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5 reasons you no longer need an ad agency

Sean X Cummings
5 reasons you no longer need an ad agency Sean X Cummings
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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.


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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.


On Twitter? Follow iMedia at @iMediaTweet.

Comments

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Commenter: Chandler Nguyen

2011, July 19

It's an interesting article and no doubt with a provoking title. I am in search of a good Digital agency model for Vietnam market and i tumbled upon your articles. A lot of good points here and from reading Sean's profile, his main motivation is to urge agency world to change, to evolve i believe. Thanks Sean for the insightful articles. I am going to read other articles by yours now. Chandler Nguyen

Commenter: David Shantz

2009, October 10

Totally agree. We see the opportunity as helping great companies and brands use interactive media to build stronger relationships with their customers, based on integrated relationship marketing tools, processes and organizing principals…

Perhaps we could start a conversation about joining forces along these lines? -drop me a note back if you agree…

Commenter: Domenico Tassone

2009, September 05

Look for savvy clients to take more "analytics" in-house and away from agencies. Marketers want a unified credible view of how their digital marketing programs AND agencies are performing.


Domenico Tassone
Seiche Analytics
www.TipoftheSpearBlog.com

Commenter: Jeff Molander

2009, August 26

"... marketing as it has existed so far that's becoming obsolete.....and agencies are just one piece of the puzzle."

The longer we keep pretending this is true the longer we keep failing at, as you suggest Laruent, "social media". I argue there is no such thing as "social media" (http://budurl.com/9zbr) in a hyper-connected realm. Believing that there is such a think promotes continued ignorance of reality: "ALL the Web is a social media."

Also, to argue that it's a platform, IMHO, fails to move the needle too... because it still supports CMO's believing in *specialists* when they really need marketing *generalists*. Only generalists can connect tactics to strategies. This is why we have Twitter success stories being measured PURELY based on quantitative (not qualitative) measures. Lots of followers=success. Never mind the fact that all the data/research proves that most followers are completely un-engaged... passive... drive-by.

But more importantly -- do you know any social media experts with backgrounds in traditional marketing? I can count them on one hand and a few of them are, unfortunately, "conversationalists" (ie. promoters of mass communications being ported onto the Web -- via worthless, aimless "conversations" that closely resemble "brand advertising" and fail to create customer BEHAVIOR).

As Businessweek recently reported here http://budurl.com/5nu3 CMOs clearly, STILL, see "social media" and "digital marketing" as specialty areas. Ok, I'll buy that but they are BOTH areas that need a dose of one thing and one thing only: DIRECT RESPONSE practices.

The Internet is a direct response medium. Need proof? Look where the money is: Google or take a look at what middle-men like shopping comparison engines, affiliates (of all flavors) and others have done to arbitrage customer demand using BEHAVIOR as the central tenant. Direct response.

Also, Sean asked me to share this link. More proof that "good, creative ideas" are a dime a dozen.

http://budurl.com/x5jq

Commenter: john wright

2009, August 21

This guy's a bonehead. Do we need an agency selling us magic beans? Of course not. Do we need technological services, marketing strategy, branding, SEO, and PPC... OF COURSE! Any agency that doesn't offer those services aught to. Is that the point of this article?

Commenter: laurent pfertzel

2009, August 20

Sean,
Words are sounds to represent concepts ;-)...Broken, Evolution, Revolution and so on. Different words, same idea. Something is changing in the world of marketing.
For sure the agency model as it has existed so far is becoming obsolete (may be more the process side of it along with the culture than the poeple if they know how to adapt and some will). Well I venture to say that marketing as it has existed so far that's becoming obsolete.....and agencies are just one piece of the puzzle. So things will change and right now is just the beginning. As always with changes, we know what's broken before we know what the new deal will be.
The big mistake I see is to take social media as a ..another media...; Probably the name is the #1 reason why it's that way because then it's put in the same bucket as TV, Print, Radio.
It's much more than media, it's a platform. Making the confusion is a big mistake that prevents from seeing the true revolution that's happening through social 'media' between brands and their ecosystems. Whether agencies will be part of the puzzle or not is a matter of opinion. The jury is out and time will tell.

