Friday, November 11, 2011
Thursday, November 10, 2011
Wednesday, November 9, 2011
Would you choose a digital or an integrated agency for 2012?
About five days ago, a dear friend of mine asked my opinion on whether
she should entrust digital to her brands’ existing agencies or hire digital
specialist agencies. Currently they do both, but are somewhat dissatisfied with
the results.
I asked which were her existing agencies, and surprisingly she asked me
to answer the question without knowing. She DID SAY none of her traditional
agencies had REALLY led the company toward digital, though now that she was
expressing serious interest they claimed to have all the requisite
capabilities. Similarly, NONE of her
digital partners have provided real programs based in brand strategy. She also
asked why there was a need for separate digital shops – that intuitively she
understood it was complicated, but shouldn’t big agencies be able to deliver
the goods?
Never one to shy away from giving a long winded opinion, I sent her the
following:
After the dot bomb, some major
traditional agencies saw digital as a strategic distraction. They felt it
lacked creative options that fostered brand development, added pronounced
audience and media complexity, required more staff per dollar to execute, and
demanded expertise that their traditional media teams lacked.
All that was true in its way,
except perhaps the strategic distraction part. But one could even make a case
for that when digital usage was relatively low. Digital was quite limited
creatively. And was and is far more complicated, especially as it is structured
and managed now:
1.
Tens of thousands of media options, versus
100 or so in TV and really only about a dozen given how many properties are
owned by the largest media companies
2.
Dozens of creative options
3.
A buying process that still relies on
RFPs/responses/phone calls/meetings
4.
A tracking and trafficking process that often
leads to remarkable amounts of manual labor
5.
High agency turnover and title inflation
6.
Clients and agency leaders expecting more
for less PLUS innovation
The advent of DSPs and trading
desks is slowly reducing the amount of labor per dollar, but most brands still
expect a significant portion of spend with specific major pubs and in “breakthrough”
programs. Those require lots of labor per dollar.
Until the past couple of years,
most of the traditional buying leaders were not terribly troubled to let
digital agencies take this high labor/low margin business. Naturally, sister
digital agencies were preferred, but losing 3 or 5 or 8% of total spend wasn’t
a “crisis.” It represented relatively small dollars and these digital agencies tended
to have subordinate, relatively unimportant relationships with clients.
Further, some major traditional
agencies discouraged digital spending, because:
1. They
didn’t believe in digital
2. They
didn’t understand digital
3. They
couldn’t execute digital well
4. Clients
didn’t care much
Those brand companies that cared
about digital generally employed separate digital agencies. Even many of those clients
that didn’t care all that much chose separate providers when it was clear that their
traditional agencies didn’t “get it.”
As digital grew more important to
brands, they began to ask those digital agencies to play a greater role in marketing
planning, and to involve them earlier in the process. The problem is that there
are many digital people that don’t have the same deep understanding of brands
and marketing as do brand or traditional agency people. I’m not suggesting
they/we are ignorant of strategy, but that because we have historically been
less involved in defining and delivering on major strategic issues, it’s not
our core competency. The digital world has historically been more about DR and
hype, and about providing “activation” in conjunction with a broader branding
initiative. “Activation” meaning moving cases out the door.
Of course, brand marketers have really
woken up to digital. As digital spend has increased, traditional agencies have again
asked themselves why they are sharing business with an indy digital shop when
they could acquire digital business and keep it all. The holding companies in
particular have scrambled to build or buy digital expertise. What they haven’t always
done is give their various agencies incentive to collaborate.
The key “battle” that will
determine the manner in which brands engage in digital is which “side” of this
agency conflict will address its weaknesses more thoroughly.
·
Traditional or “Integrated” agencies have profound understanding of brands,
marketing goals, and ideas. They are generally behind in understanding and
having experience with digital technology and vision. They need to find ways to
acquire digital expertise and drive competitive advantage by creating value in
cross media creative development, planning and buying. A portfolio approach to
media built on a digitally centered idea.
·
Digital agencies need to enhance their lead in digital knowledge, while really mastering
the fundamentals of strategy, branding, and real bona fide marketing. Shifting our
thinking from one driven by passion for forms of execution to passion for
strategic objectives. Only in this way will we be able to fully leverage our
seats at the brand table. Only in this way with digital shops marry passion and
expertise to delivering on business objectives. And the key is, our ideas and
programs need to work both within and beyond digital, even though we don’t
derive revenue from traditional efforts.
Which brings me to the answer to my friend’s question. I told her that
agencies are ultimately collections of individuals; applying generalized
conclusions to specific companies is misguided. But that it would be a good
idea for her to assess the extent to which her traditional alternatives really
“get” and are inspired by digital. And the extent to which her digital
alternatives “get” strategy and brand business issues.
Ultimately marketing will end up being led by companies that define and
deliver highly strategic, digitally centered integrated campaigns. Campaigns
that capitalize on the best opportunities in digital, but within a broad brand building
context and a larger media view.
The extent to which digital agencies have a future relates to their
ability to stay ahead of digital developments AND understand branding, the
difference between a digital idea and a digitally centered idea, and the best
ways to really partner with other service providers. Otherwise, there’ll be no
reason for brands to take on the complexity of having two agencies where one
might suffice.
Partnership is a critical
consideration because in many cases agencies don’t play well together. That is
sometimes even the case when both agencies are divisions within the same
company. Brands need to do more than say, “get along.” They need to reward
cooperation and punish its absence.
This response dissatisfied my friend. “It was a straightforward
question. Just give me a straightforward answer.”
So I giggled a little, and replied, “Yes”.
She was not amused.
It’s after moments like that that I am lucky to still have friends. ;-)
Tuesday, November 8, 2011
Monday, November 7, 2011
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