Are Big Ad Agencies So Clueless That Corporations Should Avoid Them?

Posted by: Bruce Nussbaum on July 26, 2007

I’ve been spending much time with ad agencies and focus groups lately and can only conclude that—with some exceptions—they are mostly clueless. Three years ago they had a traditional knowledge about consumers but didn’t know much about social networking and web 2.0 technology. Today, most of them don’t know about consumers and don’t know much about social networking and web 2.0 technology either. Mainstream ad agencies have one refrain—one message to their corporate clients—do social networking, do social networking, do social networking.

David Armano and I have been yakking about this all day on his blog as he explains why creators of social media are enjoying growing power. Check out the thread of comments on his post.

My take on this is the following: The 20 and 30-year olds in the agencies are sending their corporate clients to online spaces that they and their friends play in—MySpace, Second Life, you know the list. Or they are telling their clients to create social media that attracts their friends. Same thing.

The middle aged folks in the agencies are sending their corporate clients to the social media spaces that their teenage and 20-year old children spend time in. Some social networking spaces. Same thing.

Bottom line here is that many big ad agencies are making a huge mistake. They are pushing their corporate clients to chase technology, not their consumers. And if there is anything we know about the world we live in today, you must be one with your customers because your customers demand to be participants in your product/service/experience/brand. For example, sending big b2b companies who sell to 45-year-old men and women to FaceBook or Second Life is just nutty.

Our last issue of Inside Innovation has this great chart on the INdata page showing that different demographic groups participate in vastly different ways across the spectrum of social media. And they are constantly moving through it as they age, change careers, have families, etc. You just can’t send everyone to “social networking sites.” Companies and their ad agencies have to identify their consumers and locate their communities. Then they have to understand the culture and rules of these communities because differ dramatically.

We have two major forces at work today—globalization and social networking. Both have to do with community, connection and conversation. Globalization opens up a whole new panoply of consumers in their own communities with their own cultures. Web 2.0 is doing the same—it is growing new communties with their own cultures. THESE ARE WHERE CONSUMERS LIVE! And they want to actively participate in the products and services that make up their lives. That’s the new stuff.

But traditional ad agencies still don’t get it. You can’t just

send every client to the same five social media sites or have them create five similar kinds of social networking vehicles. What you have to do is get to know their customer culture.

That's why Continuum, IDEO, ZIBA and other design/innovation consultancies and being drawn into the brand business (IDEO just opened in New York, the land of the brand). With their deep roots in design tools and methodologies that are ethnographic and anthropological, they have a different way of connecting to the consumer. These design/innovation consultancies know how to observe and understand customer cultures--they have dozens and dozens of anthropolgists and social psychologists working for them. They can get to the magic of "unment" needs better than focus groups and marketing research which cannot.

What ad agencies need to learn is how to do this. They have to connect their clients to their customers, not the latest technology. And if they do their job right, they might even discover, heaven help us, that some of them belong in print. Because that is where most 40 and 50 year old managers in the US, Europe and Asia spend their time. Still.

And when ad agencies do put their clients in the social media space, or create new ones, it's got to be where their customers reside, not where their friends or kids communicate.

To be frank, I thought everyone kind of knew this by now. CEOs and top managers really have to get control of the ad budgets and make sure they are consumer-focussed, not tech-centric.

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Reader Comments

David Armano

July 26, 2007 08:37 PM

Bruce,

Great post. One key missing ingredient to this is that much of what you are referring to from the design world is supposed to be handled by "planners" in the Advertising world. Planners are the folks that uncover deep rooted customer insights which then fuel the strategies, solutions and executions that an agency provides.

Only one problem. Not all planners come at it the same way. Some come at it from the traditional "big brand" focus group school. Others from a more quantitative/data school. Some are very charismatic—even more so than their "creative counterparts" and others work quietly behind the scenes.

I am with you on your hypothesis that Ad agencies need more of the "deep dive" type planing that falls somewhere between ethnography and design thinking.

BTW, you should know that this is a HUGE discussion point for folks at digital agencies who approach things a bit differently as we grew up designing experiences vs. creating messages.

Nevertheless it's a big topic and no one has it figured out yet (talk to 100 agency folks and you get 100 POV's on what an insight actually is)

As I shared with you, this slideshow offered up by Design Continuum starts to put the pieces of the puzzle together for me...

http://www.dcontinuum.com/content/show.php?id=9

Good post. Now when are you going to write about how designers and ethnographers need to become better storytellers. I think the bridge between design + marketing may end up being "synthesis". The art and science of distilling insights and data into something actionable.

