Evolution of the Agency and the Brand

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15 Jan Evolution of the Agency and the Brand

We’ve all seen Mad Men or can imagine a variation of the show. It depicts agencies, wining and dining their clients, having the three martini lunches, and eventually revealing sexy, controversial advertising campaign concepts. Is that reality? It somewhat was and somewhat still is. But there’s much more.

The 60s and 70s…

Looking at the decades we can see a simple recap in this light. The 60’s and 70’s were all about great concepts. Broadcast media was evolved and every tagline and concept was new. Things from I [heart] New York to “Think Small” for Volkswagen’s Bug were great concepts that worked. Car companies were huge to the agency world. No one was spending more on advertising and they were the crown jewel – growing fast, spending money. In these generations, brands typically had one agency – the Agency of Record (AOR) – a prestigious title for a prestigious position.

The 80s…

… came around and the AOR model continued, but it started to shift a bit. The creative and messaging was a bit less exciting of a territory for clients. The ‘new’ and growing methods of reaching consumers were exploding, and the affluence that followed a minor recession in the 70s was immense. Consumers were spending.

What changed significantly in the marketing world was more on the agency side than the consumer side. The agencies that were made big (huge) by the automotive, tobacco, financial and consumer goods industries, were now consolidating. Acquisition of small companies continued to happen, but even large agencies were getting swallowed-up by each other or new ownership. Banks were willing to finance these deals because of two decades of phenomenal growth.

This consolidation was also happening on the client side. There were amazing deals happening with Kraft, Nabisco, Philip Morris Cos., Kodak, Pillsbury… all the great names were buying or being bought. By the close of the 1980’s the top 100 advertising brands had consolidated to 1/3 the size.

This caused issues for agencies and brands. The consolidations created conflicts of interest, everywhere. Agencies were handling accounts for competing brands. That would never work. Thus, the 80’s started the shift of the AOR model. Brands started to split their advertising budgets among several agencies – a media buying agency, a creative agency, a strategic agency, and others. The game had changed for agencies. And, candidly, agencies were scared.

The 90s…

… changed everything, once again. Baby boomers were aging, consumer marketing was shifting to target segment groups. Agencies and brands could use data and smarter channels to segment their marketing efforts and this was a must. The cost of advertising was increasing rapidly. Segmenting and specialized marketing groups were necessary. Agencies were splitting into specialty areas to meet the new demands of clients. Each claiming their big agency could manage many single service lines or segments, each as a unique focus. Specialty marketing groups popped up to service immigrant, youth, senior, women and other target market groups. Everything was being broken into pieces. Not to mention, internet commerce was exploding, and creating, yet another, segment. Agencies were more important than ever to brands, but they weren’t able to meet the demands of brands because most were too big, too slow to shift, and too stuck in the past. They missed their make money on media world. Thus, a whole new world of agencies was created. Unfortunately, the creation was to meet the demand of brands, and it didn’t necessarily meet the goals of the brands at first. The model was simply too new and too immature to have great outcomes for brands. Brands lost faith in their agencies.

By the late 1990s, brands were using a plethora of agencies, testing all sorts of new marketing techniques, addressing multiple market segments, attempting to catch up to the amount of data being captured, and doing all this on shrinking budgets. It didn’t work.

The New Millennium, 2000s…

… saw brands start to consolidate their agency selections, once again. Agencies were maturing. They were deciding their area of specialty and committing to those areas. They were servicing brands better. However, there was still a need for multiple agencies. The brands still had not fully determined how to best use the data they had been collecting, standards in digital were far from being established, and there were still even more technologies on the rise to learn about. How could a brand keep up? And, how could agencies selecting a focus area also continue to explore new areas? The shift was incredibly challenging. Social media was exploding, mobile technology was massive, app development was winning amazing adoption rates, and even the business model delivery of brands was shifting.

How consumers were buying changed throughout the first 10 years of this new century. Loyalty programs were in full swing and working, subscription models gave new pricing approaches and access to new consumer markets, shipping systems were meeting the consumer demands and continuing the shift from brick and mortar, and the consumers were smarter, better equipped shoppers, and ready to challenge the brands.

Today…

Here we are, just kicking off 2017. We are in the last few years of the second decade of the new millennium, and we’ve already seen this decade’s major factors trending. We are in a period of social commerce. The value of a person’s relationship to a brand is more important than a single transaction. Brands have witnessed the power of a single blogger, a single incident that spreads across Twitter and Facebook, and the viral (yes, I used that word) video on Instagram. A share price is influenced by an illness outbreak at Chipotle or a green movement by Starbucks, all because of social media’s reach.

What do agencies and brands need to do in order to be successful? They must partner. If brands wish to create long-term relationships with their consumers, they can’t do this in single year contract relationships with agencies. They must be hyper-strategic over multiple years.

