This post is part Three of our series on the future of advertising agencies.
I spoke to both creatives and media people about the future. The comments will be mixed together a bit on purpose.
Creative Director, Mid-Sized Shop—“Over the last decade, both me and my team had a newfound respect for the media folks at our agency. As digital grew, some of our younger people were bursting with ideas and I keep shutting them down and said you can’t do that. After a while they made a beeline to the media team and would ask if they could execute their idea online or in mobile. Sometimes they could and let me know how out of it I was (am). Other times, the media supervisor would say 'no but you could do this which is close to what you want and may work better.' It took me a while but I got the message. Media was no longer the group that got tickets for clients or the boss. They were pros who were engaged in the industry changes. For a while, we had them in to meetings at the early stage of development that we never did before. It was a nice environment.”
Founder, Mid-Sized Shop—“In recent years, I have been monitoring the growth of Integrated Marketing Communications (IMC). It is not just a new term to toss around. IMC is the blending of Advertising, Direct Marketing, Consumer Promotion, Internet, Public Relations, Publicity and Personal Selling. Don, you have told me directly that a big challenge for marketers will be to determine the proper mix of IMC pillars going forward and each company will be different. I refused to accept your suggestion but now see that you were right. Advertising, due to the advertising avoidance that you discuss a lot, is on a downward spiral. Increasingly, it will take up a smaller portion of the marketing dollar pie. So, the role of creative will be diminished in my view. As Amazon and others grow and hit people directly, their ROI has to be much higher than conventional advertising. My creative director shakes her head in anger when I bring the topic up. It will not happen overnight but it will occur.”
Media Director (with new wave title) at Mid-Sized Shop—“For several years, we pretended we were up to speed on digital. We had some success but eventually our largest client got wise and shifted to programmatic buying with a major player. Their results are light years ahead of ours. We could not compete and conventional media works for us against older demographics but not against the under 40 set. We have had a nice run. I see no way out of it for us.”
Creative Chief, Small Shop—“I am glad that I am getting old. Advertising’s role has to diminish going forward. The Big Data boys at Amazon, Alphabet, Alibaba, Facebook and a few others can reach people with the right message at the right price. It has been great fun but we are in the bottom of the 7th.”
CEO, Small Shop—“Don, I do not dispute what you and others have been saying about the future. The big issue to me is how do we keep the creative and media teams motivated over the next five to seven years. My game plan is to morph in to a consulting firm but the smart ones will have to see what is going on.”
Media Director, Small Shop—“I have a woman on staff who is what you once described as a ‘bust your chops’ negotiator. She is a legend in our small DMA and lives the business. She still gets her pound of flesh (and then some :) ) but her best deals no longer work very well. She is in her late 40’s and refreshingly honest. Last week, she asked me what could she do for the next 20 years? She knows the game is about up. What do I say to her?”
More to come. If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Thursday, March 29, 2018
Saturday, March 24, 2018
Advertising Agencies 2028--Part II
This post is Part II in the MR series on the future of Advertising Agencies. It covers interviews with marketers of all sizes from Fortune 500 marketing directors, to franchisees of major chains, to small to mid-sized retailers. I hesitate to post this entry as I love ad agencies but none of my sources wanted me to pull THEIR punches.
Here goes:
Fortune 500 Marketing Director—“As you know, I am getting old and have a lot behind me. I remember vividly how, when our agency visited us for a major presentation, it was a big deal. We leaned on them for thinking not just with creative and media execution but also for packaging, new product development and even site location. The agencies that I have dealt with over the last decade have not kept pace with changes. We turned over a lot of our needs directly to Alphabet (Google). Their reps are on top of everything and their analytics are top drawer and keep getting better. The agency that we still have talks of “breakthrough creative ideas” as if it were the 1980’s. We do less and less with them every year. Past agencies did wonderful white papers on the future and had an attack plan for us. These guys are 100% reactive but have zero seminal thinking. It is a shame. In their defense, they can no longer afford the all-stars but they simply do not dig in and learn our business or study the changing environment closely enough. We give them less each year and will likely shift to a boutique or two and perhaps keep the media buying service which they recommended to us.”
