How do companies normally buy their advertising these days? They don’t. These days, there is no “normally”. Companies no longer review their creative and media arrangements simultaneously, let alone place them with the same suppliers. Ad agencies are losing business all over the shop – to direct marketing agencies, designers … even management consultancies.
So what’s to be done? Once clients start handing brand strategy work over to the likes of Arthur Andersen, shouldn’t we just fold our tents and slink quietly into the night?
The trouble is, as more and more clients have realised, too many ad agencies still have an unhealthy obsession with advertising execution as the standard by which they should be judged. Look at the controversy over the BT campaign that won the 1996 Effectiveness Awards Grand Prix: seasoned ad people were appalled because they didn’t think the ads were very good. What as? Art?
We should listen to people like Jonathan Stead, chief executive of the below-the-line shop that snatched the #45m consumer launch of Cable & Wireless from under a shortlist of illustrious ad agency noses. He told Marketing Week: “We didn’t go in as either an ad or a direct marketing agency – we went in as an agency with a different perspective. But our heritage as a DM agency gave us a unique position in our commitment to thinking beyond advertising.”
I’ve been talking to a lot of DM people lately and it seems to me that they have a far firmer grasp of their clients’ commercial issues than a lot of agency people do. They share their clients’ imperatives: evaluating the cost of sales, reaching customers cost-effectively, putting the customer at the heart of everything they do.
What many ad agencies are selling is still too narrow. Instead of defending their entrenched positions by mocking the creative executions produced by design or DM agencies, they should be trying to widen and deepen their relationships with clients.
Over the past decade or so, most business sectors have changed out of all recognition. You’d have thought the ad industry would have been in the forefront of this process – yet we’ve been among the stragglers. How come? If a creative industry like ours can’t reinvent itself, what hope do we have of helping clients to reinvent themselves?
Let’s start with some research, and consider what clients actually want.
Above all, they want to improve shareholder value. That’s their job.
It’s what they’re judged by. Our job is to help them succeed.
Shareholder value depends ultimately on two factors: brand equity and customer equity. In order to build value, you need to build powerful brands and powerful relationships with your customers, so that they become advocates as well as purchasers.
Traditionally, ad agencies are good at building brand values over time – but not so good at understanding how to get closer to customers. We’ve left that to DM agencies. But the truth is, both are important, and both flow from the same thing: creative thinking.
Creative thinking informs and drives all the equity-building tools: advertising, DM, packaging, media planning and buying, corporate identity, sponsorship, TV programme making, PR, internal communications. These represent a continuum of creative execution. Unfortunately, the ad business has focused on execution at the expense of creative thinking. Worse still, it has focused excessively on one narrow part of the execution continuum: television commercials. And now we’re hoist by our own petard.
Part of the problem is that the ad industry is still so intent on differentiating strategy from creativity. You’re either a rational, strategic agency or a wacky, artistic, lateral one. You’re either a planner or a creative.
This is tosh. The best strategic thinking can come from “creatives” or “planners” – the idea of erecting barriers between strategic thinking and creative execution is absolutely myopic. We need both: we need creative thinking.
It’s time to stop putting people in a box labelled Creative Department as if we require everybody else not to be creative (surely the people who run the business should be at least as creative as the creatives?).
It’s time to start valuing people for what they can contribute beyond our traditional role: when it comes to building shareholder value, an effective employee communications strategy may be at least as valid as a TV commercial script.
If putting up phoney barriers has been part of our problem, bringing them down will be part of the solution. We need a new spirit of co-operation and partnership both inside and outside our agencies.
Inside agencies, creative thinking can only flourish in a collaborative culture, because it’s about experimentation. People must have enough autonomy to try new things and enough support to take the risk of failure.
Management styles in agencies should move from command and control towards coaching and mentoring.
Looking outwards, we’re now seeing far more collaboration between advertising, DM and public relations agencies to deliver the brand. Partnerships like these are better than pretending that “there’s only one solution and we’ve got it”. While big agencies have been trying to sell integration, clients have been demonstrating that it’s something they neither want nor need: inter-agency partnerships are here to stay.
So are partnerships between agencies and clients – genuine collaborations, not “we see you as partners but please don’t disturb our creatives” partnerships.
We could be working more actively with clients so that they, too, become more confident risk-takers. Maybe we should reinvest 10 per cent of our fees in taking time out with clients to challenge existing ideas and develop new ones.
Unlike the creative execution process, which has a beginning, a middle and an end, creative thinking never ends. But if you stop challenging the existing ideas, you’ve stopped thinking: you’re just processing.
Let’s start by challenging the existing ideas about what ad agencies are for. We’re constantly advising clients to be brave, to embrace change and “think outside the box”. It’s time we tried some of our own medicine.
What’s happening in the marketplace is that the old demarcations are disappearing. We shouldn’t see that as a threat. It’s our best-ever opportunity to work beyond advertising, across a far wider range of disciplines.
We can make websites, we can do DM. And we could go much further in applying our creative outlook to all kinds of business problems.
Instead of worrying about Arthur Andersen or McKinsey taking strategic work from agencies, why aren’t we taking creative work from them and bringing our creative skills to bear on the business problems they tackle? Could creative thinking improve organisational structures, industrial relations or corporate missions and values? You bet it could. When you think about it, the opportunity for us to help clients build shareholder value has never been greater.
Nigel Long is chief executive of advertising agency Partners BDDH