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March 15, 2012
Only Ad Agencies Can Put Themselves Out of Business
The industry has a future — but we have to keep up.

Recently, a video got passed around for a company called Dollar Shave Club, which sells razor blades on a monthly program basis. It’s a 90-second video, and it’s pretty funny. The video just shows a dude walking around the warehouse, talking straight into the camera about how great his blades are while goofiness ensues around him.
Anyone who’s ever met me knows I can grow a full beard in about 10 minutes, so this video certainly spoke to me. But that’s not the only reason it caught my attention. In this case, the dude in the video is Michael Dubin, the CEO of Dollar Shave Club. He co-wrote, produced, and starred in the video without much outside help. Yet it beats the pants off many commercials ad agencies and their clients spend millions to make.
Dollar Shave Club proves a point many people, both inside and outside the advertising business, have been saying. Brands these days certainly don’t need an advertising agency of record. Brands don’t need an official anything. Marketers with a great idea don’t need to market themselves the way it’s traditionally been done.
Or do they? Can every brand act like Dollar Shave Club and take it upon itself to handle the marketing? What do agencies need to do to stay vital?
I recently heard one 30-year ad veteran proclaim that by 2016, “Ad agencies as we know them will be gone.” And while such pompous prognostications are always overblown, every advertising and marketing firm — and every employee in them — needs to be aware of how, and when, they’ll be needed now and in the future.
The rise of digital, social, and mobile marketing, on top of all the other traditional media, means more work needs to be done. More microtargeting of the audience. More tactics to pursue. More, uh, “deliverables” to produce. All of which requires more labor.
That requires a lot of heavy lifting, and most client-side marketers aren’t staffed or equipped to do it themselves. The emails? The direct mail? The in-store marketing? All the ways you entice people to discover a new app or service? That work needs to be done by some type of advertising or marketing agency. Frankly, it’s still just as much about interrupting our customers’ days as it as about engaging them. Much of it isn’t glamorous, but an agency that can do that stuff well won’t need to worry about going out of business.
There’s also another reason you won’t see ad agencies go out of business: marketers are the enablers of endless reams of circular thinking and mundane drollery.
A friend recently told me about a client that had an annual budget of approximately $500,000. Not a ton, but not insubstantial either. But their ad agency blew half the budget just on all the hours spent on planning and research for the brand. And after six months, all they had to show for it was a few internal presentations and a brochure. There’s a place for well thought-out brand thinking, but if an agency’s output mostly consists of PowerPoint decks, that’s a lot of waste happening in the name of looking professional.
Unfortunately, corporate life is still rife with an endless parade of meetings, decks, planning sessions, CYA emails, and a river of paperwork just to get the smallest initiatives done. So as long as that occurs, advertising agencies will be encouraged to gobble up the marketing budgets, and might even produce a few ads in the process.
We also live in a world where, for many marketers, volume buys credibility. As long as Walmart remains the largest retailer in the world, they’ll persuade brands to commit money to retail merchandising and marketing efforts just so their products get a place on Walmart’s shelves. And that’s more work for an ad agency willing to take it on.
But nothing is guaranteed in this world. Any death of advertising agencies will be the product of self-destruction, not “creative destruction.” It’ll happen when we sop up marketing budgets and produce little that resonates. It’ll happen when we stop listening to clients, and stop pushing them to do better. It’ll happen when marketers look for a cheaper option because paying for the supposed experience or expertise of an agency isn’t worth it.
As for that last point, I’ve seen it myself. Recently, I received a several calls from small business owners who talked to agencies and marketing firms about their business, but didn’t like the reception they got. They heard a load of BS and got so frustrated they found me on Google and cold-called in search of an alternative. I imagine the CEO of Dollar Shave Club might have had that frustration as well — if he hadn’t studied improv comedy in addition to starting a razor blade business.
But for every Dollar Shave Club, there are 100 marketers looking to advertising agencies for help. Brands that have big, complicated marketing problems and budgets to throw at them. That’s not a death sentence. For the ad industry, it’s a huge lifeline.
That is, as long as we don’t produce work that’s lifeless.
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Since 2002, Dan Goldgeier has been writing the most provocative advertising columns about advertising and marketing -- over 170 of them, covering every related topic you can think of. Now based in Seattle, Dan is a copywriter and ad school graduate who's worked at shops big and small. 

Visit his copywriting websitesee his LinkedIn profile or follow him on Twitter.

And please, buy his book for 99 cents.


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