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The Future Of Advertising Agencies

Mad Men

I did some freelance copywriting and sold some newspaper advertising when I was coming up, but never ended at an agency, though that’s where I wanted to be. It was the idea of executing creative ideas–a clever television ad or a striking print piece–that held the allure for me. I’ve spent a lot of time during the intervening years studying advertising from both a marketing and a consumer point of view.

Back then, judging which ads would work and which would not was far more art than science. Measurement essentially boiled down to size of audience–or impressions–and sales and the vague relation between the two. Fast forward to today and we’ve got all kinds of metrics to judge the effectiveness of marketing messages with more measurement tools added all the time.

As a result, we’ve also got a much better idea of how consumers behave and how they interact with brands. We even have a new field, neuroscience, that is devoted to studying the physiology of the brain in order to understand the reasons people make the choices they do.

What the Internet and all these analytics tools have laid bare is the massive inefficiency of traditional advertising. During an age of economic turmoil, inefficiency is a problem. But when people ignore you, that’s a bigger problem. And that’s what our on-demand world allows everyone to do: Ignore advertising.

You need not believe me. Check out the video I posted earlier this week featuring Millennials talking about how they interact with (or don’t) with advertising:

Traditional advertising is broken because it only succeeds when it forces you to pay attention to it. The last refuge of that dynamic is breaking news and live televised events like the Super Bowl.

The challenges advertising agencies are facing, in addition to the realization that their traditional methods are massively inefficient, include:

  • Traditional advertising venues (chiefly print, television, and radio) are scattershot and expensive while new media marketing methods are relatively inexpensive and highly targeted.
  • Revenue from media buying services are decreasing as advertising moves online and becomes self-serve.
  • Video production is becoming a commodity business.
  • Competition comes no longer merely from other ad agencies but also from specialized digital shops and even amateur citizen marketers crowd-sourced directly from clients.
  • A talent base that is poorly suited to the new landscape.

Agency Hubris

This last point bears some exploration. Some time ago I sat in on a brainstorm session with an advertising agency whose client conceded that their product was essentially no different than their competitors’s product.

Rather than figuring out ways to more efficiently find and engage and build a relationship with the target customers, much of the session was devoted to coming up with ways to bullshit the customer: Let’s bring in some scientists to talk about differentiating factors…even though the client had already conceded there were no differentiating factors! Spin is dead. Bullshit no longer works. People are too sophisticated for that. The Internet, the social Web have taught them.

Some clever and very creative ideas were tossed around that ultimately had little to do with the product itself.

I got the feeling that the agency was more enamored with their own creativity than with the client’s problem. They clearly loved the creative process, the storytelling, but they were not as focused on the why they should tell this story or whether that approach might actually work.

(My point is not to indict ad agencies across the board, but simply to point out that this attitude of trying to pull one over on the customer persists and that it is corrosive to their own industry.)

I’ve seen countless ads in my day that were creative masterpieces, that were absolutely compelling content, but had little to do with the product on behalf of which the ad was produced. The ads had no influence on me.

That’s not to say that those types of ads will never work. I’m thinking of the online video of a gorilla playing Phil Collins’ In The Air Tonight for Cadbury milk chocolate:

I love that video! It’s hilarious. It has got a ton of views online. And it has nothing to do with Cadbury milk chocolate yet when I think of it, I always chuckle and I always associate it with Cadbury. But I can’t remember the last time I bought a Cadbury product.

I think agencies for the most part are trying to make the old methods work in world that has fundamentally changed rather than adapting to the new landscape.

Agency Reinvention: Commercial Content Creators

So what’s the solution?

First, concede that traditional advertising is becoming less effective by the day. Second, take a good look at what ad agencies do well:

  • Creativity. They are full of extremely creative people. Creativity matters more than ever.
  • Storytelling. Their creativity is employed in the service of telling stories. They may be the best storytellers among all the communications professions. Storytelling matters more than ever.
  • Compelling. At their best, ad agencies excel at grabbing our attention by creating compelling content.

I think if ad agencies harness those three core advantages and employ them with a keen understanding of the new realities, they can thrive.

Rather than selling advertising services, ad agencies should rebrand themselves as commercial content creators, as people who can create content that is itself serving a commercial purpose rather than being a vehicle through which to deliver commercial messages. Companies are realizing that they can leverage their own in-house talent by creating content out of that expertise and that content can give them a competitive advantage.  But most don’t know how to create compelling content.

Commercial content creators can help them turn their stories into compelling content that people will actually want to consume.  That content should not be merely compelling but compelling with a purpose.

Blendtec figured it out all on their own with their online sensation, Will It Blend? series:

And BMW pioneered the concept with their BMW Films series:

I think ad agencies are in the best position to figure this out and some probably are already. Somebody will, anyway.

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About David Erickson

David Erickson is principal of e-Strategy Media, a digital marketing consultancy based in Minnesota. David has extensive experience in digital marketing and is often used as an expert source by media and asked to speak on the topic before organizations and to sit on panel discussions.

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