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December 28, 2005
Agencies at the Tower of Babel
 
 

Genesis 11

1 At one time the whole world spoke a single language and used the same words. 4 "Come," they said, "Let's build a great city with a tower that reaches to the skies--a monument to our greatness!"

5 But the Lord came down to see the city and the tower the people were building. 6 "Look!" He said. "If they can accomplish this when they have just begun to take advantage of their common language and political unity, just think of what they will do later. Nothing will be impossible for them!"

7 "Come, let's go down and give them different languages. Then they won't be able to understand each other."

Brand Custodians

Not so long ago, it was popular for advertising agencies to be viewed as the primary custodians of the client's brand perception among consumers. They were the branding gatekeepers between the marketer and its customers. A crucial position of major importance.

In that role it was thought that there was almost nothing in branding that it was impossible for them to do. And, the principal way to build and maintain that consumer brand perception was through the single language of advertising.

Branding (as defined by agencies) was the tower. Building it was a heady job. Agencies were on a wonderful mission.

Some might say that like the men of old, they were building a monument to their greatness.

Advertising – The Common Language

There was no doubt about it. Advertising was the key to building and maintaining brand perceptions with consumers. Media advertising, particularly TV, was the primary tool for communicating brand values with them.

And agencies knew more about the effective use of advertising than anyone else. They not only created the language. They were the keepers of it.

It was a golden age. Not just for agencies. But for advertisers, too. Brand building thrived in this environment.

The 30 Second Spot

The economic powerhouse was TV. Specifically, the 30 second spot. It was at the core of the common language. Consumers doted on TV. Not only did they spend a significant portion of their time watching it, but, they reacted positively to its commercial influence.

While other ways of influencing consumers like PR, radio, magazines, direct mail, newspapers, direct marketing, outdoor, promotions, product design, the retail experience, literature, word of mouth, and others were important, TV was the king. And, everybody knew it.

And along the way, the basic economics of advertising agencies and producing ads and TV spots became intertwined. More on this later.

Agency Pride

It seemed as if nothing was impossible for agencies. As their influence over branding grew, so did their aspirations. They formed holding companies and expanded globally. They assisted all major marketers, and touched the lives of most of the brand consumers on earth.

Great economic empires were built. The equity value of brands soared. So did the value of agencies. Times were good.

The Fickle Consumer

For a number of decades, the language of advertising dominated. It was the preferred way of communicating brand values to consumers.

Then, things began to change. At first, the shift was almost imperceptible. And then, ever so slowly, the dominance of TV began to erode. Concepts like one-to-one marketing and customer relationship management emerged. New technologies arrived.

Cable began to whittle away at the network audiences. Other media became more targeted and more sophisticated. And then the Internet burst onto the scene. PR was viewed in an expanded way. So were events and sales promotion. The line between content and commercialism blurred with increased product placements. Creating "buzz" became the mantra.

And on the consumer side, life styles changed. Consumers became more savvy and sophisticated. Their understanding of brand values expanded. It wasn't just about what they learned from advertising any more. Their window of reception expanded. Now their view of brands was formed by a more delicate balance of perceptions about the product, the price, the place and the promotion.

New Languages

These intruding tools and disciplines brought with them strange new languages. While they all contributed to branding, each was different from the common language of advertising. In each of those specialties, the practitioners knew their craft's language. They had no trouble communicating with their craft colleagues. But each craft language became alien to every other craft.

Lots of PR people had difficulty communicating with web guys. Many product designers didn't understand sales promotion. Event folks usually didn't get what product placement was all about. Video game creators were in their own little world. CRM and mass marketing were at linguistic odds. And, in the middle of it were agencies talking about advertising. Each was espousing its own solution in its own language. Each introduced new complexities. Each introduced new challenges. What a mess!

Babel had descended upon the once rational world of brand building.

At First Blush

Initially, the inclusion of these new tools and disciplines and the accompanying shift in consumer attention, involvement and behavior didn’t look like it would be particularly troubling for agencies. Agencies had great strength in their insights to consumer behavior. Understanding the consumer had always been their strong suit.

Shifting the tools necessary to reach the consumer surely couldn't be that difficult. But, with every new tool came a complete and separate language. A language different from the language of advertising. Who could translate? Who could combine the various tools in the most effective way? Who could make sense of it all?

And yet, marketers needed to use a balanced array of these tools to achieve their branding goals.

The Holding Companies

Recognizing this need, the agency holding companies set about acquiring firms representing the various craft skills. They bought PR firms, product placement specialists, promotion organizations, direct marketing houses, web shops, etc. The plan was simple. They could aggregate all the tools a marketer could need under the holding company's banner. One-stop client shopping if you will.

Unfortunately, integration of these tools was not as smooth as hoped. While to the outside world, the communications capabilities arrayed in these sibling organizations looked great, internal communications using all the different languages was a real problem.

On top of this, the typical holding company profit center business model compounded the difficulty.

In effect, the leaders of the various craft units within the holding companies were placed in competition with each other. While they may have worked for the same parent corporation, each unit was charged with financial results that were compared with each of the other family units. Thus, while very subtle, the personal competition was huge and very real.

It is hard to collaborate effectively with someone you are in competition with.

Thus the harmonious application of multiple tools to solve complex client problems proved very difficult to achieve. Thus frustrating the promised benefits for the marketer.

Agency Reaction

To the surprise of many, a peculiar thing began happening to the people within agencies. Rather than aggressively learning the new languages of the new tools, many of them appeared to be withdrawing into their own parochialism.

Making and placing advertising seemed to become more important to agencies rather than less important. Clearly a move opposite to the direction the consumer was going.

