Commentary
The Future Agency Of Record Will Be Social
- by Joe Marchese , February 3, 2009
There is a quiet battle raging in the advertising industry over who will become the Agency of Record (AOR) for marketers' social media efforts. With traditional media for delivering advertising declining in reach and effectiveness, and an even greater call for advertising efficiency in a down economy, becoming a marketer's social media AOR can be a huge win and provide a map to a much-needed new business model and revenue stream for agencies.
Further complicating matters, as technology improves and the proliferation of social networks continue, all media will eventually be considered social media. So those agencies that win the title of social media AOR today, may very well simply evolve into a marketer's overall AOR, acting as the central point of all of a client's marketing initiatives.
The battle for the social media AOR title is even crossing what was once well-defined lines within the advertising industry. It seems to make just as much sense that a marketer's social media initiatives are handled by a public relations agency as it does to enlist a media buying agency. Maybe the creative agency is the right lead for social media efforts? Would it be better to have a small company focused on social media in its DNA, or a holding company, with its expansive resources? All seem viable, and all likely are. It will come down to who can evolve to meet the demands of stewarding a client's social media efforts. Here is a brief look some of the players and what makes them a potential fit as social media AOR:
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PR - Because success in social media is more "earned media" than "paid media" -- and isn't earned media what great PR companies deliver? It is obvious to nearly every advertiser that to be effective they need to be in people's social content, rather than simply being placed next to people's social content. It's like the difference between being covered by the New York Times vs. buying an ad in the Times. Buying ads is just fine, and there will be a place for it, but it's not the holy grail.
Media Agencies - Because "free media" is a bigger fairy tale than unicorns. There will be significant capital outlay to earn people's attention in social media, which will need to be spread across various social media vendors and creative partners. It will be incredibly important to track real costs and measure ROI.
Creative Agencies - Because nothing is more important in social media than the idea and execution. With bought media, marketers were at least guaranteed reach even for bad ideas and bad execution; with social media, bad ideas and bad executions are over before they start. Additionally, social media is going to demand creative iteration and evolution based on real-time consumer feedback.
Research/Consultancies - Because "listen to the consumers" is the buzz phrase of choice for good reason. Social media provides as much, if not more, value as a way to listen to people's needs and wants. Marketers can finally have the one-to-one relationship they have been looking for and do a better job of creating and distributing products people want. They just need a way to hear people, and be heard, through all of the noise.
Independent Focused Agencies - Because managing social media efforts requires not only a unique skill set, but a unique relationship between a client and its social media agency. Independent agencies focused on social media have the advantage of structuring their offerings, relationships and organization to maximize return on a client's social media initiatives.
Holding Companies - Because if you think about it for a second, they have all of the above, all of the pieces of the puzzle; fitting them together seems to be the tricky part. But if the holding companies can pull from their various resources to provide an overarching social media solution, it might be hard to compete with them.
Search Engine Marketing Agencies - Because their DNA is based on the type of ongoing, iterative relationships (re: partnerships) necessary to allow success in social media. SEM firms redefined ROI for marketing initiatives, and while social isn't search, it's not broadcast, either.
In the long run, marketers will need agencies that possess all of the above skill sets -- or at least one agency proficient in coordinating a seamless effort across all of the disciplines required to activate their brands in social media. Who do you think wins? What else will they need? Leave your comment here and/or @joemarchese (www.twitter.com/joemarchese) me on Twitter, to continue the conversation.
Finally.
Great column Joe. Social is becoming the central hub that connects marketing, customer support, product development and reputation management. This is a primary change in the way companies interconnect with markets and customers and the new agency of record has to be prepared to wade into all of these business divisions and unite them. My guess is we're going to see an entirely new agency model emerge that is not hampered by the silos you describe. Among our customers we're seeing the early adoption and growing understanding of this new nexus- and interestingly most are either PR or 'digital' agencies. Very little uptake with the media-focused agencies so far. As with PPC/SEM/SEO adoption, they tend to lag a bit in adopting new models. This time around lagging could prove disastrous because the move into social media is happening very quickly
Great article, Joe! Retweeting!