PS, had fun "Yakking" today. Let's call it "Journalism 2.0". :)

Bruce Nussbaum

July 26, 2007 08:50 PM

David,
Story-telling is the No. 1 topic of the design/innovation community. The "narrative" is all they talk about. And they're pretty good at it too. They can do a "consumer journey" as good as any "creative" person at an ad agency.
Just look at what Yves Behar does at fuseprojects. He's all about telling the brand story through the consumer experience of the product/packaging. Sohrab Vossoughi at Ziba and Tim Brown at IDEO and Gianfranco Zaccai at Continuum--they all talk about storytelling.
It's funny--academia has tons of research on the narrative, what it is, how to teach it. Is anyone plugging into that?
Bruce

Valeria Maltoni

July 26, 2007 08:51 PM

Bruce:

As I explained over at Logic+Emotion, there are a few enlightened people inside corporations who are now doing some heavy lifting on educating both sides -- the agency and the management team.

I tend to hire smaller and specialized agencies vs. large, full service ones for this very reason. It's hard for me to justify paying top dollars to educate them ;-)

And to David's point, I am a synthesizer. Although I deal in words and languages more than design I have provided design direction on experience where none was provided by the agency.

Valeria Maltoni

July 26, 2007 08:54 PM

Storytelling: my friend Gerry Lantz runs a company called Stories that Work. I have a conversation with him at my blog on the sidebar -- http://www.conversationagent.com/2007/05/brand_stories_t.html

He's been delving into story for several years after a successful career on the client side at Ferrero and on the agency side at Ogilvy & Mather.

Randy Lawrence

July 26, 2007 09:12 PM

As a partner in a small agency firm that has promoted itself as "telling the client's story" for that past 5 years, I can tell you that the biggest push back we get is, "that's not what my competitor is doing." There are few companies that are self-aware enough to be able to strike out in a new direction, and most of them are headed by individuals who embody that confidence. Find those individuals, and you will find someone who wants their story told, and understands how it will impact their business goals.

David Armano

July 26, 2007 09:46 PM

Yes Bruce, the "design thinking" folks understand the power of a good story. I don't see it as much in the graphic design and user experience areas. Sometimes I feel those two fields—as much as I relate to them, have their own vernacular which is difficult to follow if you come from the outside.

But a well told story transcends these types of boundries—which is probably why you see the blurring of roles. Points in case, marketing firm AKQA designing the XBOX UI or Frog Design creating a marketing initiative for GE health and most recently R/GA's development of the Nike+ app.

B.L. Ochman

July 26, 2007 10:03 PM

You are so right about how agencies are not keeping up with new media.

Unfortunately, many designers also are clueless about usability, search optimization, creating community.

It's well worth seeking out the smaller agencies with actual successful experience in social media instead of the more visible pundits who have theories instead of experience.

B.L. Ochman

July 26, 2007 10:09 PM

You are so right about how agencies are not keeping up with new media.

Unfortunately, many designers also are clueless about usability, search optimization, creating community.

It's well worth seeking out the smaller agencies with actual successful experience in social media instead of the more visible pundits who have theories instead of experience.

Crawford

July 27, 2007 12:44 PM

Brand stories are not written in a vacuum and delivered. They are dynamic stories, co-authored over time by brand owner and brand user. More akin to a wiki than a powerpoint. If one doesn't listen to the other, one gets screwed. Or, as master brand builder Bugs Bunny said,

...be vewy, vewy quiet. We ah hunting wabbits!

Roldano De Persio

July 27, 2007 01:44 PM

Thank you for this great post!
I agree with David Armano, it is important to tell story. Don't sell! Tell ;-)
I think that the future is content, I mean something like these BMW commercial:
http://it.youtube.com/watch?v=k-cbiYzlHOk

http://it.youtube.com/watch?v=8ZN6vhiYnZA

Here in Italy you can buy shirts, trousers, wallets, shoes, glasses all made by Mercedes. Why not movies?

