Existential Threats to Advertising Agencies
Published B&T – Aug 2016
Part 2: Credibility:
This is the second of 4 articles looking at existential threats to advertising agencies.
- Identity
- Credibility
- Competition
- Remuneration Structure
Though addressed separately, the 4 are all intertwined.
The first article was on Identity – agencies moving away from their core purpose of Persuasion. A perfect example of credibility, or lack of, was an article in response which stated:
“How Innovation Prize Shows Agencies How to be More Than Just Agencies”.
Read the article and the so called innovation is in fact a community service campaign aimed at getting young men to check themselves for signs of testicular cancer. Excuse me? Strip away the bullshit wording and what we have is an advertising campaign. They used porn stars and supposedly interrupted “programming”, but it was still what agencies have been doing since they first started around 150 years ago. It is innovative, but innovation is not a new phenomenon that was only thought of in the digital era.
“To step outside the existing parameters of Above and Below the Line advertising and explore new solutions, alternatives, the innovative, the lateral. The possibilities are endless with our pool of beyond creative resources as diverse as playwrights, academics, musicians, journalists, performers and psychiatrists. Our role can include correlating these possibilities and creating a total concept from above, below and beyond”.
The above is a quote from the Bond Strohfeldt credentials document in 1990. We didn’t have an Innovation Lab, rather innovative thinking was a culture we created throughout the agency, from receptionist to CEO. We performed many jobs and projects that were outside of what would have been called “traditional advertising”, but they were all to do with Persuasion.
The technology has changed, but the philosophy and approach should not.
The “magic” of advertising and creativity started slipping before the digital era commenced. But this has accelerated with what can best be described as scandals, became better known in the past couple of years.
A consequence is that advertising has slipped down the totem pole of importance and relevance to the CEO and board. If a company puts in a new Gloggity Glog machine worth say $20 million, the directors all line up for their photos to be taken with said machine. But if the CEO asks for an additional $20 million in advertising, he will probably be looking for a new job – advertising is now, more often than not, seen as an expense rather than an investment. (Unlike that bloody new Gloggity Glog machine).
2016 has been a watershed year for the industry. Though many people have spoken and written about various credibility issues, Professor Mark Ritson was the first to tie the major problems and issues together in his series of lectures to AANA earlier this year. Encouragingly, there has been a noticeable shift in attitude and action by many agencies to tackle these problems.
A quick summary of what Ritson described as “the greatest scandal/s in the history of marketing (and advertising)”. Marketing because client actions were primary causal factors in their making.
Social Media – Groan, not that old chestnut. But with around two-thirds of CMOs unsure of their ROI from social and around the same percentage saying they are going to increase their social budgets, something somewhere is amiss. It seems that no matter how much evidence is put forward that social media, whilst having a role to play, is way over represented in the money and resources put into it, it is ignored. (The main industry publications have also played their part who, according to Ritson, have devoted around 48% of their editorial coverage in the past 12 months to social media). Yet, two separate large sample quantitative studies have come up with the same result – two-thirds of Australians do not follow any brands on social media. There is a large and increasing choice of mediums/conduits to the consumer. But the effectiveness of each is determined by more than just the number of people who use it, which is a primary rationale for social. The landline at its peak, had billions of users, yet after 100 plus years all it had given us is telemarketing. (Google The Rossiter/Percy Grid. An old colleague, Professor Rossiter, developed a grid based on involvement and price. Though developed 30 or so years ago, it will identify products that would gain the most (and the least) from social media).
Digital Marketing/Advertising/Media – all through the nineties, convergence was the buzz word. But the proliferation of media options has resulted in divergence. Consumers slip seamlessly between online (digital) and traditional media (which is digital). Yet our industry has created a divide between the two.
Online Versus Traditional Media – Google and Facebook have done a tremendous job of denigrating traditional media, whilst simultaneously talking up their own efficacy. Again, the industry media have lent a helping hand. Not only has social received far more coverage than its impact deserves, the vast majority of articles about traditional media are negative – last century, no longer effective and so on. The days of 3 commercial networks and channels are over. But mainstream still draws numbers online options can only dream about. And the increase in the number of digital channels has resulted in more precise targeting, with reduced overlap. Search is highly effective, no argument. But display?
These criticisms are of course generalisations, with many agencies and individuals utilising the advantages presented by new media and technology and developing integrated communications that positively impact consumers at every touch point. Customer experience, for example, is a specialty that agencies should and do now specialise in. In retail, brand image is determined by POS experience. Highly effective initiatives which result in increased sales traffic can result in brand image degradation if that experience is bad.
Banks provide a case study in what not to do. Like lemmings, the majors have been following each other in telling customers they put them first – they are not about money, they are about people. Then The Reserve Bank cuts the cash interest rate and bugger all of this is passed on to the customers they care about. Within 24 hours, tens of millions of dollars in communications has not only been rendered useless, it has worked against them – a classic example of shooting yourself in the foot, or the head.
I am sure many in the industry could see the dangers in these “people first, money second” campaigns. But we no longer have the direct access to the top level decision makers. We are left to deal with mid-level executives.
The late Neil Lawrence was one of the last of the era whose standing and influence was such that he worked and reported directly the top. His effectiveness was not diluted by having to report to a chain to the real decision makers. And in doing so he gave great credibility to our industry and demonstrated what we can achieve for clients (be they private, public or politicians).
Today, CEOs are more likely to be surrounded by accountants, lawyers and investment bankers. (Who have now become competitors).
We need to win back the broad trust and credibility that advertising/communications once had.
They were the days when CEOs and boards recognised that we made the money, the rest basically counted it.
Next: Competition