Mid-sized company marketing chief (privately held)—“The agency does not take our threats seriously and their younger staffers are rude. Here is a great story: The grandson of our founder, who leaves us alone but still owns 15% of the company heard that we had a new agency and wanted to meet the team. He fashions himself a private investor and dabbles in deals and is a fair sized player in local philanthropy. He is a true gentleman and sometimes we bring him in for special sessions or dinners with new accounts. He showed up for the meeting with the new shop and said he had a brief history of the company to share with us and the new ad guys. It was wonderful and charming. Perhaps 12 power-point slides plus one 30 second commercial. He showed old print ads, the theme line we used for decades and we, at the company, were enthralled. After about 10 minutes a sniveling little pissant from the agency said, “We are pressed for time. Could you just give us the headlines?” I was never so angry. My CEO slammed me back in my chair and told our large shareholder and friend to continue, please. The younger members of the agency team shifted uncomfortably and within two minutes were texting. Something is wrong, really wrong. These kids have no manners and no desire to learn who we are or where we came from. Our largest shareholder was hurt and it was needless. We hung on to the new shop for a few months and then fired them. Now we use free lancers for creative and lean on the big players for digital work.”
Big Franchisee of major player--“We analyze our sales data very carefully. Our agency keeps asking to take over our sales data. We said no. Finally, their young account supervisor (after two double scotches) told us they needed our proprietary data so they could build their own model to use for other clients and new business. We hired a couple of quantitative nerds who are just what we need. I was appalled at what the agency was up to. Our targeted promotions get better and better results and we do not use conventional media much anymore.”
Small Retailer (under 10 stores)—“My son forced me to hire some young men and women to monitor our on line work. What a great investment! We are not slaves to the Pareto principle (80-20 rule) any more. Our whiz kids have found niche markets for us. There are 3% of our clients who are about 12% of our sales. Amazing. We buy specific sites programmatically and our profits keep inching up. Our agency could never do this for us. I mentioned this to the agency CEO and he said I was missing the boat. I smiled. Actually, the train has left the station and this well-intentioned man does not realize that the business has passed him by.”
Mid-Cap Company (Publicly Traded)—“Agencies do not realize that we need them for very little these days. They say that they have a fierce on line team but we go direct now and save big and get better and infinitely faster results.”
Mid Sized Company Marketer—“I am a bit like you, Don. I try to read everything. My account team never reads the articles that I send to them. I found a great article in WIRED and sent it to the team. At the next session, I asked them for their opinion. The room got quiet. The young lady who is the account supervisor said, “ I am verbal person. Could you tell me about it? I said no. I left copies for everyone and came back a half hour later. Okay, I said. Let’s discuss this. Two said they had been on the phone with other clients and one said she was on line reading what the Kardashians were doing. One person had read it and made notes and we went back and forth a while. Two starting texting after a moment or two. When I called their boss he basically said they were the best he could find. Well, I am determined to find better. The lack of manners and lack of professionalism is astounding.”
Fortune 500 COO—“You know that I worked at two agencies for more than a decade. These guys keep telling me their team is the best. The best at what? I see very little that impresses me. To me and my senior team, the communications world is moving toward mobile. How do you communicate in such an environment? How do you bring out a new product? Can an upstart break through with little money? Agencies could provide some answers or at least strong opinions. We are hiring internally and getting real pros”.
40 year marketer, brash, real character—“Don, what cliche do you want me to trot out? Put a fork in agencies, they are done. Watch as they rearrange the deck chairs on the Titanic. Gone! Kaput! Seriously, it is hard to deal with the rapid changes but few have done a good job of it. I love advertising but these guys have dropped the ball in the end-zone (whoops! Another cliche!)”
