Goodbye Brand, Direct and Digital…Hello People to People Marketing!

October 8, 2009

 

 

person to person 2

 

Marketing communication has evolved from the early one-way media (TV, print, radio) to two-way media (Internet) and now multi-way media (social, mobile). As the lines between these channels and media are blurring so quickly, it has created an identity crisis among many agencies.

Can a direct marketing agency be effective without digital and social media skills? Can a digital agency deliver the best work without direct marketing skills? Is social media just another word for PR, or is it in fact the ultimate one to one medium?

Traditional marketing and advertising thinking is no longer effective as consumer media habits continue to evolve.  Branding is for all intents and purposes dead, as most consumers’ first impressions of a brand are what they find in search results or what they read from other people in reviews. As consumers circumvent traditional media approaches, they are gravitating towards those media/channels that provide easy access to information, advice and recommendations, plus allow them to socialize and be entertained at the same time. In the process, these consumers are building and refining their own trusted personal networks.

The opportunity for agencies and marketers alike is clear. Forget about continuing to structure your organization in silos like brand, direct, digital and social marketing, and start to think about People2People marketing. If you can integrate your marketing efforts and succeed in motivating customers not only to interact with you, but to share their personal networks with you, you will have created a powerful channel for your brand in the marketplace.

Those of you who are direct marketers will be disappointed to hear that targeting is dying too. As consumers change to pulling information as they want or need it, push marketing becomes less and less relevant no matter how “targeted” the marketer thinks it is. No longer can you just drop an email to your house file or run a banner campaign with the simple objective to sell more products or generate more leads. You have to become part of the conversation, where they are and when they want to have it. Also, keep in mind that conversations cannot be bought either, and if they are the community often quickly finds out and retaliates.

The new age of People2People agencies have to be experts in understanding consumer habits and expectations in this new media environment. They need to be the unbiased filter that prioritizes the media/channels and indentifies the ones that will yield the greatest ROI.

This new breed of agency will avoid the temptation to shout messages at consumers disrespectfully or target thousands of people multiple times (reach and frequency). Instead, they will embrace techniques that cultivate genuine and open dialogue with customers, where brands quietly listen and learn, and then respond with new features and product innovations that better match the needs of the consumer.

These agencies will be rewarded by clients who not only out perform their competitors, but also deliver industry leading financial results. You may be interested to know that in July 2009, a report by social platform provider Wetpaint and analyst firm Altimeter found that: “Companies deeply engaged in seven or more social channels (blogs, branded social websites, Facebook, Wikis, ratings and reviews etc.) significantly surpassed their peers in terms of both revenue and performance.

Future growth and success will be led by those agencies that embrace this new media environment and choose to become part of a new breed of People2People agencies. Those who remain siloed will continue to become less relevant over time and unable to deliver against evolving client expectations.

 

 

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New Media Predictions That May Scare the Life Out Of Most Ad Agencies

September 29, 2009

Predictions

As we look toward the future, in almost every case new media’s operating revenues, when discounted for inflation, will never equal those that used to be generated by traditional media!

Vin Crosbie has been described as “The Practical Futurist” by Folio, the trade journal of the American Magazine Industry. The founder of Digital Deliverance LLC, and an adjunct professor at Syracuse University, he has over 31 years of media experience, 16 of which being in digital media.

Mr. Crosbie recently wrote a column for ClickZ in which he makes three new media predictions. These predictions are probably enough to scare the life out of most ad agency professionals and at very least will give them plenty to think about. Especially as they relate to the current ad agency business model and the revenue streams that support them. Here they are:

New media revenues won’t equal past traditional media revenues:  In almost all cases (excluding certain exceptions like Google), when discounted for inflation, new media operating revenues will never equal those that used to be generated by traditional media. A significant issue as consumers switch media consumption from traditional to new media.

Why? – Firstly, the economics of new media are based on surplus whereas those of traditional media were based on scarcity. Second, the internet tends more often than not, to eliminate the middle man (agencies plus media buying and planning companies). Advertisers can now go direct. Add to that the huge increase in consumer generated content and you have a new media system that is far more efficient than the old.

Newspapers and magazines can’t keep up:  Mr. Crosbie maintains that it is nearly too late for almost all daily newspapers and most news magazines. To survive, they should have made the necessary changes to their business models and infrastructures 5-10 years ago, in order to adapt to the new media. They did not because at that time the consumer’s hadn’t yet switched media consumption from print to online. They were profitable and such changes may not have paid out for 3-5 years or more.

US radio and TV will implode: The 80 year old affiliate structure of America’s radio and television industries is about to implode due to broadband new media. Why should a network continue to split commercial advertising time with local affiliates when it will be able to deliver programs directly to viewers’ TV sets? He predicts that there will be a bloodbath in the US television industry in the coming decade now that broadband is making the traditional model obsolete.

