in the form of new technologies (mobile), new engagement platforms (go ahead, pick one) and new agency models (think Victors and Spoils)

I recently had the chance to interview a number of my peers (a video is in the works) including Goodby’s Gareth Kay, Google’s Ben Malbon and Crispin’s Scott Prindle. We talked about our biggest challenges and how to address them. Five themes stood out.

Focus on innovation

It’s easy to stick with the tried and true, relying on traditional media metrics to make decisions about where we spend clients’ money and run ads. But playing it safe is the riskiest thing we can do. Agencies need to stay on top of changing consumer behaviors, master emerging technology and re-invent our own models in the process. Finding a way to make innovation part of the culture is key. You could set up a lab or skunk-works to experiment more as Ben suggests. Convince clients to dedicate five percent of their marketing budget to R&D as Gareth advises. Or attempt to invent your own new products and services as we’ve recently begun to do at Mullen.

Embrace speed

“The faster we are the better we become,” declares Ben Malbon. Obviously such a sentiment runs counter to most agencies linear process – research, strategy, creative development, polish and perfect, present, produce, measure – but the fact is we should all learn something from software developers and the startup culture.  Embracing agile, learning to prototype platforms and applications, and re-configuring teams and processes are changes we have to make if we’re to stay competitive. Look no further than John Winsor’s recent post on what CMOs would like to see from agencies.

Master engagement

Jeff Jarvis’s predictions that the middleman role would eventually disappear may not have come true, but the emergence of social platforms and the increased ease by which brands can engage directly with their consumers demand that ad agencies learn new skills and tactics– real time engagement, conversation strategy, crowdsourcing — if we expect to maintain our status. If we learned anything from the initial Old Spice Twitter campaign it’s this: creating experiences that earn attention will matter more than crafting messages that buy it.

Attract better talent

Last year I sat through presentations from the first graduating class at Boulder Digital Works, a program initially funded by an ad agency in order to develop more talent for our industry. When I asked the class how many of them wanted to go to work for an agency, even a digital agency, not one student raised a hand. They all want to work for a start-up company, or Google, or someone who makes things.  It could be anything – robots, software, or digital services. We face a classic Catch-22. We need new, young digital talent if we’re to change our own companies. Yet we can’t attract that talent until we begin to change. Time to think about how we entice them.  Do we mirror Google’s 20 percent time program? Or find some other way to show them that this is the industry to be in.

Liberate the next generation

EVB’s founder Daniel Stein likes to brag about how many of his company’s creations are the work of 23-year olds. Digital natives. Ben Malbon emphasizes that while agencies may think their employees are young, they’re not as young as those at Google. I recently watched two of Mullen’s 23-year olds make a presentation to the editorial staff of the Boston Globe on how the newspaper could do a better job of engaging Gen-Y. The duo did the research, shot and edited videos, created original content, recommended a business relationship and even crunched numbers to show how it would work. Now they’ve even closed the deal. As Rishadt Tobocawalla says, “we can’t teach this generation as much as it can teach us.” The sooner we give them the chance, the sooner we both benefit.

I have some pretty good video of Ben, Gareth and Scott (along with Matt Howell, Tim Malbon, Sheena Matheiken, Kim Laama, John Winsor and me) answering questions about innovation, new sources of inspiration, social media and talent. I’ll try to get it edited and posted soon. In the meantime, thanks for reading. And as always, feel free to leave your thoughts below.

17 comments
pscobie
pscobie

I can totally relate to this post. Spot on.

elrolio
elrolio

"Or find some other way to show them that this is the industry to be in"

It does have to deal with leadership being more like your peers across the board. Hard to ask for, but the new talent sniffs out the old bullshit. Until the way sales/account service thinks this way and agencies all compete on providing real value to clients versus just against each other, the younger talent will feel stifled just as they would in an environment that doesn't challenge them or allow them to flourish.

RoxyNoLucy
RoxyNoLucy

I think agencies should stop all the "self-loathing". There is no better creative environment on earth than an advertising agency. We've suffered long-enough from"McKinsey Envy". It's time we developed more swagger.

folguera.virgili.jordi
folguera.virgili.jordi

From my point of view the most interesting part of the Post is the last one, when edwardboches. talks about the liberation of the next generation. I truly believe that we can learn from the new generation at the same level than the experience voice. When companies realise that they will start to success in their target market.

eaonp
eaonp

good thoughts here, thanks.

I'd maybe add a thought, probably not a point 6 but a sub point of maybe 'speed' or 'innovation' but one of the other big challenges in ad agencies is the 'campaign' mindset. If we simple subsitute another word for campaign, say project for example, inasmuch as things don't stop. As well as apportioning budget to 'small bets' (i guess conceptually this is aligned with the McKinsey notion of spend 80% on tried and tested and 20% on structured experiments) blowing all the budget on the campaign means there's nothing left for the 'afters'.

*Actually, I've just scrolled down the comments and seen that camilla_cooke has covered this already.