More to come in a few days.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Here goes:
Fortune 500 Marketing Director—“As you know, I am getting old and have a lot behind me. I remember vividly how, when our agency visited us for a major presentation, it was a big deal. We leaned on them for thinking not just with creative and media execution but also for packaging, new product development and even site location. The agencies that I have dealt with over the last decade have not kept pace with changes. We turned over a lot of our needs directly to Alphabet (Google). Their reps are on top of everything and their analytics are top drawer and keep getting better. The agency that we still have talks of “breakthrough creative ideas” as if it were the 1980’s. We do less and less with them every year. Past agencies did wonderful white papers on the future and had an attack plan for us. These guys are 100% reactive but have zero seminal thinking. It is a shame. In their defense, they can no longer afford the all-stars but they simply do not dig in and learn our business or study the changing environment closely enough. We give them less each year and will likely shift to a boutique or two and perhaps keep the media buying service which they recommended to us.”
Mid-sized company marketing chief (privately held)—“The agency does not take our threats seriously and their younger staffers are rude. Here is a great story: The grandson of our founder, who leaves us alone but still owns 15% of the company heard that we had a new agency and wanted to meet the team. He fashions himself a private investor and dabbles in deals and is a fair sized player in local philanthropy. He is a true gentleman and sometimes we bring him in for special sessions or dinners with new accounts. He showed up for the meeting with the new shop and said he had a brief history of the company to share with us and the new ad guys. It was wonderful and charming. Perhaps 12 power-point slides plus one 30 second commercial. He showed old print ads, the theme line we used for decades and we, at the company, were enthralled. After about 10 minutes a sniveling little pissant from the agency said, “We are pressed for time. Could you just give us the headlines?” I was never so angry. My CEO slammed me back in my chair and told our large shareholder and friend to continue, please. The younger members of the agency team shifted uncomfortably and within two minutes were texting. Something is wrong, really wrong. These kids have no manners and no desire to learn who we are or where we came from. Our largest shareholder was hurt and it was needless. We hung on to the new shop for a few months and then fired them. Now we use free lancers for creative and lean on the big players for digital work.”
Big Franchisee of major player--“We analyze our sales data very carefully. Our agency keeps asking to take over our sales data. We said no. Finally, their young account supervisor (after two double scotches) told us they needed our proprietary data so they could build their own model to use for other clients and new business. We hired a couple of quantitative nerds who are just what we need. I was appalled at what the agency was up to. Our targeted promotions get better and better results and we do not use conventional media much anymore.”
Small Retailer (under 10 stores)—“My son forced me to hire some young men and women to monitor our on line work. What a great investment! We are not slaves to the Pareto principle (80-20 rule) any more. Our whiz kids have found niche markets for us. There are 3% of our clients who are about 12% of our sales. Amazing. We buy specific sites programmatically and our profits keep inching up. Our agency could never do this for us. I mentioned this to the agency CEO and he said I was missing the boat. I smiled. Actually, the train has left the station and this well-intentioned man does not realize that the business has passed him by.”
Mid-Cap Company (Publicly Traded)—“Agencies do not realize that we need them for very little these days. They say that they have a fierce on line team but we go direct now and save big and get better and infinitely faster results.”
Mid Sized Company Marketer—“I am a bit like you, Don. I try to read everything. My account team never reads the articles that I send to them. I found a great article in WIRED and sent it to the team. At the next session, I asked them for their opinion. The room got quiet. The young lady who is the account supervisor said, “ I am verbal person. Could you tell me about it? I said no. I left copies for everyone and came back a half hour later. Okay, I said. Let’s discuss this. Two said they had been on the phone with other clients and one said she was on line reading what the Kardashians were doing. One person had read it and made notes and we went back and forth a while. Two starting texting after a moment or two. When I called their boss he basically said they were the best he could find. Well, I am determined to find better. The lack of manners and lack of professionalism is astounding.”
