On August 27th, The Wall Street Journal published an article entitled, “In house agencies on rise as advertisers seek services closer to home”. I found it interesting and mildly surprising. Three MR readers coincidentally e-mailed me the link and asked that I cover the topic. Hence this post.
Over the years, In house advertising agencies did not have the greatest reputations. Generally, they were formed as a means for the parent company (the advertiser) to save money. Agency people were often their worst enemy. Clients came to believe that agency staffers were arrogant and charged too much for their services. They also flaunted their high incomes. Many is the time that I arrived with a creative or management rep at a client meeting in one of their Mercedes or Jaquars. The client would sometimes say something to me afterwards. They felt that the agency team was rubbing their affluence in their faces. Agency people also often talked of their fabulous vacations to marketing people client side who were struggling financially. It did not play well and, years later, when I ran in to former clients, it has often been a topic of conversation. So, many felt that a move inside would save a boatload of money and the work would be almost as good.
On the negative side, there was a stigma for many regarding working at an in house shop. The conventional wisdom was that there was little turnover and a true ad pro would want the fast pace of traditional agency life and enjoy pursing new business plus working on a variety of type of businesses. Many of my peers said in house was great for collateral material or grinding out coupons or Free Standing Inserts but fresh thinking had to come from the sharpies at ad agencies. If you worked on only one piece of business or category, you would get stale.
Things appear to be changing and in more ways that the splendid Wall Street Journal piece discussed.
I hunted up some people who I knew casually who worked at in house shops. A few former colleagues put me on to some others. Here are some comments from people currently working in house:
—“We went in house several years ago. It was a good decision. We move quickly (no waiting for our big shop to get a work starter wending its way through the creative department), save money, and our people know the brand. Our company is the brand. Amazingly, some agencies do not get this.”
—“Friends made fun of me when I went to a large in house shop. Well, the staff is professional and the hours are great. Sure, I work late every now and then but I only went in on two weekends last year. No new business to pitch so we focus on our assignments and are really good at time management.”
—“I am a single Mom and the benefits at my huge company dwarf that of any agency that I worked at. The health care package and 401k is so much better than my agency experience. Also, twice I was let go when my shop lost a big account. I was told that I did nothing wrong but they had to cut expenses. I do not have to worry here about what you often refer to as ‘the leaky barrel’ of agency/client relationships. It is not totally secure but better than I have ever known.”
—“The stigma of working in house is lifting. I like the better hours and benefits plus the salary is comparable to ad agency levels. We are nimble here and there are far fewer levels of review. Also, we do not suffer under an egotistical creative chief who hates ideas that were not his.”
—“Ad agencies do not get it. As a total percentage of marketing spending, advertising continues to decline here. Also, we deal directly with Google, Facebook, and lately, Amazon for our on line advertising needs. The reps are young, smart, state of the art, and, AND THEY LISTEN! I see us using a free lancer or two in a few years for theme lines or a new set of eyes but we will not need an outside agency much longer.”
—“As we move to digital, we deal with the FANGs sans Netflix. What pros!”
Agencies are not going to disappear. Yet, in an era when accountability continues to become more prominent and measurement metrics improve, the trend of a movement toward in house shops seems likely to continue.
If you would like to contact Don Cole directly, you may write to him at doncolemedia@gmail.com or leave a message on the blog.
Saturday, September 22, 2018
Monday, September 17, 2018
The Allure of New TV
Last week, many of us in the media world were surprised but pleased by the launch of a unique venture—New TV. It is the brainchild of two powerful executives—Meg Whitman, the outgoing chair of Hewlett-Packard and Jeff Katzenberg, a founder of Dreamworks and the former head of Disney’s movie studios. They raised over a billion dollars for the launch and did it very quickly with an amazing array of businesses providing seed money including Disney, NBC Universal, Alibaba, Facebook, Viacom and in the financial world, JP Morgan Chase and Goldman Sachs.
Right now, Ms. Whitman and Mr. Katzenberg are projecting a Christmas, 2019 launch. The service will provide “on the go mobile viewing” with much newly created content being about 12 minutes per episode for New TV series. You may ask why would people want to watch on their phones. Well, currently, the average person spends four hours per day on their mobile device and approximately one hour per day is with video content.
In terms of technology, they are are projecting an improvement in quality and also will be ready when the move to 5G occurs in a couple of years. When I bounced this idea off a number of people in recent days, there was a very sharp demographic divide. My contemporaries seemed to be skeptical of people watching series video on their phones although two mentioned that the new Apple phones will have larger screens. Those whom I canvassed in their 20’s were much more enthusiastic and some liked the idea of briefer episodes.
So, once again, conventional media is threatened. These two executives have a wonderful track record and are unusually well connected in both creative and financial circles. I am VERY curious to learn what they plan to charge for the service. How much will people be willing to fork out for “New TV”? Remember, many of us doubted people who be willing to pay for music but that has been proven to be totally wrong.
What do you think? I would love to hear from you.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Right now, Ms. Whitman and Mr. Katzenberg are projecting a Christmas, 2019 launch. The service will provide “on the go mobile viewing” with much newly created content being about 12 minutes per episode for New TV series. You may ask why would people want to watch on their phones. Well, currently, the average person spends four hours per day on their mobile device and approximately one hour per day is with video content.
In terms of technology, they are are projecting an improvement in quality and also will be ready when the move to 5G occurs in a couple of years. When I bounced this idea off a number of people in recent days, there was a very sharp demographic divide. My contemporaries seemed to be skeptical of people watching series video on their phones although two mentioned that the new Apple phones will have larger screens. Those whom I canvassed in their 20’s were much more enthusiastic and some liked the idea of briefer episodes.
