Jul 12 2008
It’s The Ideas That Count
Every now and then the fog lifts and things that were previously unintelligible and unrecognizable come clearly into view. This week I had one of those moments of clarity while reading, of all things, Advertising Age.
My “aha” moment was prompted by some Ad Age commentaries on the role that advertising/marketing/communications agencies and/or firms play in today’s global and inter-connected business environment. More importantly, what they need to do to thrive in a world where media, culture and technology are changing drastically and rapidly. (The number of “slashes” I had to use to describe these marketing services providers is indicative of the strategic and identity challenges they face in gaining and maintaining relevance and influence in the new business realm.)
What exactly was the Ad Age content that prompted my epiphany this week? It was actually two articles in AA’s online “CMO Strategy” section. The first piece titled “The Agency Model is Bent but Not Broken,”is by an ad industry consultant named Stephen Fajen. The second piece by Deutsch CEO Linda Sawyer is titled, “We’re Back to Where We Started, Right? Wrong.” The Fajen article assets that massive changes in the agency business in recent years (largely driven by the financial objectives of the big agency holding groups) have created a situation where no one is happy — not the agencies who feel they are not getting adequately compensated and respected by clients, and the marketers who expect short terms results for less money paid to their agency partners. The result is even more frequent reviews by clients unhappy with the performance of their agencies.
The Sawyer article focuses on the relatively recent split between creative and media in the agency world. Both she and Fajen agree (although Fajen is more emphatic about the point) that this split was not strategic nor client driven. It was very financial driven — e.g., those big agency holding companies again trying to generate greater profits by creating separate media buying/planning behemoths. Sawyer argues effectively that in an increasingly digital media world, the split between creative and media no longer makes sense. In fact, media today is just as much about creativity as creative is about your media choices. She calls for a new kind of media/creative combination, not the old model where media was the second or third class citizen in the agency hierarchy. In the “old days,” media was just another silo within a non-integrated marketing services organization.
You are probably now wondering what my epiphany was. Well, I actually already stated it in the title of this post: “It’s the Ideas, Stupid!”
Ideas are the epiphany, because ideas are what drive marketing, the agency business and the ultimate success of the marketers themselves (the clients). Ideas — and the ability of agencies to implement them effectively and impactfully – are the coin of the realm in marketing. But, too often we let all of the sturm and drang of the agency business cloud that essential fact.
Great, fresh, new, exciting ideas are the foundation of breakthrough marketing that delivers big business results. And, those ideas are also what make successful agencies.
The real point that both Sawyer and Fajen missed in their otherwise excellent commentaries, is that the best way to create a successful agency model for the future — and foster healthier, more productive client/agency relationships — is to focus everything around the idea. Once you have that big idea (the strategy), use it to drive the choice of media, channel, creative and execution.
What I just outlined is the definition of integrated marketing. However, too few in our industry seem to understand that, even today when the term integrated marketing has become quite trendy in marketing circles. I have been preaching the gospel of integrated marketing for quite a few years now, and built my agency THUNDER FACTORY on the concept. To this day, though, industry insiders and pundits still seem to bypass integrated marketing as they search for the holy grail of the new agency ”model.”
The old marketing/communication agency paradigm was the opposite of integrated marketing. It was built on silos that emphasized certain media (ad agencies principally focused on TV, radio and print, direct firms used mail) and channels (PR emphasized getting reporters to write about their clients, sales promotion firms worked in-store, and interactive agencies operated online). This silo’ed approach may have worked in a world of three broadcast networks and newspapers that people actually read daily, but it started to unravel quickly once technologies like cable, the web, mobile and video games exploded and vastly expanded the ways for people to get information, communicate, be entertained, conduct business, etc.
Integrated marketing is just another term for Idea-Driven Marketing, hence the name of this blog!
Clients want and need great ideas, ideas that differentiate and create excitment, value and demand. If marketing and communications services firms can create, deliver and implement those ideas, they will get compensated fairly for them. Of course, agencies should start demanding fair compensation for the ideas they bring to their clients every day. Other professional services entities (law firms, consulting firms, technology integrators) are not shy about charging big money for their thinking and ideas. Marketing agencies tend to just give ideas away, hoping to make money on the execution, which too often is devalued or under-valued by the clients (or derided when the results don’t match their short-term expectations).
A couple of years ago, Ad Age published the results of a national McKinsey study of CEO of major corporations and their chief marketing officers (or VPs of marketing). I was not surprised by the results. The CEOs wanted their CMOs and their agencies to focus on “business development” — that is to say, building the business. These business leaders felt their marketing departments were more focused on the “sexy” part of the marketing discipline, including communications, design, etc., rather than really driving the business.
Ultimately, the CEOs were looking for ideas to build the business, not just campaigns, or media strategies or clever creative.
Lately, CMOs have responded to this expectations gap with their CEOs by obsessively focusing on ROI and metrics, typically with a very short term horizon (probably because the average job tenure of a CMO today is only about 14 months, according to many published reports). Metrics and a bottom-line focus are certainly important, and will win some points with the CEO and the CFO. But, they don’t ultimately build and grow business value. Great marketing ideas do that. Just ask Steve Jobs.
If you’re looking for a new marketing agency model, it is right in front of you: Integrated Marketing. The integrated marketing approach is centered on the power of ideas. Agencies should embrace that model and have the courage of their convictions to charge a fair compensation for creating and consistently delivering business-building ideas. And clients/marketers should remember that those big ideas are what create the new iPhones and Prius’s of the world. As such, it would be nice if they were more willing to pay their agency partners commensurately for the ideas that ensure their growth and success.
Now that would be a moment of clarity for all of us.
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Interesting post, Patrick. I have never been on the service side of the agency relationship. My experience is from the client perspective so I can give my two cents. Certainly, integrated marketing makes sense as a concept and organizing principle. However, one area where this model can fall down is “organization information”. Simply put, agencies just don’t have the same access to information as people who work day to day in the company. And the smaller the organization the greater the potential for a gap in information between client and agency, as the cycle of information is faster. I”m not sure how this dynamic is solved but I think the information flow is as much the responsibility of the client as it is of the agency. Recognition of this fact at the beginning of an agency relationship is critical.
Also, my experience as a client is good ideas are never in short supply (perhaps I’m kidding myself on this point but I do think that’s true). The problem I have faced in my career is the cycle of measurement (CMO tenure is now 14 months!). The short term focus on measurement leads to abbreviated strategies and tactics which have little chance of success. Solid strategic thinking, by design, should not be revisited frequently. Vision statements should be enduring, perhaps for the lifetime of a company. Positioning statements should have life spans of 5-10 years–or more. Strategies that support both are multi-year efforts. Building companies takes time, dedication, and persistence. It’s hitting that nail with the hammer over, and over, and over. It may seem dull or antiquated but it works. Communications plans that support client objectives should be no different.
Best,
SM
Thanks, Scott. Totally agree with you on the importance of the information flow, and that so much of it must come from the client. In these fast moving times, not sure a strategic positioning can last as long as you suggest, but that certainly is the ideal (Nike’s positioning around “authentic sports performance” has endured for 20 years, which is why Nike is by far the global leader in its category.
Your comments that short term focus on measuremnt does not help business success are music to my ears! I wish more CMO’s felt that way! Unfortunately, they don’t. I have been in too many situations where CMOs (and CEOs, too) expect you to deliver in two months the kind of results it took major brands like Nike years(and millions of dollars in marketing) to achieve.
Short term”itis” is killing marketing today and the sooner companies realized that, the sooner they will get back on track to success. Apple’s success did not happen over night. Far from it.