Fortune 500 COO—“You know that I worked at two agencies for more than a decade. These guys keep telling me their team is the best. The best at what? I see very little that impresses me. To me and my senior team, the communications world is moving toward mobile. How do you communicate in such an environment? How do you bring out a new product? Can an upstart break through with little money? Agencies could provide some answers or at least strong opinions. We are hiring internally and getting real pros”.
40 year marketer, brash, real character—“Don, what cliche do you want me to trot out? Put a fork in agencies, they are done. Watch as they rearrange the deck chairs on the Titanic. Gone! Kaput! Seriously, it is hard to deal with the rapid changes but few have done a good job of it. I love advertising but these guys have dropped the ball in the end-zone (whoops! Another cliche!)”
More to come in a few days.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Tuesday, March 20, 2018
Advertising Agencies 2028--Part I
A few months ago, I was asked by two people to put up a post on the future of advertising agencies. I sent out feelers to dozens of people ranging from former agency CEO’s, current agency owners, creative talent, media directors (among other titles), Fortune 500 marketers, mid sized retailers, experienced media reps and a few media researchers. The response was rather large and I was contacted by some people whom I did not know but were eager to weigh in on the issue. So, I have sifted through a great deal of material and will time release the responses over the course of a few posts.
It has often been said that perspective requires distance. One does not read a book by rubbing it up against one’s eyes. So, I went to two old pros who have run ad agencies of various sizes outside of New York. Both maintain a lively interest regarding what is going on at agencies and in the media world. Here are their comments on advertising agencies in 2028:
Executive #1—Don by 2028… Advertising agencies will be technology specialists… Media will be mostly programmatic computer buying… Research and marketing will be done by clients in-house exclusively… Clients will handle their own social media… There will still be a need for creative work… But that will be conceptual… Execution will be handled by production companies or in-house. There won’t be near as many big agencies . Smaller agencies might proliferate and serve the needs of those clients who are too small or too young to have their own in-house capabilities. But as soon as a client gets enough scale… Everything possible comes in-house. The agencies that remain will be primarily project based… That that is not too far away from today
Executive #2—What’s next?
The world always wants to know what’s next. People make a lot of money trying to forecast and more often than not get it wrong.
Sometimes the future will be more of the same but with a very slight spin.
2028 marketing will be the same. On two fronts:
• Faster and cheaper
• Artificial Intelligence.
The smart marketers will use the evolving devices that allow them to ‘speak’ to their customers one on one.
A smart marketer knows a product has a better chance when the benefits a customer wants are presented face to face. Me talking to you is the ideal way to make a sale.
Every day new methods evolve.
The advertising future is all the devices we have now will continue to seek the one on one connection.
Every year it gets easier and the current constant is; the techniques used in TV and radio production work. They are simply miniaturized.
Advertisers need to work on smaller, shorter and quicker. It’s not the medium it’s the technique.
The newest entry in tomorrow’s advertising communication is how fast consumers accept the fact that the selling face is not human.
AI .. Artificial intelligence is fast over taking the need for human contact but no one knows – yet – how fast the real humans will accept it.
In the next 10 years the messages will shift from exclusively selling to a balance of selling and proof of good citizenship.
Advertiser will spend large amounts trying to prove they are human and work with humans giving time and money to humans.
The future is better more targeted messaging and faster response. It’s trite but true: instant gratification takes to long.
The behemoth agencies are working to shrink while maintaining the illusion of size. Small agencies need to do the work the big guys can’t.
Quicker, smarter, cheaper.
TV is not dying. Radio is not dying. Magazines and direct mail are not dying. What is happening is they are evolving to even better one on one messengers.
