The current agency model is broken. I know it, agencies know it, but luckily for all of us, clients haven't realized it yet.
After more than a decade of working for an agency (six years on the client side), I have come to several conclusions, none of which are pretty pictures for agencies unless they change. You see, agencies need clients more than clients need agencies, and there has been a fundamental shift in how technology has both enabled and altered that dynamic. It has exacerbated the problem with the explosion of new media channels, and it has also provided the solutions.
We have built an interweaving production process that is designed to produce media the old way, not the new way, and agencies and clients seem to be stuck in this model.
Agencies over the last 20 years have morphed into advanced communication production shops. The offline agencies have desperately been pursuing online projects with their clients, and the online agencies have been trying to do more offline work. What they both have not done, however, is change the process of production. They have been too busy chasing the money.
But agencies used to be so much more than that. They were the creative powerhouses. The ideation shops. The meme creators for their brands across society. Some still are, but is meme creation needed anymore?
The explosion of communication methods to reach the consumer has had a natural dilution effect. As the playing field got wider, it gave something to consumers they didn't have before: instantaneous access to desire fulfillment and an ability to access information about a product, not just from the company and the agency's perceived lens, but through other consumers and competitors. There have been three profound effects on the technological expansion of media: a wider communication platform for all, the persistence of data on that platform, and a plethora of spawned agency models.
So how is this all related to no longer needing an ad agency? SEM, SEO, interactive, offline, online, media, social media -- the breadth of these elements has made clients' heads spin, and the rapid pace has left many core agencies scrambling.
No longer does the client feel that one shop can handle all their needs, because in reality, no single shop can. But there is something being lost by all of the expansion: message and brand cohesion. Since your "main" agency is no longer the idea shop, and since that message has inherent problems cascading throughout so many communication channels, why have one?
I am about to commit sacrilege.
Reason 1: "The Big Idea"
What we no longer need is "The Big Idea," or at least not in the way most agencies still view it. Agencies used to exist because of that concept, but many lost their way. The communication cascade has been so profoundly altered that it is no longer The Big Idea but many smaller ones. The argument goes that everything should sit under the umbrella of The Big Idea, but I challenge that assumption. The Big Idea was necessary to help seed an overall brand image in consumers' minds and have it be harmonious and able to fit all of the little communication channels under it. That's really its essence. The problem is that when integration is attempted by most clients -- truly attempted -- it dilutes the message in the communication medium that is being used because the mindset of the consumer is often overlooked.
Traditional media (TV, radio, print, outdoor) had a much narrower human "need-state" of consumption, so messages could cascade among them while keeping the message coherent, simple, and emotionally impactful. The important thing is the bounce-back from consumers. It is their opinion of you. And their opinion dwarfs yours.
The last 10 years started to completely throw off the machinery of communication messaging. And with the explosion of social media, it became bilateral. No longer is it a tree diagram and a linear cascade downward to consumers. The internet, texting, mobile devices, etc., have all created a persistent communication feedback loop that is impossible to control. You can no longer effectively hide who you are as a company, because your Big Idea must essentially fall out of something bigger: your corporate mission, your reason for being in business.
Yes, yes, all corporations are in business to make money, but underlying that fact is how the company actually functions. The age of corporate transparency has arrived.
My argument is that The Big Idea, the overarching communication "message," should arise from the company itself because it is ultimately dictated back to you by your consumers. Unfortunately, too many companies are so mired in their own internal politics that they feel the need for the outside perspective of an agency. But agencies are often painfully unaware of the details of their clients' businesses. If you are an agency, try to be more influential internally, and don't limit yourself to engaging just with the marketing department. If you develop relationships at a higher level, the coordination between your proposed messaging and what will work for the company will be more harmonious.
Too many clients and agencies change direction so quickly that The Big Idea is never given time to cement itself, and they aren't listening to the bounce-back messaging. They still believe they can control and dictate. How often do company taglines change now? Is that the agencies' fault? No, but if The Big Idea is based on who you are as a brand, then it does not have to change with the wind. For The Big Idea to work, it must be BIG, but you don't need an agency for it. As a brand, you first need to look internally. Understand who you are as a company, and listen to the messaging coming back at you. Don't blame your agency; blame yourself for not listening.
Reason 2: Why build an Edsel?
Most external corporate web presences are over-designed monstrosities. I would argue that almost all businesses could easily survive with a more simplified, streamlined version that could be accomplished with most good blog software. Unless your business IS in business to sell products on the internet, and the website IS your brand, your website is overkill. This is where the consumer need-state comes into play. Your website is a conduit to the consumer's desire, but not the desire itself. Why are you paying an agency so much money to handle it?
Most corporate websites are painful reflections of their internal structure. They spend millions on revamping and solving problems, but in reality, they do not address the core issue. The agency model preys on this behavior. It is as if you built a shack that has had room after room bolted onto it -- kitchens, dining facilities, bathrooms, showers, etc. It may appear to be somewhat cohesive on the front end, but at what cost? This is not an agency problem but the client's unwillingness to make substantive decisions for their external web presence.
