Before the "Mad Men" era, there was James Walter Thompson, the namesake of America's oldest advertising agency. An industry visionary, Thompson recognized a subtle shift in societal media consumption patterns and ultimately predicted that the production era would soon give way to the "selling era." Accordingly, the "father of the modern magazine" set out to create product advertisements targeted to specific magazine readers. As the first of its kind, his agency brought new expertise, exclusivity, and excellence, creating an air of intellect that rivaled a medical or legal practice. Consequently, clients listened to, and heeded, the word of the agency experts, who delivered undisputed wisdom. Did Thompson set the tone for all agency-client relationships that followed?
Let's take a look at where the marketing communications agency-client relationship is today, how it got here, how it differs from the glory days described above, and what we can learn from this fascinating evolution.
From reputation makers to the Marlboro Man
Our fascination with the "Mad Men" advertising era permeates our collective social consciousness, reflected in everything from entertainment to fashion. Yet, aside from the perceived glamour, the ad agencies of the early 1960s simply capitalized on the potential of the "marketing concept," which centered on determining what consumers wanted, their satisfaction level, and selling goods and services that would produce the biggest profits. At that point, ad agencies were highly regarded as reputation builders and brands paid handsomely for their services. Concurrently, agencies with new-found influence were building their own reputations and validating the ad industry as a legitimate career option for the post-World War II generation.
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The 1970s ad era was noteworthy for its Marlboro Man print and TV ads, courtesy of Leo Burnett, creating one of the most brilliant advertisement campaigns of all time. Who could forget McCann-Erickson's "Tastes Great, Less Filling" TV spots? Creative thinking enjoyed the resurgence of the "big idea" as a complement to the marketing concept approach, but as far as agency-client relationships were concerned, the 70s did little to advance the model. Agencies remained expert consultants tasked to deliver creative and media services.
By the time MTV captured the eyeballs of the 80s generation, the multi-agency conglomerates were beginning to coalesce. The holding companies, born during the throes of decade-long industry acquisition and consolidation, skewed their focus away from client relationships and big ideas, focusing on market resource-fueled growth instead. During this decade, agencies became well-oiled machines as the agency-client relationship evolved as a result of the account planning process migration across the Atlantic. That is, building on the success of Thompson's U.K. approach, Jay Chiat incorporated the integrated media and consumer analysis disciplines into a single department, altering the way agencies developed brand and campaign concepts. This key organizational development changed the way clients and agencies interacted, and altered the deliverables agencies routinely expected. More importantly, it forever changed the way agencies viewed consumers, messages, positioning, and creative concepts.
Digital tech and the new era of customer relationships
In the 1990s, the rise of new media and technologies, particularly inexpensive computing power, finally ushered in the promise of customer relationship management as a viable marketing discipline. The effect of digital computation techniques and theory directly impacted the marketing mix, enabling marketers, for the first time, to truly create unique permutations and combinations for multiple target segments simultaneously. Early in the decade, Peppers & Rogers coined the term "one-to-one marketing" and demonstrated that treating unique customers differently could positively impact the bottom line. Soon after, the rise of direct response (not a new theory, but rather a new discipline supported as "quant") coincided with the evolution of marketing-focused technologies and caught up with the theory of one-to-one messaging.
Since 2000, agencies and brands alike, sometimes reluctant to embrace social media, have learned quickly just how much is at stake by ignoring digital innovation. Newer channels, such as web, social, and mobile, in combination with traditional mediums, provide colossal opportunities for mass customization and reach at unimaginably low costs. At the same time, these changes have presented unrelenting pressure to adapt and innovate, causing a crack in many long-time agency-client relationships and threatening the industry hierarchy. Now, companies large and small have begun to demand more from their agency partners. In addition, social, mobile, and digital startups rival the largest agencies for innovation, expertly marrying technology and marketing. No agency, regardless of pedigree or size, has the luxury of resting on its laurels.
Today, the global economic climate and the stress on every marketing dollar to instantly perform are changing expectations and timelines for strategy, execution, and results delivery. Budget-conscious clients care less about long-term qualitative brand attributes, though brand cultivation remains critically important, and more about campaign or initiative-based ROI that is realized in the current quarter. A distinct change, from frequency and reach measurements to quantifiable actions (i.e. engagement, conversions, interaction), has occurred within the digital marketing space.
As a result, agencies have learned the unmistakable truth that getting involved further up the value chain and solving business rather than marketing problems, is the best way to provide value to their clients. Agencies no longer exist in a vacuum; instead, they realize their integrated approaches must complement their clients' sales, products, operations, and finance efforts. Those that embrace this reality succeed; those who fight for the lore of yesterday are doomed to failure in the new world order.
What will define the successful agency of the future?
First, agencies will be wise to avoid clients that view them as nothing more than a vendor, conducting the mechanical work of advertising and providing good creative, while the clients' employees consider themselves the holders of strategic insights.
Furthermore, successful agencies that compete in the new age of digital marketing will embrace the following tenets:
- Escape industry jargon -- Meet your clients on their terms and in their language. Remember that ROI transcends and trumps industry-speak.
- Encourage education -- Tools and techniques that simplify client education are at our disposal. Today, the best agency-client relationships have evolved into that of educator/collaborator.
- Employ various techniques -- Behavioral targeting, psychographic profiles, premium rich media formats, search engine marketing, QR codes, and media optimization work best when the client can assess results with confidence and comprehend the impact of each.
- Exploit multiple devices -- In just a few short years, portable devices such as smartphones and tablets have exploded onto the scene, providing massive opportunity to reach consumers wherever they are. Imagine what the next 15 years will bring to bear?
The next agency model
As the agency-client relationship dynamic continues to evolve, agencies will be compensated for results, or the value we create, rather than how many hours we work or how many campaigns we launch. This is a philosophy we call Digital Performance Marketing, and one that several new order agencies have begun to adopt in various forms. Agencies today may not speak with the same jargon as the Mad Men of the '60s, but that's a good thing. The value the collaborative, multi-channel approach can provide clients far outweighs the sheen of clever, one-dimensional creative delivered in predictable formats and channels. As reputable marketing practitioners, we have an obligation to demonstrate how each channel and tactic may be used to advance our clients' businesses.
I've witnessed this phenomenon from within billion-dollar, publicly traded agencies, from within start-ups, and from most points in between. Three key principles that remain constant in each are:
- Deliver value and demonstrate new thinking (don't be just an order taker)
- Deliver meaningful business results, not just CPMs, CTRs, views, or other industry buzzwords
- Deliver chemistry. Work with brands that appreciate what you have to offer
The essential takeaway is clear. Devices, and even channels, will evolve over time, and agency organizations and disciplines may change to reflect that evolution. Yet, the fundamentals of solid client-agency relationships -- and what clients expect from their agencies -- will only slightly change. Today, the best agencies appreciate their clients' knowledge about their business and nurture brands by creating and harnessing the messages and channels that impact their clients' business growth, which will continue.
As we move into the future, agencies must showcase themselves as educators, able to embrace new tactics, techniques, and channels, demonstrating more than a fascination with new toys. In short, the successful agency of the future will deliver results for its clients, showcasing transparency and innovation along the way.
John Mustin is co-founder and president of Wasabi Rabbit.
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