Shauna Axton

July 27, 2007 06:33 PM

As a 20-something planner in a boutique (but full-service) agency, it is my role to uncover consumer insights and drive strategy and execution as David mentions. Certainly this is a role that is approached differently by every agency, but there ARE agencies out there that are constantly seeking to stimulate deeper connections and stronger dialogue with consumers in all media (including web 2.0 and social networking).

I haven't done the big agency thing so I can't speak to their thinking or methodologies. But I don't think it's fair to imply that ad agencies are behaving in a vacuum and ignoring both consumers and the new ways of engaging with them.

At Mortar, we are always seeking inspiration and ideas not only to uncover insight into the values and motivations of our client's target audiences, but also to pinpoint the most effective ways of inserting our client's story in a way that's meaningful to them.

This inspiration comes from all places - the IDEO method cards sitting on my desk, blogs including both Bruce's and David's, observing behavior around us, and engaging in discussion with people from all walks of life. I have been involved with the IDSA, temped at a design firm, and approach every experience as an opportunity for connection.

Yes, we are a small agency and your post is not targeted towards small agencies. But we are also not a specialized agency. We do traditional media, new media, web 2.0, social media, PR and brand identity and strategy. We aren't above admitting that as an agency, we always have more to learn and new ways to grow. But we're certainly not sending all of our clients to Facebook and Myspace, and we DO listen to the consumer.

Irene Pereyra

July 27, 2007 07:23 PM

Hi Bruce,

Great post, this is something all of us in advertising and design are currently struggling with because for so long we have relied on "creating hypes" (telling people what is that they should want) rather than just listening to what it is people might actually need.

To top it off, most design and ad firms are still working in the "old" way where it's all smoke and mirrors (charisma and buzz words) and very little actual understanding of the consumer or user...

It's something I've been talking about for a while on my blog, you should take a look at one of the conversation as it relates to all this from a designer/advertising point of view:
http://designaxiom.blogspot.com/2007/06/pitfalls-of-multiple-touch-points.html

Tangerine Toad

July 27, 2007 07:46 PM

Bruce: One of my readers pointed me to this article (I write a somewhat popular advertising blog) He thought I'd enjoy it because I've been preaching the exact same thing: the inability of the 20 and 30something Web 2.0 "evangelists" to understand that they are a unique subset of society, that most people live in family units and that "Social Media Is Only Social If You're Alone" (e.g. if you're playing ball with your kids, you're clearly not busy Twittering or updating your friends over on Facebook.)
The failure to recognize this, combined with the somewhat absurd notion that people want to actually interface with brands in these spaces (I call it "Your Brand Is Not My Friend™") is what's opening the door to the consultancies you reference. (And David, I'm not buying for a minute that the "digital" agencies approach this any differently than the traditional ones. If anything, you guys are the worst offenders.)

Gerry Lantz

July 27, 2007 10:30 PM

Bruce, nice post. I thank Valeria for the mention of STORIES THAT WORK, INC. Your comments to David are spot on and ended with a question: "Is anybody tapping into narrative studies in academia?" A little but not much that I can see. I noticed Penn State is offering a course on story and business; and there is a consultant through Univ. of Penn who works with business using story. But I do not think there is widespread acceptance or reaching out to narrative experts. Most who are practicing story consultants are org. dev. people who use it as a a powerful tool. Otherwise, I don't see business seeking out academia for guidance on narrtive.

As an ex-English and film major who spent his life in major agencies and marketing, bringing stories to business was a natural evolution for me. But it's a tough sell.

If anything, story is still seen as a "soft" skill in business and not tied to hard results. But there is hope. The development of Appreciative Inquiry, an org. dev. tool, is based on positive stories. Consumer marketers know how important story is to branding. I get a lot of work in branding using narrative techniques.

When I work with clients, it is hard for them to see how "story" can be a solution to a business problem they face--they can see that it applies to branding and even to leadership. What is not so obvious is how story applies to selling (customer stories about your company are essential--yet many companies don't know them). Stories are critical to strategy development, which excites me the most because by using story to answer "where do we go?" and "how do we get there?", strategy development becomes collaborative in a rich way that shares ownership, commitment, action, and results. And stories finally are at the heart of corporate culture--there are tons of articles and books on this already. I believe stories can help leaders define themselves and direction, build collaborative strategy, and evolve or create a culture that supports what has to happen.

As far as social media goes: GM and the Chevrolet Tahoe learned the hard way not to let consumers express themselves about the SUV. Don't ask for stories if you don't want to listen. The results are still on YouTube.

