Both the NY Times and Ad Age have pieces today about the challenges facing the advertising industry today. And, frankly, this is something that we hear from our clients all the time. In fact, we often refer to ourselves as advertising therapists, because clients frequently come into the Lab not to ask for something specific, but to say they "just don't feel right." And, because of that, we're frequently involved in a much broader conversation with our clients. And, while many holding companies have acquired a variety of different agencies to bring a broader set of resources to their clients, it's still very hard for them to think as radically different as they sometimes need to think today.
Another part of this whole area is that they also usually use the new technology to simply deliver the same old thing. I've seen people running static ads on way cool, plasma screens! Look at movie theatre ads -- people selling their 30 seconds spots, without thinking about how it plays in a very different venue.
Will the agencies hear the message being delivered today? Only the Shadows knows!
BBDO Worldwide in New York, General Electric's longtime advertising agency, was not getting the message.
The agency had been offering G.E. its panoply of traditional marketing ideas, leaning heavily on the standard 30-second television spot. But Judy Hu, general manager for global advertising and branding at G.E., demanded something daring. What she eventually got fit the bill: an online campaign with a virtual sprouting seed that computer users can tend and send to people they know by e-mail.
"They kept bringing us what they thought we wanted," said Ms. Hu of her exchange with BBDO a couple years ago. "It took a while to make them believe we wanted something different."
The world of advertising turns upside down when the advertisers - not the agencies - are the ones pushing the envelope. But that is what has been happening.
The advertising business is undergoing an upheaval, forcing executives to radically change how they do business. Marketers are trying desperately to stay ahead of the technological innovations that are changing how consumers view their messages - and are putting pressure on their agencies to adapt.
The ad firms are more eager to please than ever. The major public agencies face shrinking profit margins and sagging stock prices, leading to a shakeout and a frenzied effort to cut costs.
It's unclear if the traditional agencies will be nimble enough to halt a slow decline. Already, many famous names are vanishing: N. W. Ayer; Bates; Bozell; D'Arcy Masius Benton & Bowles; Earle Palmer Brown; Lintas; Warwick Baker O'Neill.
The big agencies also face a throng of hip new rivals, which have pounced on the opportunity and are looking to steal business. Those boutiques use their oddball names - like 180, Amalgamated, Mother, Nitro, Soul, StrawberryFrog, Taxi and Zig - as branding devices to signal they are not about business as usual.
"Clients are looking at the results they're getting and they're not happy," said Miles S. Nadal, chairman and chief executive of MDC Partners in Toronto, the parent of innovative, creatively focused agencies like Crispin Porter & Bogusky and Kirshenbaum Bond & Partners.
"Historically, agencies pushed clients," Mr. Nadal said. "Today, clients are pushing the agencies. The same-old, same-old is not being accepted."
But some agencies may be moving too slowly.
"There's an incredible ability to cling to what's been done because there's a comfort in that," said Ian B. Rowden, executive vice president and chief marketing officer for the Wendy's brand at Wendy's International in Dublin, Ohio.
"There's a lot of talk but less action," said Mr. Rowden, who has also held senior marketing posts at Coca-Cola and Callaway Golf. "The old model still drives a lot of things."
"It's almost accepted that the model is broken and it's time for a new approach," said Carl Johnson, a longtime executive at traditional advertising agencies like TBWA Worldwide. He and four other high-profile refugees from mainstream agencies are now partners in a creatively focused New York boutique named Anomaly.
"No one comes to us for more of the same," Mr. Johnson said. "Our last resort is an ad, if we can't think of anything else."
Anomaly works with the wireless licensing group of ESPN, part of the Walt Disney Company, on not only marketing but also "some product and content development," Mr. Johnson said. The agency shares in the revenue by keeping an equity stake in whatever is produced.
"This way, we get paid for the quality of our output," he added, "not the quantity of our input."
Anomaly is among a rash of boutiques that have started up to capitalize on the desire among marketers to do things differently - and the inability of many bigger agencies to accomplish that.
In some instances, traditional agencies are diversifying, forming units to specialize in nontraditional tasks. The Kaplan Thaler Group in New York, for instance, opened a division called KTG Buzz to focus on, well, marketing that generates buzz.
"Creativity used to be, 'Think inside the box.' Then it was, 'Think outside the box.' Now, there's no box," said Linda Kaplan Thaler, chief executive of Kaplan Thaler, part of the Publicis Groupe.
Mr. Robertson said the changes he is making at BBDO for G.E. and other clients like FedEx, PepsiCo and Visa are wrenching but necessary.
"It's getting easier and easier for consumers to switch from things that aren't engaging them to those that will," Mr. Robertson said. "And they are."
"You can look at that and say, 'Oh, my God! The sky is falling,' " he added, "or you can look at it as a huge opportunity to create content for your clients that does engage."
Link: Advertisers Want Something Different - New York Times. (Registration may be required.)
And here's an excerpt from Scott Donaton's piece in Ad Age.
Hegarty said ad agencies' tendency to worship long-ago glories is one of the reasons they are losing relevance these days, particularly since they don't own their ideas: "It's incumbent on us to reinvent ourselves."
As he wrote in his piece for the Media Guardian, "Just as a shark has to keep swimming to survive, an agency has to keep evolving to succeed. It has no fixed assets, no past equity to trade in. ... It has only its next idea, and it better be a good one."
Agencies need "the desire to break what you've created and the courage to start again."
A black-sheep agency
Bartle Bogle Hegarty is still trying to make a bigger name for itself in the U.S., but remains one of the most revered agencies in the U.K., where its black-sheep mascot symbolizes its "zig when others zag," challenger-brand mentality. It's a position of which Hegarty is equally proud and wary.
"As far as the client's concerned," John said last week, "what we think about tomorrow means a lot more" than what we did yesterday.
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