reconsidering the advertising industry
TRANSCRIPT
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Reconsidering the Advertising IndustryA Conversation Starter
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Sponsored by
Management Centre Europe.
By: Alain Thys and Stefan Kolle
Prelude: Why This Document Exists
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Comparative Estimates: US Total Media
Advertising Spending Growth, 2009
(% change vs prior year)
Wachovia: - 0.8%
BMO Capital Markets: - 1.9%
Collins Stewart LLC: - 2.0%
GroupM: - 3.2%
Citi Investment Research: - 3.6%
MAGNA: - 4.5%
Morgan Stanley: - 5.0%
ThinkPanmure LLC: - 5.0%
UBS: - 6.0%
ZenithOptimedia: - 6.2%
Myers Publishing LLC: - 6.7%
Barclays Capital: -10.0%
Source:
Seven Predictions for 2009, eMarketer, January 2009
automotiveadvertisingtelco
-6%
-21%
-48%
The Net Promoter Score ™ is a registered trademark of Bain, Satmetrix and Fred Reichheld
Net Promoter Score™ by Industry
Prelude: How will Agency’s Fare in a Market Where Clients are Dissatisfied?
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Likelihood to recommendLow High
Lik
elih
ood to r
epurc
hase
Low
HighHostages Loyalists
Defectors Mercenaries
Prelude: Are Marketers Held Hostage by the Advertising Industry?
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Prelude: Do Agencies Overestimate Their Impact on the Client’s Success?
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Table of Contents
SITUATIONAL ANALYSIS: Agency Challenges 2009
12 REMEDIES: Setting Things Right
10 FORMATS: Agency Models of the Future
Page 7
Page 35
Page 48
Appendices for Digging Deeper Page 59
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Chapter One
Situational Analysis: Agency Challenges 2009
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Chapter One
Situational Analysis
7 client needs many
agencies ignore.
3 areas where agencies
are “out of synch”
4 gaps in agency
authenticity
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Client Need #1: 75% of clients want a truly tailored approach to their business
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Agency Response #1: Services that Happen to Fit the Agency Model
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Client Need #2: Show Me the Return on My Marketing Investments
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Agency Response #2: We Are Very Creative ... And Big ... And have Big Clients
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Client Need #3: Be A Trusted Media Partner
91% Consider the media buying
process to be insufficiently
transparent
Of the 50 largest advertisers in the world ...
85% Are convinced their media
agency had deals outside the
client agreement
74% Opined that these deals
caused bias in the choice of
media and recommendations.
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Agency Response #3: Bad Apples
The Occasional
Scandal
Underperformance
and “creative math””
Continued
Intransparency
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Image 3: (c) Aleksander Ruzicka
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Client Need #4: Engage Our Audience
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Agency Response #4: Saturation Bombing
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Client Need #5: Walk Digital
What marketing leaders want from their agencies when it comes to digital
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Agency Response #5: Talk Digital
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Client Need #6: Shopper Marketing
CAGR by Marketing Mix Element - Manufacturers
(2004-2010 Est.)
Source: Deloitte, 2007
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Agency Response #6: Silo-based Thinking
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Client Need #7: Help me into the C-suite
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Agency Response #7: Look How Cool and Fun We Are ... And Creative Too!
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Chapter One
Situational Analysis
7 client needs many
agencies ignore.
3 areas where agencies
are “out of synch”
4 gaps in agency
authenticity
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Kris Hoet, EMEA Digital Media Communications Manager, Microsoft
Agencies have optimised their business for themselves. Not for their customers.
Disconnect 1: Most Large Agencies are Mass Production Factories…
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… While The World Needs Multi-Disciplinary Boutiques
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Agencies need to be chameleons which can become
what ever the client requires them to be.
Not just what they happen to be good at.
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Disconnect 2: Most Agencies are Multi-Local with High Levels of Duplication ...
Creative
Production
Account
Mgmt
Planning
Digital
Management
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... While Today’s World is Global and Highly Interconnected
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Disconnect 3: Agencies Compete within “Their Crowd” ...
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... While the Competition is Transforming
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Chapter One
Situational Analysis
7 client needs many
agencies ignore.