Ho hum. Good work anyway.

JeffShattuck
JeffShattuck

Lotsa good stuff here. One thing I would add, though, is a process for continual improvement. In my agency jobs I saw very little effort toward making honest attempts to quantify/express why a campaign worked or failed, to write this stuff down in an easily accessible way and to build on it going forward. Agencies need the equivalent of the Toyota Production System, a hard thing to do, I admit.

johnnybennett
johnnybennett

I'd add UCD to this, which for my money is what distinguishes the best digital agencies and software developers from the ATL agencies. Ask any UXer what it's like working for a ATL agency and they'll tell you that what they do is, in the main, not valued. Service design, UCD, UX, etc, require a fundamentally different approach to the one that prevails in most ATL agencies. Crack UCD and then the ATL agencies will be something to contend with.

NewBusinessHawk
NewBusinessHawk

Edward I could not agree more... and it's something we've been consulting on for many years. I posted a few more thoughts for Agency Leaders in the presentation here: http://sandersconsulting.com/newbusinesshawk/the-future-of-ad-agencies

The New Marketing Chessboard

1. Understand the world will get harsher for agencies who don’t know how to adapt.

2. Learn from the tactical firms and how best to challenge them: Work with many points of contact within the organization. Work cheaper and faster.

3. Create an action plan to adapt now: Take the best thinking from tactical firms and best practices from strategic firms. Find your own trusted advisors. Understand how to manage change.

4. Build your business model so you can prosper in this new environment: Your agency needs to be positioned and branded properly – focus and discipline are key. Most of your competitors are operating without any strong positioning other than a hazy label.

5. The way forward is not clear, and it certainly doesn’t resemble the past. The future belongs to those agencies that try the most to see what sticks.

Always interesting to read your post! Keep up the good work...

Howie Goldfarb
Howie Goldfarb

This is a great set of guidelines Edward. I think every major brand should take 10-15% of their media spend and dedicate it to new tactics, platforms, technologies and strategies etc. And just go for it. The reason is the minute something works everyone jumps in and ruins it. So to take advantage of what Wall Street calls Arbitrage you have to blaze trails.

The one caveat is if 9 of 10 tries do not work will a client get gun shy about spending the money like that. What comes to mind is the rush into Facebook Brand pages which in my view have really turned up zeros everywhere, but fully enriched some agencies that specialize in that type of marketing.

I also wonder how often Agencies and Creatives come up with new ways to reach consumers in ways the consumer just doesn't want to be reached.

camilla_cooke
camilla_cooke

I think it's interesting that you're emphasising the importance of innovation, when the problem is brands have barely done any good digital marketing. Delivering social media objects, content strategies, participating with communities online through rapid response, developing digital influencer programmes and strategies is actually tried and tested social media marketing but very few brands are either doing it or doing it well. It's not about technology, its about the nature of content and how people consume it, what level of interaction they expect from brands, and about being 'always on' rather than campaign focused. Ad agencies are going to have to ditch their love affair with the disposable campaign, and think about ongoing communication - long term communities etc. It's great content and community management, with whatever technology is relevant at the time. Let's get away from 'isn't this a cool use of technology' - it just shows your age - for gen y, technology and its ever-changing possibilities is a given.

Madonna
Madonna

a millennial would have posted the link with the video :)

DaveAtNORTH
DaveAtNORTH

@edwardboches I thought I'd write a post as a rejoinder to yours. Sort of extending your thoughts a bit..

white rabbit
white rabbit

Sure, a lot of agencies are doing average work. You only have to flick through a newspaper or turn on the TV or radio to witness it. However, they are doing the work that clients are buying. That is the elephant in the room here. Most clients are risk-adverse so they tend towards stuff that has been done before, or stuff that won't upset the status quo. It's marketers that should be challenged to demand more from their agencies. Traditional agencies are always going to supply the stuff that is wanted by the people who are paying for it.

@dustinlane1

howardstein
howardstein

If one looks, for example, at television, the advertising is abysmal. No wonder young people are looking elsewhere. Who dreams of a future in an old industry that continually copies itself, sees a problem, and then assembles a bunch of old farts from the ad industry to recommend a route out of the fog? The blind leading the blind. Ad agencies are always looking in the wrong direction. Backwards. Startups have only one direction: Forward.

imaack
imaack

Agencies need to get out of the "Master Piece Mentality" and not spend weeks and months polishing the strategy and wording of a campaign while leaving no time for iterating and improving the project as it comes together.

edwardboches
edwardboches moderator

@Madonna A millennial would have known that there is a link. Just click on the word Vimeo. :)

RoxyNoLucy
RoxyNoLucy

@imaack Definitely agree. I've always called this "Black Box Syndrome" Creatives kicking everyone out of the process for two weeks until they come up with a concept. Problem is, the concept is almost always off strategy (which as you point out took far too long to develop to begin with). Why are 21st century ad agencies still operating like 1950's shops? I don't get it.

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