Lisa McNeill

July 30, 2007 12:51 PM

Great summary on a topic that I feel will begin to emerge. Companies are spending a lot of money venturing into social media - money that will be wasted if they don't begin to focus on their consumer.

http://www.ignitesocialmedia.com/second-life-where-marketing-strategy-goes-to-die/

This link is to an article that discusses how Second Life is one of those areas that may be an attractive venue rather than a targeted medium.

David Armano

July 30, 2007 02:32 PM

"And David, I'm not buying for a minute that the "digital" agencies approach this any differently than the traditional ones. If anything, you guys are the worst offenders."

@ Tangerine Toad, having worked at both firms with roots in direct marketing vs. firms with roots in design (specifically Web/interactive design) I can tell you there is a difference in approach, execution and culture. Neither is perfect—both can learn from each other, but there is a difference. Just as their is a difference between agency and client side—which I have been on as well.

Tangerine Toad

July 30, 2007 05:16 PM

@David: With all due respect, we're discussing different types of agencies. My experience has been with large traditional agencies, their "web-only" companion shops as well as the big digital ad agencies.

All of whom share a tendency to jump after the next bright shiny object.

I can't speak to that tier of direct marketing and web design shops, so I will defer to your experience there.

Charlie Brewer

July 30, 2007 06:08 PM

This article is right on the money.

Big ad agencies still seem to be focused on crafting outward-bound brand messages. So are most big corporate clients.

Only a few digital interactive agencies and leaders understand that UX discovery and design methodologies--things like workflow analysis, ethnographic research techniques and character immersion--are actually techniques for driving business innovation. IDEO et. al. get it and more power to them, I say.

Usability is great...it's a must-do. The big agencies can talk that talk as part of their patter.

But the idea of usability *research*--finding the overlooked tool, service, feature or "hook" that consumers actually find useful and valuable--well, that's the secret sauce in today's best design.

David, I don't know what you were able to do when we were back at Agency.com (back in the day!), but I always considered it a huge win if we were able to find even a little "secret sauce" for our clients as part of our process.

Keep fighting the good fight!

Dave

July 30, 2007 07:33 PM

I agree with the spirit of this, but should point out that it has never been an account planners job to define the best way to speak to a consumer (in terms of the best "experience") so much as how the brand should be communicated to consumers (the "expression"). As such account planners have always been ill-equipped to define the brand experience. One of the key issues is that media expertise has been taken away from big agencies and centralized in to sprawling media planning/ buying shops).
If you have spent time at a big agency and observed the behavior you describe, then so be it. Most "big" agencies are making huge strides to address this issue - back in 1999 or 2000 this "big agencies don't get it" rhetoric is outdated, and many bloggers (soi-disant "new marketing" experts) are fighting a battle that doesn't exist: everyone s trying to get smarter about this.

Karen Hegmann

July 30, 2007 07:52 PM

Great post Bruce. I think what scares me more is the number of advertising and design agencies who CLAIM to be experts in online branding and marketing, yet fail to get their message across on their company website. What they're missing is an understanding of basic usability principles. If they preach it, they certainly don't practice it. I don't know how many times I have been on websites for ad agencies, only to give up and click out because a) the amount of Flash used on the homepage was simply overwhelming b) the site copy was impossible to read against a black background c) the site didn't tell me what the company really DID.
Gerry and Valeria have it right in that companies have to learn how to tell stories more effectively in order to increase their business (or keep the clients they already have). One key benefit to the realm of new media is the ability to express ideas through narrative, and the companies that do this successfully will be on their way to creating truly powerful brands.

Tangerine Toad

July 31, 2007 09:07 AM

@Karen: I could not agree more and recently did a whole post on this: http://tangerinetoad.blogspot.com/2007/07/physician-heal-thyself.html

It's mostly that agencies don't anticipate how consumers are using their web sites (ususally to find out their phone number or address) and use the site as a way to show off their expertise with flash, and tell the user what they want to say, rather than what the user wants to know.

Rob Morris

August 2, 2007 11:09 PM

Bruce,

Great discussion, but I believe you've really misconstrued the issue.

I do work for a big Ad Agency and have solid experience with pure-play interactive agencies as well. If "big Ad agencies" are sending their corporate clients to social networking spaces simply to be there, they're making a big mistake and won't be in business long. In my experience, clients are not interested in this approach, but are looking for real insight into consumer behavior, especially as that behavior manifests online.

