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Friday, October 26, 2007

Learning From AdAge

Last year, I was leafing through Ad Age. Four stories grabbed me. There was enough content for me to pontificate on for a whole year. Beside the stories they told, the articles also revealed interesting themes. They all support the idea that our industry is in transition, and that ad agencies, PR agencies, marketing consulting firms and clients need a new way of thinking. I still think these ideas are very relevant today; Let me share with you some of what I wrote.

  • Nike CEO William Perez (former CEO of SC Johnson) was fired after only thirteen months on the job. The headline read: "The CEO forgot: Ads Rule at Nike." The subhead explained:"...behind the scenes: Perez viewed ads as expense, and it cost him his job."
Here's my translation of this event...culture is everything. Perez failed to understand that ads had built the aura and the brand which Nike stands for. Phil Knight was not about to allow someone to play with his passion. This wasn't about money savings or efficiencies: At Nike it's about "doing it". Perez underestimated both the nature of the Nike culture and its power when he made his cost-cutting moves. At Nike, management is a team sport, and consensus, buy-in and enrollment are imperative if change is to happen.

The Second Story...

  • "Ford Motor Company engaged the consulting firm Accenture to conduct a far reaching media optimization and media measurement program that could greatly influence its ad launches, spending and media mix. The program could potentially affect the type of work Ford's agencies do." (As it happens, I used to be the Director of Worldwide Marketing at Anderson Consulting, Accenture's predecessor).
I can see it now...Ford's ad agency staffers at Y&R, JWT and Ogilvy are probably panicking, running through their hallways shouting, "That isn't fair...we should be doing that work!" The fact is, they are right. Perhaps the ad agencies should get the work. But there's a good reason why they didn't. They just don't provide the same rigor and the same process methodology that a consulting firm does. Agencies should be asking themselves why they aren't getting opportunities like this. WPP's CEO, Martin Sorrell's nightmare, of agencies losing ground to consulting firms, is coming true and picking up momentum. I think it can only get worse for the agencies--unless they rethink what they do, what type of talent they hire and where they add value beyond creating advertising.

Now for the next story...

  • "Jim Heekin, newly installed CEO of Grey Advertising, is dismantling Grey's old systems. He's installing critical account planning to be on par with creative and account management. This represents a marked change for Grey." Good for Jim! The article goes on to tell us how Grey's strategy had little clarity, how they would often waste the time of creative teams hunting for a creative strategy insight. Guess who paid for that wasted time?
I have always endorsed the idea that creatives should be focused on creative ideas not on the message or the strategy. Creatives just don't have the training for that; after all, they are art directors, writers and designers, not strategists, analysts or researchers. McDonald's calls it a "Framework for Freedom." They say, let the client management, researchers, and strategists come up with the key messages, target audiences and buyer motivators. Then let the creative teams get on with their job-creating the design, sound and motion around the idea. That way the creative output is more focused and compelling.

I would go one step further. I say that the agency should take the leadership role. Agencies need to become facilitators, working side by side with the client's management, marketing and sales teams, together with the ad agency's team of media, account management, creative, planning and production departments. Everyone should be collaborating, all together at one time at one table. This saves time, ensures buy-in and produces better ideas.

Nice going Jim. Keep stirring up the pot...change in the ad agency world is good. One caveat, one piece of advice...move the culture along with you...don't let it bite you in the rear the way it did Bill Perez at Nike. Win over the clients, and win over the internal agency staff. If you don't believe me just look what happened to your counterpart Ann Fudge at sister WPP agency Young & Rubicam. Internal politics, a strong insular culture, fear of change and being an agency outsider prevented her from being successful in the job.

  • The last piece..."Ford is putting the consumer at the center of their rebirthing marketing program with hopes of turning around the company fortunes." Ford had no choice, we're told, but to change to meet the demands of the market rather than the other way around.
This is news? Where have they been for the last twenty years? The Ford Motor Company I knew and worked for from 1981-1991 (when I was a senior ad executive at Y&R) always put the customer first. It was about Quality is Job #1; Lincoln - What a Luxury Car Should Be; and Have You Driven a Ford Lately?Those were consumer insight campaigns. They answered consumer questions and they helped satisfy the buyers' needs and wants with products that they wanted to drive. Remember the Mark VI, the XR4Ti Merkur from Germany and the Mercury Sable and Ford Escort? Wonderful cars, terrific insights and great market successes. I'm glad to hear Ford is finding its way back to the insights that contributed to its most recent glory days. But, as the company has said, Ford must also win over its own people in order to lead the market. Ford's employees need to become educated, motivated, inspired, and enrolled to recognize what the pursuit of a consumer driven strategy can yield in the way of success and market leadership. I hope they get it straight. I want them to succeed.

So what's the common thread to these stories?? What key messages can we learn from them? I see many lessons here.

Sharing Strategic Marketing Responsibilities. The ad industry (and some clients) still doesn't recognize that marketing should not be centered just on the creative product. Focus should be the shared collective responsibility of the client, the agency, the sales channel and the customers. Together they can create products, marketing strategies and award winning advertising that will meet the needs and wants of the market and present the right message and image. No one group should abdicate its role to the other. This work needs to be done together.

Rigor, Process and Methodology. In a world of investment bankers, strategy consultants, and greater value accountability to shareholders, agencies have to step up to the plate and incorporate new rigor, methodology and process into their planning and accept their responsibility for results. The old way just doesn't work, and neither will moaning about the loss of consulting assignments and revenue. Agencies must go way beyond planning the new ad campaign and refashion themselves to gain deep analytical understanding of their client's business operations and challenges. They need to get themselves invited to the board room table out of respect for their strategic insights and counsel and the confidence they convey, not just to get approval for their new ad campaign.

Culture. Everyone involved in marketing has to recognize the power of culture and the power of the employees when it comes to embracing a new strategy or marketing initiative. Company culture does matter. Respect it, and make it work in your favor by helping the internal constituencies become educated and informed. Help them become motivated and inspired and--eventually--enrolled and engaged. This will take time, patience and process, and the knowledge to do it right. Don't leave this important task to chance. Deploy change management experts who have methodologies and processes that can help.

Abundant Mentality. Marketing people on both sides of the table need to embrace the notion that a great idea can come from anywhere. What's more, when everyone adds to an idea, it can only get better, brighter, more compelling. Every great idea is a shared responsibility based on an abundant mentality about solving consumer problems with compelling solutions that grab people's imagination and attention.

Leadership. Current advertising models fashioned back in the sixties and seventies are not relevant today. The marketing industry needs fresh ideas, new approaches and leadership to recognize that. The industry needs leadership that recognizes a need for new, outside-the-box business models. Marketing people need to rethink old management structures--incorporate new media, the internet, buzz marketing and 1to1 marketing--and establish new metrics and accountabilities so clients will value what they do. Leadership should come from both the clients and their agencies, both immersed in freshness and innovation, not stuck on a single idea. Leadership needs to re-examine everything: compensation, accountability, media optimization, market research methods and integrated strategies and costs.

So. What I garnered from reading my four Ad Age articles can be summed up this way: Our business is changing. We can react and let it change us, or we can take the lead and we can change it.

What do you think?

Happy Halloween!

-Allan

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