Shifting gears, here are responses from a few current agency chiefs:
Mid-Sized agency owner—"everyone wants to talk about technology changes and they are very real. To a certain degree, we can deal with them or at least for the moment. The larger problem to me is the caliber of people whom we attract. Some 40 years ago when I entered the game, advertising often was a magnet for the best and the brightest. No more. We cannot afford to pay for the best anymore. They are all scooped up by the big companies, especially the FAANGS. If I have someone who is motivated and has a great future, they leave after 18 months or so. I cannot grow our business fast enough to keep them and they are wasted here, to be honest. Also, and this is harsh, the people I do hire often have no class. If they go to dinner with a client without me, they get drunk. One guy was hitting on women who worked client side. He told me that I had no right to interfere with his personal life. I let him know that when he walked in to a client’s office, he represented ME. He quit soon after that —good riddance.”
"Also, there is little interest among many about what is going on in the business outside of our offices. Last year, on the first day, I outlined things for a young trainee. I told him that I would get him a free subscription to ADVERTISING AGE. He laughed and said, “Save your money, boss. I will never read it.” Can you imagine? Obviously, he did not last long but, sadly, he was not the worst of our recent crop of bad hires.”
Small agency principal (15-20 employees)—“Our base for decades has been local retailers, car dealers and banks. Amazon and the general retail apocalypse is killing some Main Street businesses that we have had for two generations. My car dealers tell me that in 10 years they will be largely service operations with people buying direct in many cases. And the banks. Cash cows for agencies for 100 years. Now, they are disappearing as the money center banks or super-regionals gobble them up. I know our days are numbered. Last year, I ramped up my matching contribution to our 401k plan. My CFO said I was crazy but I know we do not have many more years. Some people have been with me for more than 20 years. They have not saved much and they will not have pensions. In two years, I may take some of my personal money and sweeten the 401k even more. These people made me rich and I want to help them as best I can. It has been a fun ride but the game is almost over.”
Agency owner (approximately 30 employees)—“our people do not know how to behave. When the client is talking many are on their devices and chattering among themselves. One of our senior people got defensive when a young intern at a large non-profit asked him an excellent technical question about an online effort we were doing. Our management rep asked her where she went to school. “I go to RISD (Rhode Island School of Design)”, she said. “Never heard of it”, my associate said. I jumped in and said it was probably one of the three best design schools in the U.S. He kept pushing her and she maintained her poise and cool but continued to probe. It turns out that she was the granddaughter of the founder of the non-profit and will be joining the board in a few years and may likely run it someday. We lost the business and deserved to lose it. She can bring in a team that will work cheaper and be far more cutting edge than us regarding new technologies.”
“My team does not read. I sent out articles and ask them to read them a few days before staff meetings. Some never do. They smile and say that they did not have time. Our business is in trouble. If I fire all these lightweights, I am not sure that I can upgrade the team quickly. It is so frustrating.”
Much more to come. Expect Part II in about 72 hours.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
It has often been said that perspective requires distance. One does not read a book by rubbing it up against one’s eyes. So, I went to two old pros who have run ad agencies of various sizes outside of New York. Both maintain a lively interest regarding what is going on at agencies and in the media world. Here are their comments on advertising agencies in 2028:
Executive #1—Don by 2028… Advertising agencies will be technology specialists… Media will be mostly programmatic computer buying… Research and marketing will be done by clients in-house exclusively… Clients will handle their own social media… There will still be a need for creative work… But that will be conceptual… Execution will be handled by production companies or in-house. There won’t be near as many big agencies . Smaller agencies might proliferate and serve the needs of those clients who are too small or too young to have their own in-house capabilities. But as soon as a client gets enough scale… Everything possible comes in-house. The agencies that remain will be primarily project based… That that is not too far away from today
Executive #2—What’s next?
The world always wants to know what’s next. People make a lot of money trying to forecast and more often than not get it wrong.
Sometimes the future will be more of the same but with a very slight spin.
2028 marketing will be the same. On two fronts:
• Faster and cheaper
• Artificial Intelligence.
The smart marketers will use the evolving devices that allow them to ‘speak’ to their customers one on one.
A smart marketer knows a product has a better chance when the benefits a customer wants are presented face to face. Me talking to you is the ideal way to make a sale.
Every day new methods evolve.
The advertising future is all the devices we have now will continue to seek the one on one connection.