@venndiagram8
I run a Digital Word of Mouth Agency and we are partnering more and more with PR. Within social media everyone is a potential "media influencer", so it makes perfect sense and is very effective for the clients to pair the two. Though, Media is still where most of the work comes from. I don't think there exists an agency that could be a Social Media Agency of Record. I think it would have to be a partnership of PR, Digital Word of Mouth, Social Platforms, SEO and Web Analytics.
Hey Joe,
You article is very poignant in what is going on in our space right now. I work for a social media technology and services provider. To date I have engaged with clients in 3 ways via my company: directly, as a tech/ service provider picked by the AOR and even as recently as yesterday in a meeting part of a team picked by social media consultancy group who is orchestrating the social media intricacies for the client. I was struck to by the thought is the social media consultancy more nimble then a huge agency or tech provider to address the social media needs for their customer? They are not only practitioners which help on the ideation side, but they also have the network to find the vendor (SEO, interactive, creative, and technology) to fill the gaps that some agencies and tech providers may not have. Or is better to have a one stop shop that can provide the holistic social media needs from ideation, implementation down to analytics? I am not sure who is more nimble but I have a feeling we will see more social media consultancy groups popping up…
Joe, this is a great article and I've passed it along to our partners at MediaSauce and will retweet it.
But I would say that agencies that use and can teach companies how to use social media, both internally and externally, will win. This is a completely different mind-set. I guess what I mean is how can a company use social media externally to get customers (via an agency) but not use it internally to help with process? To me, they are missing the boat on SM.
I completely agree that agencies can't wait to see how this will turn out. We are at the ground zero - it's a level playing field. Everyone is learning this at the same time and those that use it and understand it will win.
http://www.twitter.com/donschindler
Just as there's never been a need for a separate TV agency, radio agency and print agency, there shouldn't be a need for a separate social media agency. Just another tool in the toolbox, ladies and gentlemen--that is, if you're brave enough to pick it up, swing it around and know what to pound with it.
Joe, love the application of PR principle that good social strategies really get you "earned media." Everyone gets excited by the promise of "free" impressions or mentions, but there is a real person behind a presence like @zappos and his time isn't free. Doing it right is earned, for sure.
Wonderfully stated. Nothing is free. Social media is not free from costs of establishing a monetization formula to the time wasted on counting button holes, but measurement of ROI will be best seen in increased sales, just like PR ROI. However, if negative responses appear, the agencies and clients can move faster to correct the problem. Conversely, positive reinforcement can enhance movement to increase sales.
When authenticity is the currency of social media how can businesses have a proxy for their "voice?"
IMHO, the best social media initiatives are, will continue, and need to be "in-house."
Excellent column. Loved the last one too.
But since I have a small, very niche PR company and do a ton of online social networking - this had such clarity for me and truly reflects the current SNS landscape.
Yrs, Jeanine (aka pr)
Your post displays an attribute of great NFL quarterbacks, i.e. "seeing the field" and "knowing when the backside pressure is about to hit".
I like how you have visualized the historical silos and weave a story how they need to be inter-dependent.
This past Sunday's NY Times Magazine in an article "The Big Fix", http://is.gd/ie3W, by David Leonhardt relates how the new Obama Chief of Staff, Rahm Emanuel laid out an idea later called "Rahm's Doctrine", i.e. "You never want a serious crisis to go to waste. What I mean by that is that it is an opportunity to do things you could not do before."
The tools are there, who is going to pick them up?
Great article that parallels the client-side discussion about where social media/WOM should be owned - Advertising, PR, Research, etc. and in the short term the Social Media AOR is likely to follow the unique choice made by client's own departmental allocation of social media. In the long term it'll require a restructuring of client-side thinking about marketing in general. Social media & WOM is so closely tied to customer service and research but it's marketing opportunity is more immediate and tactical like advertising.
