I started getting to know HL2 in a recent ad agency search I conducted for a client in the Pacific Northwest.  Their clients include HTC, SBC, Microsoft, HR Block, ATT Wireless, Hotels.com

There were a few different long chats with Don Low, one of the founding partners which gave me a lot of insight into this group of 70 creative professionals, but I really started to get HL2 watching the pieces in the 4th chamber–more so than seeing their work.

I’d like to hang out at a Fat Burger or shoot hoops with them (I think I could stuff the TaxCut box) –but apparently they’re also pretty good at that marketing thing.  Founded in 1994, they’re more fun than most 15 year olds you know–and they won’t talk back or steal your car.  OK, they won’t steal your car.

What was the aha moment when you realized “Our company needs to be doing things differently than we have been”?

My business partner, Tom Horton says, “Only through suffering do we become wise”. While we love new business wins, it usually takes a major loss for us to get pissed off and make dramatic changes. Two years ago we lost a major pitch and in the ‘loser’ call we heard, “We loved HL2 but the other agency just had a stronger analytics methodology”. We now have an analytics group of 8 and every campaign in the office has accompanying KPI’s with a corresponding dashboard for reporting. It’s transformed our business and the new business effort has never been stronger.

What books are on your nightstand or great blogs on your Google reader?

Soldier of the Great War by Helprin, A Distant Mirror by Tuchman and biographies of Mark Twain and Einstein. My personal reading takes precedent when I get home.  But I’m also working through a book called Crowdsourcing by Jeff Howe. At work I spend time with a few key blogs – Seth Godin, the Dachis Group, Ad age and the Web Analytics blog.

Give me an example of marketing you think is brilliant and why?

Sprint is giving it a good go. Coke media is extremely focused and disciplined. I like the traction that Bing is getting as a start up brand.  The Nike+ Join the Race campaign is experiential and inspirational.  Each of these brands has deployed a multi-disciplined approach that spans TV to event promotion and social media.

We’ve all read that the agency RFP process is broken. Many agencies aren’t even interested in competing in pitches. Do you see an alternative to the process?

I actually believe that, for many companies, the RFP levels the playing field and brings new agencies to the table. I believe you win the work you deserve. Either you’re digging deep, investing and setting up your agency to win or your coasting. The RFP process has allowed HL2 access to clients we never would have met on our own.

However, all clients don’t need to go through this formal process (especially the clients we’re currently pitching). Meet with 4-6 select agencies, get to know their culture, see their work, learn how they think and narrow to two. Then ask for proposals and presentations. While this is more legwork for the client initially, the long-term relationship is more likely to stick. It makes no sense to sit in a room and review 20 written proposals in today’s marketing world.

What does the ad agency of the future look like?

Lean, mean, smart, resourceful, marketing saavy, focused on the numbers, uber-creative.

Yes. That about sums it up. With a really cool space and an interest in the client that goes beyond billable work.

The agency of the future will need to spend more time looking for ways to tell stories and exploit technology to deliver great experiences, participate in the conversation and bring real value to consumer.

What do marketers need that ad agencies are not giving them?

Love. They’re not giving them love. Unconditional, immutable love. I’m-waking-up-in-the-morning-thinking-about-your-business kind of love. As agencies are working to wean their business model away from large media commissions and making their nut on fees, they are squeezed for talent–creative, account, planning, production, analytics talent. Larger agencies are no longer able to over-service accounts like they used to because there just isn’t enough money there. Clients stop feeling the love. Today’s agency is learning to be more nimble and is working to create a culture where the every employee is working to deliver superior strategy, creative and service.

Whom do you admire and why?

Winston Churchill. Primarily because he is proof that you can lead when you get old…. (Many historians now think he was suffering from pre-senile dementia while he was the PM. I think Winston; either drunk or affected was better than the rest of us with all our wits). Churchill is history’s portrait of resilience. A drive that never quit, unwillingness to compromise and foresight that saved the world.

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Today’s Ad Industry Innovator is Jake McKee from Ant’s Eye View.  Talk about a niche, these guys get customer engagement like Picasso gets painting.

The founders have very diverse backgrounds: Jake McKee built his reputation playing with Legos and Sean O’Driscoll in a company you may have heard of in Redmond, WA called Microsoft. These guys are bright.  They’re insightful.  Ant’s Eye View occupies a place in marketing that’s not only unique, but 5 years ago, wasn’t even talked about–now every company needs to be listening.  The voice of your Customer demands to be heard.

Ant’s Eye View recognizes that as companies grow, often they unintentionally detach from the customer relationship and miss out on crucial conversations happening about their brand.   Through grassroots, online and offline collaborative processes, Ant’s Eye View helps companies engage with those customers by developing strategies that identify, address and leverage those conversations.

What was the aha moment when you realized “our company needs to be doing things differently than we have been?”

