The Plan To Disintermediate Ad Agencies (Like Get Rid Of Them).

Posted by: Bruce Nussbaum on October 3, 2007

My reporting shows that there are companies, leading companies, planning to do away with virtually all of their ad agencies and deal directly with their consumers. They say that most ad agencies are so out of it that they are wasting huge sums of money. These companies say they can hire the best story-tellers in the world themselves, better than the creatives employed by ad agencies. They say that ad agencies don’t know where their real customers are and put their ad dollars in spaces where their customers aren’t. And they say that social networking and other social technologies can now allow them to connect one on one to their customers without having to go through an intermediary. Finally, they say that online metrics are proving to be just as squirrely as network TV metrics. Faux measurement measures falsely.

I can’t say who these companies are but they are serious. And for good reasons. Check out this JWT and Adweek urvey on the jaffe juice blog. What does it show? An overwhelming percentage of people in the survey feel that products are overhyped, there’s too much advertising, companies are in the face of people too much—and—ads don’t persuade them.

Yikes! Advertising isn’t relevent, it’s irritating. Some new ad shops are racing to change things. Some old ones too. But it’s clear to me that leading-edge corporations are not waiting for them. They’re planning to cut loose from ad agencies entirely.

Now, let’s think about that. What would it mean if the top 100 global corporations bypassed ad agencies entirely?

Reader Comments

csven

October 4, 2007 12:27 AM

As I just happened to use this in a blog entry, I thought it worth linking to here:

Seth Godin's entry on "The Placebo Effect": http://sethgodin.typepad.com/seths_blog/2005/05/the_placebo_aff.html

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To answer your question: More money for product development... especially if those companies understand that the product *is* the story; not the fabrication spun to sell the product.

clearasmud

October 4, 2007 2:01 AM

Would be nice, won't it? But it won't, I bet. The death of ad agencies has been predicted a couple of times before - once recently when the ad agencies hadn't quite figured out new media yet. But they come back. Not because they change, but because corporations cannot wean themselves off of them. They never change, they just learn the new lingo and apply it to the old model - the advertising-industrial complex

Dan Warner

October 4, 2007 6:18 AM

What a question! Three years ago Al Ries and his daughter wrote "The Fall of Advertising," citing a multitude of examples on the failure of advertising to untether itself from its confining roots (as WWI-era middle-men hawking rented space in early daily newspapers).

The subtitle of the book is "And the Rise of PR." Fascinating arguments as to why advertising so often plays little role in product/brand success and why public relations, in all its guises, can be a much more robust and encompassing sphere in which to build the possibility of engaging public interest and interaction - not merely through media exposure, but fostering spaces of interaction and user authorship as well.

It is also a sphere, I suppose, where pinpoint messaging and desired meanings can become somewhat less controllable - and corporations have to be willing to embrace the fact that newfound authenticity of message or sparking the passion of interest might sometimes mean loosening up on the instinct toward a vice-grip on message control. Everyone knows good storytellers engage their audience, their potential customers, their community. The best allow them to become part of the story.

Tom Figel

October 4, 2007 9:46 PM

Dan Warner's comment is a good one. Advertising agencies and their clients always seem to be in flux with, over the decades, new fee structures, measurements, titles, methodologies, and verbiage. It's a creative activity on both sides of the relationship. What seems massed against the plan for disintermediation is the regularity with which companies change agencies in order to step away from a lack of success or to spark a marketplace result without much change in the underlying offerings. If the advertising is part and parcel of the company, the failure as well as the success will be part and parcel of the company, too.

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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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