We've experienced the best results by creating a client-side 'task force' that crosses marketing, customer service and PR all working directly with us (digital agency) to develop and execute ongoing social media programs. On the agency-side, online WOM data comes from the company best suited to provide the numbers while the marketing insight/strategy is developed by the agency that best understands the digital space and can execute in all digital channels - it's important to manage these communications comprehensively rather than in silos of PR, Media, creative, etc.
I've found this discussion fascinating, from the publisher side. When we founded BlogHer in 2005 we worked with a few forward thinking individuals in mostly PR agencies. Folks who thought we could help scale blogger outreach. Increasingly we began working with the corporate evangelists tapped to learn about this crazy social media thing, who in turn, introduced us to brand managers who were interested in testing. In that group were the digital firms, who would have worked with us if they had budget to bring us in. Finally we worked with the media agencies, who were the most removed from our community because we initially didn't show up in Comscore (now we do, but there is still an issue with getting them to count the entire long tail--fortunately we know our true numbers from Nielsen Site Census and Google Analytics). Today, we build review and other forms of engagement programs for all those involved. All of this preamble is to show the evolution of how social media has been integrating among the brands and the agencies. To say that there will be separate shops for it might have been true a couple of years ago, but it seems that now all are competing for social media business; all have varying layers of complexity. I think the "stars" from all disciplines will come out of the woodwork, whether they work for the brand or the agency, and they will form teams. These teams will be the busy ones.
I agree with the article in many respects. The one thing I would like to add is that there is a need on the client side to have a social media marketing expert. Social media is a delicate balancing act and if the client does not have s representative that understand the intricacies of social media it can all be for not. There are a lot of client side folks that because of their misunderstanding will quite often overrule the social media agency's recommendations and try to apply old school tactics. There is a tendency to say "How much will it cost to get me into the social media space? I have ROI that needs to be proven within the next quarter or I am not interest in marketing here" I find quite often when you explain that it can take time for the brand trust to be built up you are met with resistance and a tendency to apply what worked in the past for mass etc.
I know that there are a lot of companies that have Interactive Marketing Managers and now they need to expand a role into the social media space. Rogers, a large media conglomerate, here in Canada is attempting to do this by an ad posting that I saw this morning. [http://bit.ly/4rbr4M] It's a start but it looks more like a web savvy PR manager that they are looking for but it is a start in the right direction.
I blogged about the importance of twitter to brands yesterday and think that the post reiterates the why the subject of this story is so bang on.
http://powershiftermedia.com/142-battle-of-the-brands-in-the-twittersphere/
JP Holecka
Twitter @jaypiddy
Joe...this is exactly what is going on and needs to continue happening.
The winner? Everyone wins with "one-to-one" relationship marketing. Consumer gets exactly what they want...and guides marketers to provide better fitted products and services. Consumers push more "consumerism"! Marketers win because they know through consumers "what" to build next. And the cycle keeps going. All the new technology and applications do is provide this amazing new "link"!
A couple great books that saw this coming were Marshall McLuhan's "The Medium is the Massage"...and "The One To One Future" by Don Peppers and Martha Rogers. Both older books...that really saw the future coming!!
www.twitter.com/SarshUpD8
The once ubiquitous and powerful ad agencies have struggled to, or refused to adjust their structures to an increasingly complex mix of channels and message segmentation.
As fragmentation of mass audiences and economic pressures on staffing and budgets forces communication to becomes more complex (and efficient), Clients have suffered.
In response, there has been a separation of (horizontal) strategic integrated planning and (vertical) discipline planning and new types of marketing suppliers / agencies have emerged to fill the service void.
Critical strategic marketing functions that provide valuable proprietary insights that drive brand conversations will most probably fall in the domain of an internal client department or be within the scope of a specialist horizontal strategic planning partner
Joe,
Its none of the above. How about Digital Marketing Agencies oh and holding companies as a second. I agree with an earlier post that it needs to be many brand advocates in an organization -not everybody but many from customer service to brand leads. The agency needs to provide the service of helping companies transition resources to prepare for social as a core communications platform.