This is a shift. It’s a change from the annual ‘magic curtain’ to one of transparency, partnership, alignment, and collaboration. It’s not a minor change.

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The “Magic Curtain”

The magic curtain is what agencies these days joke about. We didn’t realize it back then, but we were missing vital steps in a process. The magic curtain is probably the singular, consistent, poor methodology that agencies have followed for decades. Simply put, this is when select members of the agency, typically those who will not be directly doing the work, chat with the customer to “discover” what the customer needs. Then, they go back to their teams, disappearing behind the “magic curtain.” It is here the agency pulls in the do’ers, the thinkers, the creative, media guys and gals, and the techs. And, they create.

In a vacuum, armed with only the information clients gave to the few team members who performed ‘discovery’, the whole team now concepts and creates. The ‘client’ becomes the account service person who was the medium between the agency and the brand. This is not good. What happens is the ‘new client,’ the internal account service person, becomes an interpreter, predictor, and frankly guesser of what the real brand wants and needs.

After the magic is created behind the curtain, the agency brings a team back to the client to present their brilliance. Clients may get excited by pretty creative, cute taglines, and, perhaps, even good strategy. The agency may have done a decent job. In some cases, the agency nails exactly what the client does need, whether the agency or the client knows it or not.

Then comes the execution. It’s not just about a single blackboard with a cool hand-sketched ad concept with some mock type on the sheet. It’s not about all the ‘generalized’ conversations that have taken place. It’s about the execution in all its glorious details.

Marketing channels are so diverse and powerful today that there’s much more to any advertising campaign execution than the concept. Where are the media placements being made? How tight do we know our target audience and buying personas of those various, unique individuals? Does the digital technology team know how to build supporting web assets? What are the specific call-to-action pieces? Does the campaign drive traffic to a brick and mortar store or an online store?

All these details have been missing from this process. It started in a generalized fashion and ended with a “looks good, now let’s go” execution. Success is unlikely. This is causing brands and agencies to change their ways.

The dynamic duo of agency and brand has returned to a partnership relationship. There is nothing so powerful as working collaboratively across teams. Good agencies and smart brands have realized this. Sure, agencies still need great creative, writing, strategy, and definitely technology, but without a solid plan, an aligned effort and focus, and a team of talent, brands will never reach the success they seek.

Agencies who still go behind the magic curtain will not thrive. More important, brands that accept this behavior will struggle. When you rip down the magic curtain some pretty amazing things happen. And, they happen faster, smarter, and more thoroughly than ever before.

Brand-Agency Teaming

Here’s a brief insight into what happens when you pull down the magic curtain and engage the full agency team including members of creative, digital, strategy, media planning, social, etc. and full brand teams including executive level, marketing, customer service, sales, etc.

One Team – Imagine walking into a room where there’s one team working together, comprised of the smartest people on the company’s brands, products, markets, long range goals, and as part of that team, experts on how to get those products and services to market, increase sales, and drive long-term brand equity?

Strategy – It’s probably not surprising that while many brands think they have a strategy, it is un-communicated, un-documented, and lacking details for short-term and long-term execution. A brand-agency team develops that strategy to be better, stronger and more impactful than ever before. These strategies have teams thinking about what has to happen immediately, and how to perform today with best positioning for tomorrow’s next step.

Faster Execution – With both teams fully on the same page, armed with the big picture and the details, execution happens quickly. There are fewer revisions to work, reduced missteps in direction, and better communication among all team members. Everyone hits the mark quicker and more on target.

Talent Excels – The ability for talent in all areas to shine is much greater on a highly functioning team. Team members constantly challenge each other to be better, think creatively, and to reach a higher level of achievement. All members become better. Creatives are more creative in the right direction. Strategists are more strategic across multiple channels. And so on. Exploring new technologies, new market approaches, new concepts are all able to happen with strong teams.

Leadership Alignment – Having the executive and leadership teams part of the process from the start means their core strategic objectives are known and understood. Thus, the marketing teams perform better for the executive group. Once again, this improves the rate of execution, hitting the target earlier, and with greater impact. Leadership is executing across many areas of the brand and corporate structure, and thus need to know alignment is saturated.

Maximized Budget – It’s only logical that with a stronger collaborative team, fewer project revisions, reduced misdirection, and deeper talent applied to all marketing efforts, the budget goes further and yields more. Dollars are spent more intelligently, in the right areas, and with greater certainty of outcomes.

Right Results – Finally, there are the results. These are much more widespread than numbers on a sheet. With absolute certainty, the results as marketers and sales teams know them are improved. The quantitative measurement of marketing and sales efforts show positive results – follows, Likes, conversions, purchases, loyalty measurement, client satisfaction referrals, all areas. Equally important are the subjective results. A happier team increases performance and improves retention of team members and institutional knowledge for an even greater tomorrow.

From an agency owner who loves to collaborate with brands, “go tear down that magic curtain and get together with your agency.”

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