Actually we’ve developed our company specifically around the aha moment! Our team has been doing customer engagement work for a combined total of something like 40 years. We get that this customer engagement stuff is the path to amazing business success and customer loyalty. When Sean O’Driscoll left Microsoft and when I left LEGO, it was because we saw that so many of those companies and agencies talking about this stuff had never been on the frontlines of customer engagement and we thought this “in the trenches” understanding was important to share.

What books are on your nightstand or great blogs on your Google reader?

Well, selfishly, I just got my first copy of the 10^th anniversary edition of The Cluetrain Manifesto, where I had the extreme honor of being asked to write the afterword. On top of that, I just got a review copy of Angela Connor’s 18 Rules of Community Engagement. It’s an exciting to book to have gotten in the mail: small, tactical, and smart.

Give me an example of marketing you think is brilliant and why.

One of my favorite examples, an example that makes me just giddy with excitement is the new and much written about Skittles.com. I once had someone ask me “how do we create community and social media for a particular soda pop?” At its core, the question was really about an agency trying to understand how to pitch “social” to clients. But the problem with the question is that soda pop in itself doesn’t have much inherent social interest. Marketers can work hard to create some type of inherent value, but what Skittles realized is that it would be smarter to simply highlight the conversations, interest, and inherent value already being created by their customers. Replacing nearly their entire Web site with a floating nav item that links to Wikipedia articles, YouTube videos, and a Twitter search. Brilliant. It’s the most compelling CPG Web site I’ve seen to date. If I meet the person that sold this into the organization, I’m buying them a drink for work well done.

We’ve all read that the pitch / RFP process is broken.  Many agencies aren’t even interested in competing in pitches.  Do you see an alternative to this process?

I do agree that the pitch/RFP process is broken in today’s marketing climate, but not for the reason so many agency people talk about. The agency focused argument is one that goes back years, well before the rise of the Social Web: pitches are little more than free spec work that allows clients to get far too much for free and agencies to deal with too much risk.

From my perspective, the problem is that the pitch/RFP process work happens almost entirely void of true strategy development activity. When developing strategy, and certainly strategy work around social engagement immersed marketing, you want to have a better understanding of your customers by first engaging. Listen first, generate ideas second. But a pitch to get business is inherently based in ideas. Certainly agencies are doing research, often expensive research, but that misses a great many opportunities for the client. My work at LEGO had me listening for 6 months to adult fans who were angry that the company had ignored them for decades. After joining fans in basements, classrooms and restaurants to hear their concerns, not only did I learn, but I proved to them that the company was honestly interested in knowing more about how to serve and work with them.

How can that happen if your ideas are being largely generated as a means to first win the business?

What does the agency of the future look like?

I don’t know what it looks like, but I know it has to have a new billing model. In my opinion, traditional marketing agencies will only be able to move to a place where they can more effectively help their customers understand and plan for a more social customer experience once they figure out how to charge for the time that that takes to do. We’re not talking about limited, specific campaigns anymore. Or at least not those alone. But agencies are setup to bill against that model, and it’s nearly impossible for them to effectively teach rather than implement.

What do marketers need that agencies are not giving them?

An agency that is happy, both in approach and in billing model, to train their clients to not need them after a reasonable period of time. Today’s marketing and agency culture is based on the fundamental principle that the bigger check the brand writes, the less work the brand’s marketing person has to do in the daily grind work. When headcount is a core metric of a division’s success, writing checks, even big checks is easy but hiring is not. Unfortunately that simply doesn’t work in today’s environment. When I talk to one of my favorite brands, I don’t want to talk to their agency, I want to talk to the employees of the brand. Agencies have traditionally existed to take the load off the shoulders of their clients, but today they have to be switching to helping their clients learn techniques and tactics for being able to better engage, to scale that engagement, and to support the daily grind in a way that helps build internal competency.

I’m not suggesting that agencies don’t have or shouldn’t have long-term clients. My suggestion is that agencies large and small should be working with their clients “teach, learn, own” model. Once the client owns the project, the (hopefully and expected) success will drive a more complex project that will start the process over.

Oh, and to be clear, I’m talking about marketing agencies, not advertising agencies. There is a often forgotten difference between the two and sadly they’ve gotten mixed up into one concept when we talk about this stuff.

Who do you admire and why?

Easy to explain, hard to name. I really respect and enjoy meeting the practitioners at brands that are doing this social stuff every day, toiling away in relative obscurity. You may know the “social media experts” who blog and twitter and speak constantly, but do you know the folks at H&R Block who are convincing a company working in a highly regulated industry to get involved in Second Life? Do you know who convinced Skittles.com to give up thousands of dollars of Flash development and replace it with Social Web content? Do you know who at Alaska Airlines is the face behind the official twitter stream? If not, you should find out. Those are the true experts, the experts you can learn from.

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