So, once again, conventional media is threatened. These two executives have a wonderful track record and are unusually well connected in both creative and financial circles. I am VERY curious to learn what they plan to charge for the service. How much will people be willing to fork out for “New TV”? Remember, many of us doubted people who be willing to pay for music but that has been proven to be totally wrong.
What do you think? I would love to hear from you.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Monday, September 3, 2018
The Silver Bullet For Start-Ups?
Over the years, I have always watched the trajectory of start-up businesses very closely. As you all realize, most new products and most new businesses fail with businesses generally closing up shop within about three years. So, I have done some digging and asked countless people what they thought was the reason that some businesses succeeded while most did not.
The answers centered almost exclusively around five variables:
1) The Leadership or Management Team
2) The Big Idea for the business
3) The Business Model
4) How well financed the business was
5) The Timing of the Launch
Consistently, I have found that most businesses fail due to inadequate financing. Most brands of large companies fail due to poor marketing or tough competition. Finding why businesses succeeded was a great deal harder to smoke out than dissecting failures. When it came to tech, my highly limited sample came in hard on the attribute of timing. For service companies, most said the team of principals and how careful their subsequent hires made all the difference. Surprisingly, few said the basic idea for the business was a major factor. Almost to a person, they said that often a company evolved and the original idea either went away or became transformed in to something else as the business rolled out. Re the Business Model, one observer said “When a company succeeds, the analysts tout the business model. That is certainly part of the mix but I see it as secondary to the team and timing.” Others made similar comments.
What about funding? We have all heard Fred Alger's famous comment that “there is no such thing as an over-funded company.” So true. A few mentioned funding as vital if you had a somewhat rocky start but none saw it as the touchstone for brand success.
So what was the winner? To my surprise, Timing was the clear winner. More than one mentioned the Great Recession of 2008-2009. Their attitude was that no matter how good your product or service was, we were in the worst downturn since 1933 and people were afraid to spend or try something new. Unemployment soared by 250% and if you could keep you head down and also your job, you felt good. Branching out in to something new was not on the agenda during that very troubled period.
I was skeptical and then thought about it a bit. Then, watching TED talks, I found that my contacts had a strong ally. Bill Gross, the start-up maven, not the bond king, gave a brief talk entitled, “The Single Biggest Reason Startups Make It” and he came down heavily on the side of Timing as a major indicator (the You Tube link is https://www.ted.com/talks/bill_gross_the_single_biggest_reason_why_startups_succeed).
Clearly, I do not agree with all that Gross says. In the six and one half minute video, he discusses the 200+ firms that he has helped launch and discusses which attributes worked. Also, he makes a leap of faith and discusses other that he did not have a hands on relationship with personally. He may be implying a mathematical precision that really is not there as how can you really smoke out the contribution of Idea vs. Team vs. Business Model vs. Funding vs. Timing. He does make some cogent arguments, however and it is well worth a brief view. The example of Air BnB struggling at first as people did not want strangers in their homes dissipated in the Great Recession as people needed money very badly was dead on.
If one relies too much on timing, then you are saying that luck may place an outsized role in the success of a venture. Yet between the comments that I received plus the Bill Gross video, I am rethinking this question. Any opinions?
Should you wish to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.
The answers centered almost exclusively around five variables:
1) The Leadership or Management Team
2) The Big Idea for the business
3) The Business Model
4) How well financed the business was
5) The Timing of the Launch
Consistently, I have found that most businesses fail due to inadequate financing. Most brands of large companies fail due to poor marketing or tough competition. Finding why businesses succeeded was a great deal harder to smoke out than dissecting failures. When it came to tech, my highly limited sample came in hard on the attribute of timing. For service companies, most said the team of principals and how careful their subsequent hires made all the difference. Surprisingly, few said the basic idea for the business was a major factor. Almost to a person, they said that often a company evolved and the original idea either went away or became transformed in to something else as the business rolled out. Re the Business Model, one observer said “When a company succeeds, the analysts tout the business model. That is certainly part of the mix but I see it as secondary to the team and timing.” Others made similar comments.
What about funding? We have all heard Fred Alger's famous comment that “there is no such thing as an over-funded company.” So true. A few mentioned funding as vital if you had a somewhat rocky start but none saw it as the touchstone for brand success.
So what was the winner? To my surprise, Timing was the clear winner. More than one mentioned the Great Recession of 2008-2009. Their attitude was that no matter how good your product or service was, we were in the worst downturn since 1933 and people were afraid to spend or try something new. Unemployment soared by 250% and if you could keep you head down and also your job, you felt good. Branching out in to something new was not on the agenda during that very troubled period.
I was skeptical and then thought about it a bit. Then, watching TED talks, I found that my contacts had a strong ally. Bill Gross, the start-up maven, not the bond king, gave a brief talk entitled, “The Single Biggest Reason Startups Make It” and he came down heavily on the side of Timing as a major indicator (the You Tube link is https://www.ted.com/talks/bill_gross_the_single_biggest_reason_why_startups_succeed).
Clearly, I do not agree with all that Gross says. In the six and one half minute video, he discusses the 200+ firms that he has helped launch and discusses which attributes worked. Also, he makes a leap of faith and discusses other that he did not have a hands on relationship with personally. He may be implying a mathematical precision that really is not there as how can you really smoke out the contribution of Idea vs. Team vs. Business Model vs. Funding vs. Timing. He does make some cogent arguments, however and it is well worth a brief view. The example of Air BnB struggling at first as people did not want strangers in their homes dissipated in the Great Recession as people needed money very badly was dead on.
If one relies too much on timing, then you are saying that luck may place an outsized role in the success of a venture. Yet between the comments that I received plus the Bill Gross video, I am rethinking this question. Any opinions?
Should you wish to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.
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