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Why Agencies Should Be Terrified

Why Agencies Should Be Terrified Matt Heinz

Ad agencies are in big trouble and may very well become just a memory five to 10 years from now. That's a bold prediction, for sure, but the marketing world is offering far more support for that suggestion than proof against it.

The best, most brilliant, most effective marketing ideas of the past of couple years have not come from big ad agencies. They've come from small shops, and more often from individual consumers.

Madison Avenue didn't come up with the "Aqua Teen Hunger Force" stunt in Boston. It didn't invent Matt Harding, either.

New brands such as Zillow and Twitter are ignoring traditional ad channels, yet they are immensely popular with consumers. And at the same time, we're increasingly disappointed with work done by traditional agencies.

Big companies such as Nike, Miller Brewing Co., Procter & Gamble and others struggle with finding and keeping an agency of record that can drive their brands forward in today's media environment.

Part of the problem lies in what big ad agencies have traditionally done well, vs. what works in marketing today. Even 10 years ago, traditional media was king. Great creative, placed correctly in the right media channels, could build mindshare and drive consumers to action.

In this traditional marketing world, massive ad agencies were built based on high-margin creative departments and highly-profitable media buys on behalf of their clients.

Now fast forward to today. Traditional ads are either ignored or assumed to be puffery. Our shorter attention spans and faster lives give us less time to consume messages in traditional media, anyway.

What's more, the best, most credible marketing messages today come directly from consumers. We believe each other now, not the companies who want to sell us something. We assume that our neighbor down the street, or fellow parent on the soccer field sidelines, is going to be far more authentic and credible than the talking head on TV.

Consumers are the medium now, and few (if any) agencies have figured out how to harness the massive power consumers now have. Some agencies (mostly on the PR side) do employ brilliant thought leaders who clearly understand the role consumers now play in building brand influence and mindshare, but those same agencies have little expertise at the tactical and execution level for their clients. 

What should be even more concerning to big agencies is that great creative may never work again in traditional media channels. Consumers don't want to listen to messages directly from brands and agencies, they want to listen to each other. And what they tell each other isn't a marketing message. It isn't a flashy ad campaign. It isn't anything remotely resembling what we've traditionally built to influence consumers through traditional media channels.

What consumers are telling each other today are stories about their experiences with brands. They're sharing stories about how well a product works, or the great service they recently experienced from a service provider. On the flip side, they're also sharing horror stories about how some products prove to be defective, or sharing (sometimes with extremely compelling video proof) the crummy service many companies put behind their products.

Next: Consumers as the new king of media

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The emergence of consumers as the new "king of media" is placing the spotlight not on marketing messages, not on effective ad campaigns, but on the core of our brands -- the very products and services we provide.

The future of media and marketing has nothing to do with ads and promotions and interruptive media.  It has everything to do with how effective our products and services delight our customers.

This isn't a new phenomenon. Traditional marketing, done well, does nothing more than spread the work about great products and services. But if the products and services aren't great, the marketing will never work.

What's more, great products and services usually don't need marketing. Great products and services market themselves, in that they generate intense loyalty among current customers, and the kind of word-of-mouth that naturally generates steady waves of new customers.

Sure, an extra layer of traditionally-defined marketing can often be a catalyst to faster growth. It can mean the difference between 2X growth and 5X growth, simply by accelerating the speed at which people find out about your business.

But if the business isn't good -- if the products don't work, don't deliver on marketing promises, or simply are supported by bad service -- then all you've done with traditional marketing is tell a lot more people that you run a bad business or deliver a sub-par service.

In a world where customers now deliver their own marketing messages about your business back to the masses, your best marketing may not be marketing at all. It may be a renewed focus on providing the best products, supported by the best service, and creating the best customer experience.

And this is exactly why ad agencies should be terrified. This focus for brands doesn't lend itself to big media-buy commissions and expensive commercial shoots. It doesn't mean 30 seconds during the Super Bowl.
It means getting closer to your customers than ever before, listening to them daily, and building products and services that not only address their needs, but go the extra mile. It means creating products and services that are so good, they're remarkable and buzz-worthy.

This is how you ignite the marketing campaigns of today and tomorrow. It's how you get your customers talking about you and using the incredible tools available to them today to amplify their opinions back to the masses.

Brands need help doing this. Even the best products and most customer-centric service companies need outside help and fresh perspectives to keep their edge and see every possible angle that will make their products and services better.

But that help isn't coming from a big ad agency. It's likely coming from small shops and consultants that simply help brand managers listen more intently to their customers and improve both product and support strategies to better delight them.

This is an exciting time to be a marketer. But the rules have changed. 

Brands that focus on great products and services will find the path to growth and mindshare easier than ever to navigate. Brands that focus their marketing on identifying and empowering their most passionate users will discover greater media power than they've ever before realized.

And the agencies? They're clearly not dead yet, but their future depends largely on how well they can adapt to the way consumers make brand choices today, how they influence each other, and how their clients will choose to focus their resources and marketing moving forward.

Matt Heinz is senior director of marketing for HouseValues Inc. and the author of mattonmarketing.com. Read full bio.

Matt Heinz is senior director of marketing for Verdiem, a green technology company dedicated to reducing the carbon footprint of every IT device worldwide. Matt has more than 10 years of consumer and B2B marketing experience with technology, real...

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