When you decide to redesign that shack, all of the extra detritus comes along for the ride. You may discard items here and there, but feature-creep somehow always results in another monstrosity being built, and you end up building an Edsel.
I recently advised a client who had switched from a traditional website to a standard blog template system using WordPress. The company designed the template adhering to its color palette and design philosophy, and for $100,000, the company ended up accomplishing what its agency had estimated would cost $500,000 to build. The end-product did more than what the agency was pitching, and it shaved an additional $200,000 a year off maintenance costs for the company. It also allowed internal staff to update the blog easily and communicate simply.
Another advantage of a switchover like this is that the search engines pick up all that new content much more easily than an overly designed Flash site. Remember, the majority of consumers now use search engines to navigate the web. So when you build a monstrosity of a site, the issue isn't just the cost of the build itself, it's the cost of maintenance, and the agency you need to employ because it wasn't designed for search engines to scan.
Design a system that is templated specifically for your needs, and the control goes back to your company. Isn't that where these decisions should rest anyway?
Reason 3: Scalability, production, and distributed messaging platforms
You used to be able to produce one TV ad and run in one market. If it resonated and helped move product, all you needed to do was scale the effort. The ad was already produced. You just had to spend more money. Same with print, outdoor, and many other traditional media. But with online, the playing field is so disparate that much of it is not as scalable.
You can produce a banner, but for some reason you always need to change it and produce more. Not to mention, you have to do it in four different sizes. Before too long, you have too many little snippets running in too many different places, and you find yourself myopically looking over analytics reports tweaking a tenth of 1 percent here and there. For what? The model is not scalable the way offline is. Sure, you can throw more media at it, but anyone in online media planning knows that with each new site, and each new format, you increase the complexity.
What most brands don't have is the willingness to run a single ad, test and control that one ad, and beat the hell out of it. Now that's efficient! The customization of messaging on the internet for each subgroup has created a cacophony of noise. So why not simplify? It's only a matter of will, and you can probably ditch the huge amount of production, media trafficking, and complexity you are creating for yourself in trying to find the one thing that works with your agency.
There will never be one banner ad that fundamentally changes your business and impacts the consumer in the way one TV ad could. It's the same with SEM. I watch company after company let their ad agency do their SEM ad copy. Are you serious? There is not going to be anything brilliant that an agency can do with 85 characters that you can't. Let an SEM vendor do it. Again, you're spending money on the wrong thing. If you're going to use an ad agency, use them for ideation, not wasting billable hours.
Facebook, Twitter, MySpace, WordPress, blogs, email systems, and a host of other tools are available for you to extend your brand, so use them. Why build internally what other companies have spent millions building, tweaking, and supporting? And why have your agency build them? Look at Facebook the same way you view outsourcing any other aspect of your business. Facebook hosts it and deals with the IT and serving costs. You should be making the decisions, listening to those channels, and managing them.
Reason 4: Stop focus groups
This is where I enrage every company in this business. Sorry. In the end, it's about what your consumers are saying about your product, although that conversation used to be isolated from both the client and the agency. Agencies used to have to conduct focus groups to gauge consumer opinion. There is no need for a focus group, ever. They are the harbingers of clients intending to cover their ass, and agencies that profit from it. Truth be told, many agencies hate focus groups, and please don't ever use them for validating creative.
Agencies use them so when the idea fails miserably, they can point to the focus group and know that they had senior-leader approval. Business now moves way too quickly for that. Make the decision and go with it. Why are you spending hundreds of thousands of dollars to get opinions from small groups of people who will tell you something that doesn't even affect their behavior? Trust me, they don't work. Instead, get Radian6, Biz360, Nielsen BuzzMetrics, or eCairn Conversation to help you learn what your consumers are actually saying. I advocate strongly for having this knowledge generate from inside your company and not from an agency. If it is inside, it will not be limited to the marketing group. This is the conversation that the CEO needs to hear, as welll as the product development people, etc. It should become core to your business because only by truly listening to your consumers will you make better products. And listening in on the conversation when they aren't aware is the only way to get at the real information. Do you really think consumers in focus groups don't know you're behind the mirror? Wake up.
Reason 5: You should hire the right people
It's time to make big decisions about your company's future. Companies have started to see the power new technologies can create for a brand, but do they have a CEO enlightened enough to take the necessary risks? Build up talent inside your company. Don't promote people internally from different divisions. I am often dismayed when I hear companies say, "He was a great performer in our internal marcom department for 12 years and would make a great choice for heading up our new global communications team." If you want game-changing talent, look externally. Sorry, but the people you tend to have left in your company are those who were either not talented enough to get recruited externally, or they are just great internal politicians with an M.B.A. from a good school. That is not to say you don't have great talent already in place, but it is more often that they are being shackled by someone in the upper management structure who won't take the necessary risks for your company to thrive in this new age. It's time to remove the shackles. The group must have C-level representation to succeed.
If you are not willing to do that, then by all means, keep all of your agencies just humming along. They will be very happy to keep taking your money.
I would appreciate hearing your feedback in the comments section below.
Sean X Cummings is principal of SXC Marketing.
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