3 areas where agencies
are “out of synch”
4 gaps in agency
authenticity
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Authenticity Gap 1: Diffuse Identity
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Authenticity Gap 2: Oversensitivity to Trends
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Authenticity Gap 3: Undue Compliance
“We knew that it wouldn’t work, but the
client wanted it. So we made it happen.
After all, under all the gloss, we must
accept that we are prostitutes.”
Head of Business Development commenting on
modifications to a global campaign you know.
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Authenticity Gap 4: Occasionally Questionable Motivations
“I don’t care about making money for my clients. I just want
another award before I jump this ship. ”
Agency CEO of a A-list mediterranean agency
“Listen, we know that spending x million in above won’t fix the
issue, but they’re going to spend it anyway. We can just as well try
to grab as much as possible.”
Pitch team on an international account
If a client thinks a brand is great, but you find out his consumers
disagree, you’d only tell him if you’d get more business out it.
Otherwise, best to leave these things untouched.
Major agency creative director instructing a recent recruit over lunch
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12 Remedies to Set Things Right
1. Become a solution house ...
2. ... Or Not
3. Talk Money
4. Media Neutrality & Transparency
5. Replace Noise by Engagement
6. Be Digital
7. Think of the Shopper
8. Get a Makeover
9. Synch to Global Reality
10. Establish A Clear & Differentiated Position
11. Align Good Apples, Get Rid of Bad Ones
12. Take a Moment of Self-Reflection
Chapter Two
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#1 Become a Solutions House ...
“Our recommendation is not to proceed with any
above-the-line campaign in the coming year.
In stead, it is better to upgrade call-centre training
and accellerate the go-to-market processes so
they co-incide with the consumer shopping cycle.
Obviously we are happy to assist in these areas.”
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#2 ... or not
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#3 Talk Money
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#4 Media Neutrality and Transparency
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#5 Replace Noise by Engagement
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#6 Be Digital
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#7 Think of the Shopper
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#8 Get a Makeover
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#9 Synch to Global Reality
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#10 Establish A Clear and Differentiated Position
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#11 Align Good Apples, Get Rid of Bad Ones
(c) This framework is property of Management Centre Europe – used with permission
Customer
Proposition
Behaviour of
Leaders
Processes &
Structures
Performance
Metrics
Strategy
CommitmentCulture
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#12 Take a Moment of Self-Reflection
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10 Formats: Agency Models of the Future
Chapter Three
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#1 The Factory
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#2 The Category Killer A: Media
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#3 The Category Killer B: Curated Creative Marketplaces
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#4 The Category Killer C: Production Machines
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#5 The Customer Specialist
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#6 The Serial Monogamist
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#7 The Marketing & Communication Boutique
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#8 The Craftsman
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#9 The Fragmented Giant
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#10 The Persistent One
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Appendices for Digging Deeper
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Must-read information for every agency executive.
• Forrester Research: Help Wanted: 21st Century Agency ($ 279 at www.forrester.com)
• Rainmaker Consulting: The Intelligent New Business Survey (free at
http://tinyurl.com/59dkff)
• Agency Search – What Matters? Winning Strategies for Ad Agencies – presentation ,
MillWard Brown, April 2007 (free at: http://tinyurl.com/5hhh7e)
• Henry Jenkins, Convergence Culture, NYU Press, 2006
• The full version of this report which can be purchased on
www.futurelab.net/agencyreport (€499 + VAT)
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More Information & Action
If you want more information on this report or would like to discuss the
pursuit of any of the strategies discussed in your agency, get in touch
with us on [email protected]:
International: + 32 2 733 8332 Alain Thys/Stefan Kolle
Athens: +30 210 6101240 Milton Papadakis
Bucharest: +40 751 229 217 Ramona Patrascanu
Hamburg: +49 40 2780 6223 Anne Marx
Kiev: +38 067 502 99 41 Olga Vaganova
Moscow: +7 905 500 5856 Marina Natanova
Shanghai: +86 136 2179 9450 Jan Van den Bergh
For a conversation on aligning the people in
your agency to your strategy, get in touch
with Management Centre Europe who have
acted as co-sponsor to this report:
Mr. Patrick Faniel
Customer Specific Solutions Director
Tel.: +32/2/543.21.20
Email: [email protected]
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