Commentary

Attack The Opportunity In Advertising

Every day, advertising agencies tell their clients to stand for something, to own their positioning, to appeal to a defined narrow target audience, and yet, as an industry, we fail to listen to our own advice. Our Web sites, our case studies, our press releases all strive to be everything to everyone, a landscape that has become a mélange of agencies, a soup of the bland, scared to present a point of view, we are our own worst clients.

For the last five years, our clients have faced the most turbulence in economic history, with massive cuts in budgets, higher growth targets, disruptive competitors, new technology, and a drive for more accountability. Throughout this time, as any key agency partner should, we've told them steadily and assuredly that the solution is to invest in advertising, to embrace new technology, to learn new skills, to monitor the competition, to look to the future, and to invest in training.

We’ve listened to their needs and stated calmly that the future is bright, that by being agile, confident and raising ambition levels, they can grasp the opportunities that the chaos provides. 

We’ve said it so blatantly and tirelessly because it's common sense, because it's an empirically-proven business strategy, and because it works rather nicely for us.

But what about ad agencies?  How are we doing? How are advertising agencies adapting to a post-digital age? We now see an environment where our peripheries are swollen by venture capital money, by a tide of optimism, and by a world of greater possibilities, thanks to new technology and innovation. We also see threats, we see business is being taken in-house, we see media owners stealing production, ad tech companies automating our precious thinking, and it seems now is really the time to fight.  Have we done like we tell our clients?

A failure to listen to our own advice.

It seems we’ve done the opposite. We’ve cut fees, and in order to maintain margin, we’ve cut our most expensive (and thus valuable) staff. We’ve understaffed teams, increase scope, and done all we possibly could to scrape by and not get fired. Holding companies and agency owners have come to terms with lower revenues, while defending a margin. In the process, we've devalued our product quality and brand equity.

Have we become more agile and learned new skills to compete in the modern age? We’ve become more agile in the sense we've become better at working with less, but have we blown up the agency model to work around new needs?  Have we put digital at the heart of our business? We know deep down we’ve resisted any change, and digital has merely become a new specification to bolt onto the end of our production process. 

Have we retrained our staff, and embraced and built for the future?  Have we become more ambitious or have we tried to hide?

The real opportunity is clear, valuable and defined

The agency world is changing faster than ever before, but TV is not dying, mobile advertising won't change everything, and Twitter is not the dawning of a new age. However, there is chaos, and more than ever before, there is a greater need for valuable, wise people to lead agencies and clients through the blended new world of opportunities and threats, time-proven strategies and new possibilities, to embrace clients’ problems and to provide more profound solutions. 

We're in a vicious circle, and at some point in the process, clients cut budgets, we've produced a cheaper and worse product, we've been valued less, lost our seat as trusted and invaluable partners, we've become a supplier and we've thus faced lower fees.

How have consultancies done? Have they lowered fees, stepped away from the boardroom, or have they grown the most of the last 10 years at 6 percent? Have they maintained gross margins of 30%, and are they investing collectively several hundred million dollars to face the changing world of advertising?

The good news is that they show what confidence and belief and unique knowledge can do. They charge for the diagnosis, the ideation and the implementation, while we beg for the chance to give most away for free. Are they higher quality people, or have they just traded on measurable success, and treated their product with seriousness, while we enjoy table tennis in our offices and the right to wear ripped jeans? Seriousness is not the answer, aspiration and conviction is.

So maybe for a final time, to embrace a new amazing future, to return to our seats at the table, to make a difference in the world and to stop pretending that a promoted tweet is embracing the future, let’s start becoming our own best clients. 

Let’s stop cutting and saving ourselves into bankruptcy, and instead let’s build a platform to solve our clients’ biggest problems and to become a true powerhouse industry for the future.

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5 comments about "Attack The Opportunity In Advertising".
  1. Ed Papazian from Media Dynamics , August 5, 2014 at 7:48 a.m.
    Agreed, Tom. Also, when will the agencies learn that it is essential to really integrate their media and other functions----like "creative"---- and, within media, to do the same between planning and TV time buying? So long as every isolated fiefdom marches to its own drummer there can't be real progress.
  2. Drew Lehman from DOmedia , August 5, 2014 at 11:24 a.m.
    Hey Tom, great call to action. We've seen the demand continue to grow for a technology solution for the industry; its a powder keg and this might be the spark to ignite it. The hardest challenge we've faced with our planning and buying platform is behavior change. The change needs to come from within but change is hard. Hopefully your readers can help shift the tides of erosion.
  3. Robert Martin from Add any news topic , August 6, 2014 at 9:36 a.m.
    "We're are own worst clients" -- this in the first graf? Human copy editors can go a long way toward maintaining a professional appearance.
  4. Elsie Maio from SoulBrandingSM Institute/Humanity, Inc , August 7, 2014 at 2:20 p.m.
    Yes! As a lifelong management consultant, I can tell you that the 'advertising industry' has a major chance right now to step into an unmeet client need: bridge the gap between theoretical 'strategy' and tangible creative execution. The identity firms have tried it but their business model limits output to names, logos and brand architecture systems. We've been collaborating with brilliant creatives and clients are LOVING it. I think you are on to something, Tom.
  5. Alan Pafenbach from SapientNitro , August 8, 2014 at 3:17 p.m.
    Here's a theory on why consultants command outsized respect and compensation. Management consultancies are stuffed with people with MBA's from top business schools. These are people cut from the same cloth as the executives they consult. There both agree on the value of that diploma and reward the consultant with respect (and consequently a profit margin) with less quibbling. Basically they're both in the same club. Many marketing people, especially advertising people, earn their stripes on the job. They have deep practical experience but they have no 'certificate of achievement' a C-Suite exec can relate to. Except a Cannes Lion perhaps. Therefore ad folks are perpetually in a position of having to prove their value by doing the work first (pitching). The client assumes the consultant has the goods and willingly writes the checks. The client doesn't believe an agency does until he sees the ideas first. Just a theory.