Were agencies becoming less of a gatekeeper for the consumer's brand perceptions and more of just providers of ads and TV spots? If so, what could clients really expect of them?

Unintended Consequences?

The obvious question is why does it appear that so many agencies are behaving this way? Is it possible that the business model that was so successful for agencies in the past decade is the cause? Is a compensation system based on the time it takes to create, produce and place ads and spots preventing them from architecting a harmonious mix of the various new tools available to them?

In a period of unparalleled opportunity, could it be that many agencies are abandoning their role as brand custodians and are marginalizing themselves?

Pity the Poor Marketer

Logic dictates that the consumer is best served (as is the marketer, too) by a harmonious combination of all these various branding tools. But, how to determine what that optimum combination is? And, how to assure that the messages carried by each tool are harmonious? Who is to make sense of this new, multi-lingual world?

If the marketer's advertising agency has become biased toward just making and placing advertising, can it continue to be the principal custodian of the consumer’s perceptions of the brand?

This is a really tough question. Because if it isn’t the agency, who is it? There is certainly no established category of service provider. Brand consultants touch on part of the answer. So do the emerging marketing architects. But, they are not yet the mainstream.

Without a clear and established path, many clients have taken on this responsibility themselves. Albeit without the experience that working with multiple clients brings to outside providers.

Do it yourself is not an easy way to go. Or a necessarily happy one.

Back to Basics

If agencies are sliding away from their leadership role with clients, perhaps it is time to take a step back and review some time-tested agency basics.

Historically, agencies have had some fundamental strengths:

  1. Agencies understand the consumer’s economic and psychic interests better than anyone else on the playing field.
     
  2. Agencies also have a keen understanding of branding and what the brand experience means for the consumer and how that relates to the marketer.
     
  3. Agencies have (or have had) strong, enduring relationships with marketers.
     
  4. Agencies are good aggregators of diverse crafts and tools – if they understand the language of those disciplines.
     
  5. Agencies have the most diverse talent base among all the branding players.

These are very powerful, and rather exclusive, strengths. They go to the core of how to most effectively build and maintain a brand from the consumer's point of view. While creating and placing advertising is an important component of many solutions, it is exactly that – just a component.

Agencies have the opportunity of moving back to the position they traditionally enjoyed; that of being the architects of the client’s consumer brand perception.

How?

Here are some thoughts you might consider:

Do You Want to Be the Brand Architect?
This is a pivotal question. For it ultimately will separate those who want to guide the client’s overall brand perception from those who specialize in creating and producing advertising. A big, big difference.

A bunch of diverse trade contractors working individually and directly for the owner are unlikely to produce a holistic and harmonious building that functions well. Or much less, does anything to lift the human spirit of the occupants. To accomplish that, it takes a skilled architect.

Building a unified brand experience in the mind of the consumer takes the same holistic guidance. And, that won't come from a bunch of media and marketing tool vendors. It is a role that agencies are best suited to fill. But, only if they really want to.

Consumer Focus
Advertising agencies understand the mind of the consumer better than any other player on the field. This strength should get maximum leverage.

This calls for rethinking how the agency's planning capabilities are deployed. Too often, planners are kind of an ivory tower afterthought. When in this new paradigm, they should be at the forefront of the entire agency's effort. Serious rethinking of using this powerful asset is in order. For if the agency has a clear map of the consumer's psyche and his/her various mental receptors, then the rest becomes much easier.

Learn the Languages
This is the toughest part. Before you can guide the harmonious aggregation of various tools and crafts, you must understand each of their languages. Without that Babel prevails.

Now this is easier said than done. It will take time and money to learn these new languages. It will take new people from these various disciplines. It will take true mind-expansion of traditional agency craft experts. And most of all, it will take dedicated and committed leadership.

Holistic Ideas
Great ideas that only work in 30 second spots or colorful ads are not enough. The ideas that will drive the success of agencies in the future must be able to work using all kinds of tools, and in all kinds of venues. They must be truly media agnostic. Anything less is insufficient.

This means nurturing the understandings within agency talent that permit idea development that transcends traditional advertising, and speaks broadly to the consumer through all of their available receptors.

Coalesce the Outcome
With the variety of ways available to touch today's consumer, no one – not even the biggest holding companies – have the skills to do all the things necessary. Other providers with specialized expertise are needed. Collegial, collaborative leadership of the solution team is required.

Someone has to orchestrate bringing all of this together. And, it is not something many marketers have strong skills in.

Examine Your Business Model
Today, most agencies make their serious money from TV spots and colorful ads. Becoming a brand architect and guiding the collaborative process of diverse outside talent is out on the periphery of most agencies current business model. And, if they do act as brand architects, it usually represents a small portion of their total revenue.

But, today's agency business model is clearly in trouble. TV spots and colorful ads and other stuff as the economic backbone of the agency business will just not work much longer. The golden goose is dying.

Architecting a multi-dimensional branding solution has great value to the marketer. Yet there is no standard way of directly rewarding an agency for this value.

Thus, new business models must be created. The need is there. The opportunity is there. The agencies that can develop effective new economic models for their business, and then successfully transition to them, can move to a whole new level of psychic and financial reward.

The Choice

Babel abounds. Agencies are at a fork in the road. They can retreat into the language of advertising and make a nice living as creators and producers of TV spots and ads. And, be one of the many voices in the cacophony.

Or, they can rise above the din and architect the branding solutions of tomorrow.

Which fork will you take?


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President and founder of Carlton Associates, Mike Carlton has spent most of his life in and around advertising agencies. Mike has held offices in the AAAA, and is a frequent writer and speaker on agency issues. Mike provides consultation on agency business models and serves on the corporate or advisory boards of a number of notable firms.
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