A recent Ad Age article on “Serial Reviewers” warned clients who frequently oust agencies, like 1-800-Flowers, Quiznos, Chipotle and BMW, are “hurting their brands and risking a bad reputation” in the advertising industry. What the article didn’t say was that CMO tenure plays a bigger part in brand erosion than any agency’s missteps. If clients fix that–they fix a much bigger threat to their brand than a poor agency choice. They might even save a good agency relationship.
The best agency in the world will struggle with a client who replaces its CMO every two years.Take Chipotle: even though they’ve cycled four different agencies in six years, they’ve only recently named a CMO.Quiznos changed Chief Marketing Officers three times in six years. When the C-suite shifts, companies experience a lack of leadership and clear direction–the kiss of death for an agency relationship. And potentially more damaging to the brand than hiring the worst agency on the planet.
Agencies aren’t without fault. Clients don’t make changes when everything works. But if things seize up because of musical chairs in the executive suite tell your agency, because even if you don’t, they know it. It’s human nature to blame the other party and show them the door. Ultimately, client/agency relationships are stronger when both sides are willing to point out their failures. That honesty and transparency may open up a dialogue to fix the problems before the need to change agencies–and that could be good for everyone.
10 red balloonshave been hidden around the U.S. and you have to find them. How long would it take you? Could you do it in 4 weeks , 6 months, a year? MIT Media Lab’s Dr. Riley Cranetook that challenge, which last month was presented by the Pentagon’s DARPA, and with his team, used social media to accomplish the task in just 8 hours and 52 minutes!
Ad agencies are facing real challenges to their value proposition and the outcome of the DARPA experiment is indicative of how social networks have changed the advertising industry forever. DARPA’s experiment (and MIT’s approach) can offer clues about how agencies can make this industry shift work for them—rather than feeling threatened as the ground moves below their feet. And it’s a cautionary tale for clients as well.
The new big idea
Social networks (and by extension, crowdsourcing) have helped bring about the democratization of the big idea, which is probably one of the biggest shifts to our industry in the last 50 years. Marketers now know their agencies aren’t the sole generators of solutions. This shift is changing how clients compensate their agencies—or at least the value placed on previously highly-valued goods—like the big idea. Traditionally, advertising agencies focused on finding balloons—the big idea—and clients paid handsomely for it. In today’s hyper social-networked world, often the strategy is the big idea.
In the case of the DARPA experiment, strategy won the day. Someone (MIT) had to devise the system or architecture that allowed the solution to be found. In other words, DARPA wasn’t paying for the balloons to be found (the apparent solution) they were paying for the creation of the process. Today many marketers are less interested in paying agencies for ideas—they would rather pay for strategy, for process, and the broad thinking to get to the solution. How does this change the value of creativity?
Elton John famously wrote “Your Song” (one of his biggest hits ever) in about ten minutes after his lyricist partner Bernie Taupin penned the words over breakfast. By today’s valuation of creativity, Elton and Bernie would probably have been paid 25 bucks for that masterpiece. This strikes fear into the hearts of many creative people because if agencies can’t charge well for their ideas, what do they have to sell?
Clients should look to their agencies as strategic consultants, not just idea factories. Yes, clients still need ideas and good ideas still sell stuff, but the fact that ideas are likely to come from anywhere goes against having an agency if ideas are all you want your agency for. It’s like hiring a piano teacher to sit in your living room and play you tunes. Real agency value comes in having a partner with broad perspective and insight on your business, a team with peripheral vision, foresight and hindsight who is strategically responsible for making sure the whole plan and execution of that plan is greater than the sum of its parts. To use another music analogy, if the CMO is the conductor of the orchestra, the agency is the Concertmaster. So in the search to hire your next ad agency, find an agency with demonstrated strategic ability–one that uses social networks to their advantage to tap creativity and good ideas, wherever they live, not the ones trying to be balloon finders.
There’s a story about a family who runs out of gas in the desert a few hundred yards from the only gas station around. The station owner comes up with a gas can, and charges them $25 for gas, $25 for the gas can and $150 for labor. The stranded travelers question “what labor?” The attendant responds, “All the thinking to add it up”. The gist is this: clients should be paying agencies to think, not necessarily execute. Agencies need to be willing to use all the tools currently at their disposal including sourcing ideas across social networks. Clients will more likely value an agency who is not threatened by, or needing to be, the only one with the big idea—because they aren’t anymore.
It’s tough out there for marketers on both sides. Agencies, in particular, are having a rough go of things amid a complicated mash-up of contracts, compensation, and collaboration. So what does this shift mean for the future of the advertising agency and the clients who hire them? DARPA’s experiment and MIT’s solution may offer some clues:
Don’t hire an agency to look for balloons but instead, hire an agency who realizes that the solution is not always the end goal.
Hire an agency to think about your problem strategically, who when necessary can find solutions outside their own walls.
Hire an agency who realizes that the best solutions to your business don’t always happen inside the marketing department.
This last week of December is a wonderful time to gather with friends and family, a great time to plan for a new year and close out the old, whatever and however you celebrate. This year is especially poignant as we close out a decade.
Certainly, it wasn’t all wine and roses. It’s been a tough year for some–many people have lost jobs, others have lost homes and some people see little to celebrate. But I hope that in your reflection, you find thanks, peace and hope. And regardless of your current circumstances, you strive for great things in your future.
A special shout out to the hundreds of great agencies I’ve had the chance to meet this year: Thank you for your passion and enthusiasm for what you do. You make my job a blast!
To my clients, peers, allies and friends: Thank you for allowing me a window into your businesses. Together we’ve learned a lot and accomplished so much and I’ve been honored to be involved. I look forward to working with each of you in 2010.
To prospective clients of Hitch: I especially look forward to meeting you. I don’t even know you yet, but I know the challenges you present will be engaging, rewarding and provide opportunity for many talented people.
So Happy New Year. If your year was up, may 2010 take you higher. If your year was down, may you swing way up. May you find meaning in your life and enjoy your work–whatever that looks like.
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