Across the world of Twitter, Power 150 blogs, and advertising trade magazines, the marketing industry is increasingly obsessed with the question of what’s next for digital agencies. Just last week, Jacques-Herve Roubert wrote the latest salvo in Advertising Age that we digital agencies are, in fact, ready to lead. And today, the same publication asked whether or not the industry needs big digital agencies anymore. The lesser-known story is that this debate is perhaps more active in the halls of some of the biggest companies in the world. Although clients are getting that digital is important, they’re unsure who should be holding the digital reigns.
In fact, one of our big clients recently posed a question in an annual review; this is the $500 billion question, and one that clients are wrestling with intently as they try to decide whether to trust their longtime, traditional agencies with the future, or throw their lot in with the younger upstarts with less gray hair and less gray flannel. A few days ago, my fellow executive leaders at Bridge Worldwide gathered to do some thinking on the state of traditional versus digital agencies in an effort to answer our clients’ questions and examine our own place in the ad world. This post represents what we came out with: At minimum, digital agencies have a unique perspective that is worth mixing into the brand strategy process—and taken to the logical evolution of meaningful marketing, we have the only mindset that will survive.
The History of Digital Agencies
Looking back only a few years, digital agencies’ point of difference was that we could get stuff done. We brought technology know-how that allowed us to swoop in and execute in ways that the traditional agencies with only a handful of digital folks couldn’t achieve. The large AORs often screwed up important details such as Flash and SEO, and even creative hot-houses such as Crispin Porter were forced to hire The Barbarian Group to develop Subservient Chicken. This skill in “making it happen” ensured that we were kept around and had at least a partial seat at the table. Over time, we took the opportunities to move up on the food chain and help come up with big ideas at the start of the process, informing strategy versus just finishing the last mile.
But this strength in getting it done is starting to erode. Traditional agencies are getting better at getting digital “good enough” so that their clients don’t notice the little things. Clients are also getting tired of paying for multiple people at the planning table, and some of them turn a blind eye to their historic, traditional AORs’ lack of capability. Meanwhile, we’ve seen the rise of low-cost programmers based in developing nations who offer up execution at $25/hour—again, not as good as a one-stop digital shop, but good enough for a brand manager who doesn’t want to know the details. So digital agencies are under new pressure just when they should be high-fiving.
The Future of Marketing
All this pressure from the AORs and programmers happens most with the “traditional digital” work that is the first step of many brands. Basic banners, emails, and websites are all handled pretty easily by these players. Some marketers are kicking their heels up on their desks figuring that they’ve mastered the new world of digital just because they are playing their TV commercials on Hulu. This allows them to keep hitting the same old sales message to eyeballs in a new place. This might seem like a solution, but it is but a small step to where marketing is really going. Already, banner spending is declining in 2009, and there is not enough online video ad viewership to make up for people turning off their network TV stations.
In the future, interruption will get harder and be less effective. Consumer control will increase. The design of sales messages and taglines—the staple of traditional agencies for eons—will slip in significance. Instead, we are already seeing the rise of Marketing with Meaning as an entirely new way of engaging with customers. Instead of tell-and-sell messages designed in 30-second ads or 5-second banner rotations, winning brands will move to create marketing that people choose to engage with—and advertising that itself adds value to their lives.
The Difference Between Traditional and Digital Agencies
I am a firm believer that companies have a natural bias in strategy and approach to challenge and change. They continually go in the direction of their company founders and leaders. This holds true in how agencies approach their work every single day, and there is a big difference between how Traditional and Digital agencies approach the market.
Traditional agencies have always been about Declaring what a brand stands for. They are focused on the positioning of the brand, and hone in on an insight about how the consumer thinks about the category or product. They figure out this one core message, turn it into a simplified ad and tagline, and hammer it home over and over again. This is a real, legitimate skill—and in the world of three TV networks, regional (versus global) markets, and less-sophisticated consumers, it works very, very well. But the problem is that this is increasingly a less and less valuable experience for the consumer who receives this perfectly crafted sound bite. And low consumer value corresponds to low brand value. These ads just don’t have much impact on people’s lives.
Some agencies have learned to Demonstrate what a brand can do and create experiences around products. These are the event marketers and activation agencies that find ways to bring brands to life in a very real, tangible way. One of my favorite examples of this kind of agency is the folks at the agency Gigunda, who were behind the Charmin Times Square bathrooms. You have to agree that these positive, engaging brand experiences are more valuable to the consumers who interact with them; and research continually shows that more engaged, interested consumers translate to higher sales.
Finally we come to Digital agencies, which have always lived in the world of Doing. We digital geeks got into this business because we saw the possibilities of software early on. When we first logged onto AOL or programmed in PERL we realized that we could do things for consumers by creating tools and services. We realized early on that we couldn’t force people to subscribe to our emails or visit our websites; instead, we had to attract them by doing something positive. Our focus has been on figuring out how to invent a “thing” that brings the brand to life and personally adds value to consumers’ lives. I believe the “Do” offers the highest consumer value, and thus greatest return on marketing investment.
Where Digital Agencies Are Leading
If you take in this model and begin to apply it across some of the biggest agencies and most talked-about work in the marketing world, I think it starts to make a lot of sense. For example, only a digital doer such as R/GA would have been able to conceive what became Nike+. Only a digital agency such as AKQA would have thought you could launch Halo 3 by creating a future military museum. Only my team at Bridge Worldwide could have launched a new Healthy Choice product by creating a live, lunchtime improv show. Or take Razorfish, which had the lead on Best Buy’s launch of a musical instrument business. Its Chairman, Clark Kokich, said, “They could have just run ads telling people that Best Buy now sells instruments… [but] we wanted to become a partner in helping people rediscover their love for music.”
It’s also little wonder that the agencies that are leading the dialogue around Marketing with Meaning all come from this “digital doing” perspective. Aside from us at Bridge Worldwide, there’s The Barbarian Group, who came up with the idea of “Branded Utility,” and Renegade, which coined the term “Marketing as Service.” Let me also say that we digital agencies are already leading in new realms such as social media, without having to “prove” that we now “get it.” I find it interesting that PR agencies are trying to recast themselves as those who “deserve” this important new work, even though they have ignored digital tools for years and are used to pushing a single, simplified message on reporters.
It’s also not hard to pick out the brands that have cast their lot with the big, tell-and-sell, “Declare” model of traditional agencies. There’s the Gatorade “Got G” campaign that I’ve picked apart multiple times for trying to coin a catchphrase that no one bothered to waste time on. Sadly, once innovative companies such as eBay (“eBay it!“) and Yahoo! (“It’s Y!ou“) have turned the advertising keys over to big, sexy campaigns that offer nothing more than a tagline. And in one interesting battle between the past and future, Visa has gone to a celebrity laden, single-word declaration of “Go,” while MasterCard is now advertising a free, value-added iPhone app that helps people discover priceless places.
Where We Go from Here
Agencies will be what agencies will be. Those who are good at Declaring will continue to do so, while we who have grown up in the business of Doing will keep marching down that road. The choice is up to you Brand Marketers out there. You must decide whether to cast your lot in one direction or the other, or keep both on hand and do the hard work of balancing their perspectives (and egos). If you think the world will continue to be ruled by clever interruption and one-word taglines, then please don’t waste your time and money dealing with leading digital agencies. But if you believe that the future is about creating true connections with your customers by adding value to their lives, then go ahead and give any one of us a call. We’re standing by and ready to help Lead and Do.