Social networking sites are the result of a new social context that has emerged with the prevalence of Web 2.0 technology. Their popularity is due to people's desire to share a common interest and participate in a collective dialog. Sending clients to Facebook or My Space is not sending them to the latest technology. These are NOT technologies. These web destinations are using Web 2.0 technology to capitalize on a fundamental human need to socialize and connect to the world at large. In these specific cases, the communities have been built by like-minded individuals who have self-selected each other, and that is exactly why the communities are so strong, and why we in the AD business need to pay attention!

I agree that it's all about connecting clients to their consumers as you aptly point out. But there's no better way to do that today than using Web 2.0 technology - social media, social networks, user-generated-content, blogs, wikis etc. All of these practices open up new arenas for our clients in idea generation, concept testing, product development and most importantly marketing communications and consumer experiences.

So it's not the online destinations but the online behavior that matters. There is a new social context in which individuals operate and this is crucial to understanding how marketing messages are spread and consequently how we advertise. If my clients are selling body spray, I may well suggest a strategy that leverages Facebook or MySpace. What better way to open a dialog with my consumers? But be careful, Forrester reports that 39% of Windows Live Spaces and 38% of MySpace users are 35+.

Recognize that today's consumer expects transparency, honesty and dialog. At last check, print is not an effective medium for dialog. Afterall, your article and my response occurred online!

Alex Wipf

August 9, 2007 09:55 PM

I agree with almost everything you said. Except, I would extend the space of "big traditional agencies" not getting it to "a lot of digital agencies" not getting it either. When clients come to you wanting an SL idea or with the question "what can we do with facebook", digital agencies also have a tendency to give in to the hype.

Nishad

August 11, 2007 05:16 PM

Bruce

Big agencies have been whipped around a bit last few years. But let me ask you, who in client marketing departments understand the power of Web 2.0 and such? Even if there are few of us in agencies who understand the new customer, there are even fewer marketing people who are on the same wavelength.

The whole notion of giving up control is so alien to most marketing departments that collaboration and co-creation is a long way away from taking root in the world of marketing.

So, yes big agencies have a long way to go. So have those who are calling the shots in marketing departments.

steven brezina

September 8, 2007 08:49 PM

Some very valid points here...i think a lot of the corporate efforts behind putting up an SL presence have been seriously misappropriated. Why would the people in the SL community want to dress their avatars in khakis and polos?

We are starting to see some abandonment of corporate efforts into SL now because of exactly what has been discussed here - many of these corporations just never should have been there in the first place.

I also Agree with Alex W. - i think bigger corporations are often coming to digital agencies because some executive has read an article in businessweek or a similar venue and they don't truly understand what these communities are about: they just see the number of participants.

What should be happenening is that when this type of request comes in to a digital shop "what can we do with facebook?" - the digital agency should take the responsibility to pose a question back to the client - which is "what is the story you are trying to tell?" - and once this is established the agency can help the client utilize web 2.0 venues to tell it. Some "stories" don't belong in facebook or SL or myspace.

Rachel Clarke

September 23, 2007 06:28 PM

Great piece and rings so true. When I was client side, I spent a period of time when every single agency pitching was telling me a I needed to blog or to podcast, or both. Now we have social networks (don't forget the 'I want a viral' crowd either).

Are the tools useful? Yes, no doubt they are, but they need to be used properly - for many they are most useful for longer term strategic work rather than campaign based stuff which is what a lot of agencies focus on.

bruce nussbaum

September 23, 2007 08:39 PM

Rachel,
Thanks for the post. Finding a client's customers in whatever medium they play and work in is the key--not chasing technology and the latest social media site. Fact is, lots of b2b business clients still spend most of their time in print, not even digital media. This is true is much of US industry and very true overseas in India, China and much of Europe.
Like your behindthebuzz blog too.
Bruce

Rich

July 26, 2008 11:28 PM

Agree with most of the above. As a media professional that has been around the block at a handful of very creative (and not so creative) agencies, I've seen exactly what you are talking about - a myopic approach to so-called "new media". I get the sense that a majority of planners out there approach social media with the same nonchalant attitude as their weekly recycling - yes it's important, but do they really understand the implications of participation? Thanks for the great insight.

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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