Sobering thoughts for an industry that was built upon media commissions earned through the role they played as intermediary. Sobering from a new media perspective too.

 

 

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How Ad Agencies Can Help CMO’s Succeed.

September 9, 2009

CMO innovation

With an average tenure of only 17 months, CMO’s need all the help they can get, not only to succeed but to survive. There has never been a better opportunity for ad agencies to step up and take on the role of strategic partner!

There is not a CMO out there right now who has not already cut his overhead costs as deep as realistically possible. For the past 18 months or more, their game plan has been batten down the hatches and unload as much overhead as possible, as they try to survive the economic recession.

Well, the game is changing and changing quickly. The C-Suite is already shifting its focus from cost cutting to recovering market share and top-line growth. This shift is starting to put increased pressure on these CMO’s as the corporation looks to them for growth leadership.

To be successful they must be able to understand both current and potential customers better than anyone else. The next critical step is to take those insights and translate them into unique and powerful new products and customer experiences. Finally, and perhaps most importantly, they must create more effective and efficient ways to market their products or services. Communications innovation is absolutely critical to achieve success and who better to provide that innovation leadership than the right ad agency?

While breakthrough product innovation is a fundamental requirement and remains an essential component of every company’s go to market strategy, there are many communications innovations that are equally as powerful and effective.  It could be as simple as innovating the customer experience, discovering new customer segments or needs, innovative pricing or new payment options or leveraging networking and building a brand following and community.  

The opportunities are out there and the time is now! Whether you are the incumbent agency or one that is looking for an opportunity to break into that new client, there has never been a better time than now. However, a quick word of caution.  Do not go rushing in without doing your homework and armed only with traditional marketing ideas and solutions. To succeed you will need to demonstrate exceptional insights, creativity and media/channel delivery innovation.

This is your opportunity to establish your rightful place as a valued strategic partner. Focus your approach on how you can help the CMO recover top-line growth and avoid the temptation to deliver another one of those presentations about how talented your agency is. Remember Radio WIFM (What’s in it for me?).

 

 

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Naked Brits Lead Current Ad Agency Communications Planning Trend

August 26, 2009

british_invasion

The days of brand agencies aspiring to be the “Lead Agency” are fast disappearing. Clients are increasingly turning to specialist communications planning agencies, to help them take a more informed approach to their integrated marketing initiatives. In many instances, the work of these truly media neutral agencies informs and directs all other roster agency assignments and work.

In the US we experienced the “British Invasion” from a music perspective during 1964-66, with bands like The Beatles, Rolling Stones and The Kinks. Right now we are experiencing another British Invasion of a different sort: Brand Communications Planning agencies.

These agencies do no creative work or execution whatsoever. Some have developed very powerful planning tools/models, powered by a significant database of both quantitative and qualitative data, related to over 90 distinct marketing channels. They are channel planning experts and are probably the only breed of agencies who can honestly claim to be media neutral.  

One of the leaders of this invasion is a company called Naked Communications. A quick word of warning, do not go to Naked.com after reading this post. It will only help to put you on the radar screen of your IT and HR department for improper use of the internet. (They have two distinct websites: www.nakedcomms.com and www.houseofnaked.com). There are a number of others out there that all hale from the UK and have similarly bizarre names.

While most other agencies are out there running around claiming to be full service, fully integrated, media neutral and 360 degree agencies, specialist communications planning agencies, like Naked, are quietly and effectively taking control of more and more large advertising and marketing accounts. Early in 2008 Naked made the trade media headlines when they were awarded the Kimberley-Clark account. Take a look at what K-C said about the appointment in their press statement.

Tony Palmer, CMO at K-C, said in a statement that producing marketing efforts built around TV commercials is no longer relevant in today’s business environment. “It is incumbent on clients to take an active role in reshaping the model,” he said, adding that hiring Naked is a step in this direction. Naked’s role is to help K-C and its agency partners identify the best communications channels it can leverage, to execute specific brand programs.

Agencies like Naked usually do not replace the client’s lineup of creative and media buying agencies. Instead, Naked works like a consulting firm, advising on how to best use the roster agencies. This may cut into the revenue of traditional agencies. Kimberly-Clark, for example, did not increase its ad agency budget in order to pay for Naked’s services. Instead, the company “reallocated the spending” according to Hedy Lukas, Vice President for Integrated Marketing at Kimberly-Clark.

Not long after Naked’s appointment came the announcement from Kimberley Clark that it had decided to move a quarter of its spending into non-traditional media.

Not something a “traditional lead agency” would be likely to recommend.

 

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