New Discussion: Why Ad Agencies Aren’t Going Away Anytime Soon!

Ad Game 01

Advertising Age recently printed an interesting article by Al Reis, Chairman of Reis & Reis, an Atlanta-based marketing strategy firm, titled: “Why Ad Agencies Aren’t Going Away Anytime Soon.” Here’s what it said:

Why Ad Agencies Aren’t Going Away Anytime Soon.

Shops Can Provide a Critical Objectivity That Marketers Are Incapable Of.

Years ago, I was making a presentation to a client about the need to make a major change in the brand’s overall strategy.

The client’s marketing director looked at me and said in a stern voice: “We do the positioning. You do the advertising.”

(I bit my tongue so I wouldn’t say, “But Jack Trout and I had something to do about creating ‘positioning.'”)

He was right, of course, and he was wrong. The client always bears the responsibility for the success of a marketing campaign. But along with that responsibility is the need to listen to its advertising agency and marketing partner.

Ignorance is bliss?
 Agencies have one big advantage: ignorance. In other words, objectivity. That’s the reason, in my opinion, the advertising agency is going to be with us for many more years to come — in spite of the fact that clients could do all of their own advertising and marketing programs faster and cheaper.

Client marketing people are too close to the company, its products, its brands, its history, its distribution, its competitors.

Most of these things don’t really matter because the essence of marketing is getting inside the mind of consumers. Good agency people look at the brand the way the consumer looks at the brand. Not the way the company looks at the brand.

Recently, Nokia’s chief marketing officer said the company’s goal “is to reignite the Nokia brand, bringing meaning, relevancy and emotion to the brand.”

Really? Is that what the smartphone buyer wants? If so, I would think he or she would get all that meaning, relevancy and emotion by buying an iPhone.

If you could put yourself in the mind of a smartphone prospect, I think you would find an attitude expressed by the question, “Why should I buy a Nokia when I could be getting an iPhone or a Samsung Galaxy?”

Furthermore, if you really want to get into the prospect’s mind, you should answer that question with a single word. That’s how brands are built.

Boardroom thinking creeping into ads
What I find astonishing today is how corporate platitudes that sound great in the boardroom manage to show up in the company’s advertising.

Ask Chevrolet owners last year why they bought a Chevrolet. Are they going to say, “Because Chevy runs deep”?

Ask Chevrolet owners today why they bought a Chevrolet and are they going to say, “Because I wanted to find new roads to drive on”?

But that doesn’t seem to bother Chevrolet’s chief marketing officer. He calls “Find new roads” “a platform that has legs and can really stay with us a long time.”

Is marketing a discipline to create platforms that have legs? I thought marketing was a discipline for putting ideas into prospects’ minds.

Ask Toyota owners, why they bought a Toyota and are they going to say, “I wanted to go places”?
Ask Honda owners why they bought a Honda and are they going to say, “I wanted to start something special”?

Ask Bud Light drinkers why they drink Bud Light and are they are going to say, “Here we go”?
Ask Coca-Cola drinkers why they drink Coke and are they going to say, “I was depressed so I thought I’d open a little happiness”?

You know what? I don’t blame advertising agencies for creating these “say nothing” ideas. I blame them for not insisting the brands involved make product changes in order to provide ideas that resonate with consumers.

That’s what marketing is all about, as differentiated from advertising.

Advertising is taking the client’s marketing strategy and converting it into consumer messages. Marketing is taking the consumer’s point of view and converting it into a marketing strategy.
The problem with advertising today
The problem with advertising today is not in the advertisements themselves. For the most part, the ads are faithful to the client’s marketing strategy. The problem is in the marketing strategy.

Take Chevrolet. What marketing strategy could you possibly concoct for a brand that sells everything under a single brand name? “If it has four wheels, you can find it at a Chevy dealer.” (That might work well for a monopoly, but not when there are 23 separate automotive brands in the U.S. market, each selling more than 100,000 vehicles a year.)

Five years ago, an Interbrand survey of 118 chief marketing officers and senior marketing executives at ANA member companies found that 64% of these executives noted that “brands do not influence decisions made at their organizations.”

I have a feeling a similar survey today would find that the percentage of “brand deniers” has increased, not decreased.

In a world that gets increasingly more complex every day, you might expect to find just the opposite: that brands would be getting more and more important. That’s certainly my take on the world at large.

I recently read a summary of a speech by a retired CEO of a major American company. He stated that the marketing function and its leaders must ensure that their “marketing goals are in alignment with the organization’s goals.”

That sounds so logical you know it must have been created by a left-brain management type.
A history lesson
Chevrolet really does run deep. Its history that is. Back in 1962, Chevrolet was the dominant automobile brand in America with a market share of 31%.

That year, 87% of all Chevrolet vehicles sold were “entry-level” cars.

Today, in addition to entry-level cars, Chevrolet also sells cheap cars, luxury cars, sports cars, spot-utility vehicles and trucks. Chevrolet’s market share today: 13%.

You might think General Motors’ management would make a connection between the two. Just because you have more types of vehicles to sell doesn’t necessarily mean you sell more vehicles.
Even more importantly, the more types of vehicles you sell under a single brand name, the weaker the brand becomes.

There’s another dynamic at work, too. As a general principle, the more competitors in the marketplace, the narrower your product line should be. The fewer the competitors, the broader your product line can be.

Back in 1962, there were only 12 automotive brands that sold more than 100,000 vehicles a year. Today, there are 23. So Chevrolet today should have a narrower product line than it had in 1962.
But apparently, the “organization’s goals” are to sell more types of vehicles under the Chevrolet brand name and marketing goals need to be in alignment with the organization’s goals.

So Chevrolet says to its advertising agency: “We do the positioning. You do the advertising.”

The eyes and ears of their clients.

Too bad more organizations don’t take more advantage of their advertising agencies. With no axe to grind, an agency is an ideal organization to serve as the “eyes and ears” of a client. A CIA, so to speak, that can determine “what can be done” given the situation inside consumers’ minds.

Once a brand’s reasonable “marketing goals” can be determined, then the client is in a much better position to establish “management goals.” 

Al Ries
Ries & Ries

About Nate Marks

We live and work in a world of visual images.
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One Response to New Discussion: Why Ad Agencies Aren’t Going Away Anytime Soon!

  1. Mike Willett says:

    Talking about ad agencies making intelligent and meaningful decisions or presenting ideas for their clients is like asking your 2 year old to write a business letter to all your clients. Your child has little direction in making the right decisions to present the proper information, let alone the word knowledge to communicate the message. Same problem with agencies. They have lost a lot of their direction, knowledge comes hard for them even though it is readily available, but the biggest problem is, they no longer seem to have the direction to ask the right questions, and certainly don’t seem to have the knowledge to present the proper kind of research and conclusions.

    Brand meaning? If you or your clients attempt to ask that kind of question, they are in for a real surprise. As an advertising photographer for many, many years, the first question I always asked when meeting about an upcoming shoot was, what is it we are attempting to convey? What, in other words, was the brand message, does it work, and how do we best communicate it. As most of you have already surmised, I always, and I mean always, got a blank stare and a lot of mumbling.

    You can blame the schools, you can blame the profession, you can blame most anyone or thing, but the bottom line is, Ad agencies have lost their direction, and simply put, through their own stupidity. If you are involved in choosing or deciding on an ad agency, you had better develop your own questions, and make sure you know the correct answers, before the agency even opens their collective mouths.

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