Commenter: Al Cadena

2009, August 20

Really interesting article. This is a time of great opportunity for individuals and organizations to really get up to speed with social media and empower themselves in taking hold of their brands.

Commenter: Don Low

2009, August 20

PS. How can you spend a decade working for an agency (6 of which were on the client side)?

Commenter: Don Low

2009, August 20

So, I skimmed your article once and then re-read it again let me make sure I have this down: I need to fire my agency because:
1. It's too big and bloated.
2. The people are mediocre and can't do it all.
3. Big ideas from agencies (but not from a client) are irrelevant to today's marketer.
4. Replace my website with a blog template.
5. Create a single banner ad and beat the hell out of it.
6. Manage the SEM vendor myself and optimize in my spare time.
7. Blow off any kind of focus group especially those that solicit feedback on campaign ideas. The only customer insight that matters should come from web analytics.
8. Take the money I'm spending on my agency and build up an internal agency, made up of outside people because my current employees are not qualified. And make sure my internal agency is managed by a c-level executive so they are not shackled in the organization.

OK, I'm sold. I've fired my agency. They sucked. Now, I need to set all of this up. I need some help. I need to hire these people, get them offices, find a way to determine who has expertise, develop processes and work flow, find a way to keep/motivate/inspire them. Maybe I should hire your firm as my consultant. That is what you do isn't it? Wait, I went to your blog/website and I can't actually figure out what you do.

Commenter: David Berkowitz

2009, August 20

There are a lot of good points here, but I don't think they support the premise of firing your agency outright. If all your agency does is come up with some big ideas or assemble focus groups, they're probably overpaid.

In general though, agencies are much more efficient for marketers. Consider all the staff they'd need to hire in-house to master all the various advertising disciplines. And then consider seasonality factors - many retailers will need far more staff in October than April.

Let's go back to the focus group example. Sure, they can get Radian 6. But they need staff to put together the reports and make sense of them. And that person will need to have something to do with the rest of their time, or it will be another demand on an existing (and likely overworked) hire. Let the agencies tax their own existing and overworked hires to do this for multiple brands at once.

Really, if all of us at agencies have our clients read this and all our clients fire us, then two things will happen. First, it will be clear that agencies weren't providing that much value in the first place, and I don't think that's true as a general rule. Second though, there will be a huge hiring boom in the marketing world as marketers will lose the economies of scale that agencies provide, so with everyone going in-house, far more jobs will need to be created. And thus all of us who have been doing this for awhile will be in such high demand that we'll be living pretty damn well for awhile.

In that case, maybe I should send this around.

Commenter: Michael Kennerley

2009, August 20

As a retired adman with 30 plus years in Media at both agency and client side, I found your point of view very interesting and enlightening. I have been away from the business for long enough to have some perspective and while I have some difficulty embracing totally what you say I have to admit agreeing with the core of your argument. I always considered an agency's primary role was to translate the consumer for the client and then to POSITION the product orr service to those consumers. I would still like to think a good agency delivers CONSISTENCT, and I believe that's worth something still. An excellent article. I will now follow you on Twitter. Thank you, I learned something today.

Commenter: Greg DiNoto

2009, August 20

Sean -- have to take issue with the idea that agencies are propping themselves up with unnecessary creative expenditures -- as an agency principal myself, I can tell you that we take great pains to allocate client resources with the utmost care. And sometimes the best expression of a brand requires more than off-the-shelf platforms. The agency model isn't broken -- it's evolving. There will always be a need for objective, best-in class thinking that advertisers are challenged to attract and deploy properly themselves. And big ideas absolutely should come from the client. From what they do, and who they are. A good agency can help them encode and express that -- sometimes outsourcing core competency is absolutely the best business decision.

Commenter: Brian Reich

2009, August 20

Terrific post. I've been saying for a long time that we don't need ad agencies anymore (including this little rant a while back - http://adage.com/video/article?article_id=130827). Your points are excellent. Thank you.

Commenter: Marc Osofsky

2009, August 20

Great post! We here similar frustrations from companies regarding agencies.

I wonder if you are also hearing the following:
A desire to do more content sponsorships where target audiences are already gathering and not just ads?

A desire to take more of a web content management approach as apposed to everything being a 1-off piece of Flash?