Every year it gets easier and the current constant is; the techniques used in TV and radio production work. They are simply miniaturized.
Advertisers need to work on smaller, shorter and quicker. It’s not the medium it’s the technique.
The newest entry in tomorrow’s advertising communication is how fast consumers accept the fact that the selling face is not human.
AI .. Artificial intelligence is fast over taking the need for human contact but no one knows – yet – how fast the real humans will accept it.
In the next 10 years the messages will shift from exclusively selling to a balance of selling and proof of good citizenship.
Advertiser will spend large amounts trying to prove they are human and work with humans giving time and money to humans.
The future is better more targeted messaging and faster response. It’s trite but true: instant gratification takes to long.
The behemoth agencies are working to shrink while maintaining the illusion of size. Small agencies need to do the work the big guys can’t.
Quicker, smarter, cheaper.
TV is not dying. Radio is not dying. Magazines and direct mail are not dying. What is happening is they are evolving to even better one on one messengers.
Shifting gears, here are responses from a few current agency chiefs:
Mid-Sized agency owner—"everyone wants to talk about technology changes and they are very real. To a certain degree, we can deal with them or at least for the moment. The larger problem to me is the caliber of people whom we attract. Some 40 years ago when I entered the game, advertising often was a magnet for the best and the brightest. No more. We cannot afford to pay for the best anymore. They are all scooped up by the big companies, especially the FAANGS. If I have someone who is motivated and has a great future, they leave after 18 months or so. I cannot grow our business fast enough to keep them and they are wasted here, to be honest. Also, and this is harsh, the people I do hire often have no class. If they go to dinner with a client without me, they get drunk. One guy was hitting on women who worked client side. He told me that I had no right to interfere with his personal life. I let him know that when he walked in to a client’s office, he represented ME. He quit soon after that —good riddance.”
"Also, there is little interest among many about what is going on in the business outside of our offices. Last year, on the first day, I outlined things for a young trainee. I told him that I would get him a free subscription to ADVERTISING AGE. He laughed and said, “Save your money, boss. I will never read it.” Can you imagine? Obviously, he did not last long but, sadly, he was not the worst of our recent crop of bad hires.”
Small agency principal (15-20 employees)—“Our base for decades has been local retailers, car dealers and banks. Amazon and the general retail apocalypse is killing some Main Street businesses that we have had for two generations. My car dealers tell me that in 10 years they will be largely service operations with people buying direct in many cases. And the banks. Cash cows for agencies for 100 years. Now, they are disappearing as the money center banks or super-regionals gobble them up. I know our days are numbered. Last year, I ramped up my matching contribution to our 401k plan. My CFO said I was crazy but I know we do not have many more years. Some people have been with me for more than 20 years. They have not saved much and they will not have pensions. In two years, I may take some of my personal money and sweeten the 401k even more. These people made me rich and I want to help them as best I can. It has been a fun ride but the game is almost over.”
Agency owner (approximately 30 employees)—“our people do not know how to behave. When the client is talking many are on their devices and chattering among themselves. One of our senior people got defensive when a young intern at a large non-profit asked him an excellent technical question about an online effort we were doing. Our management rep asked her where she went to school. “I go to RISD (Rhode Island School of Design)”, she said. “Never heard of it”, my associate said. I jumped in and said it was probably one of the three best design schools in the U.S. He kept pushing her and she maintained her poise and cool but continued to probe. It turns out that she was the granddaughter of the founder of the non-profit and will be joining the board in a few years and may likely run it someday. We lost the business and deserved to lose it. She can bring in a team that will work cheaper and be far more cutting edge than us regarding new technologies.”
“My team does not read. I sent out articles and ask them to read them a few days before staff meetings. Some never do. They smile and say that they did not have time. Our business is in trouble. If I fire all these lightweights, I am not sure that I can upgrade the team quickly. It is so frustrating.”
Much more to come. Expect Part II in about 72 hours.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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