Agencies: 15 Risks You Can’t Afford Not to Take
Viewpoint: Forget the Recession, This Is No Time to Ignore Changes to the Agency Business Model
Risk-aversion is a natural human trait, and it’s one that gets amplified in times of trouble. Given we’re all suffering through an exceptionally difficult economy, this is one of those times many of us feel like pulling in our horns and toughing the tough patch out.
That’s the worst possible course of action we could take.
As every informed agency executive knows, we’re at the nexus of the Great Recession and the Great Transformation of Marketing. In circumstances like these, a strategy of “just try harder” won’t take you very far.
Economists are always talking about types of risks you can afford and the kinds you can’t afford to take. For those of us in the agency business, the latter bucket of risks is mostly about failing to adapt to the dramatic changes affecting the agency business model.
Here are 15 things agencies can’t afford to risk.
1. A skill set built mostly around interruption instead of engagement. Agencies are used to delivering exposure for their client’s brand messages, measured by things such as reach, frequency and cost per impression. With the consumer firmly in control of his or her media-viewing choices and habits, no amount of exposure matters if nobody’s paying attention. What agencies sell — or should sell, anyway — is engagement. The metrics of engagement are completely different from the traditional media measurements of the past, including attentiveness, receptivity and buzz potential. Exposure is about efficiency. Engagement is about effectiveness.
2. A digital department in place of a digital competency. The digital department of the 2000s is like the TV department of the 1950s. The digital revolution has been around long enough that it’s time for specialized departments to go away. Virtually every position that exists in digital departments has a natural home in the already existing functions of the agency. All it takes is a mandate from management that digital will be a competency of the agency, not a department.
3. Core competencies focused on “one to many” instead of “one to one.” Lots of agency professionals have an irrational fear of data and databases, even though the future of marketing clearly revolves around understanding how to leverage that information. Thanks mostly to the internet, mass audiences can now be identified and targeted in ways that make much better use of marketers’ money. Agencies need to move from mass messaging to mass customization. Agencies know broadcasting, but must now learn narrowcasting.
4. Creating brand-to-consumer communications at the expense of consumer-to-consumer communications. The agencies that grew up in an era of controlled communications now have to learn how to serve their clients in a world of open conversations. This requires a very different skill-set and service offering. It also means moving beyond consumers as audience to consumers as media.
5. Lack of analytics and tools to measure effectiveness. Agencies — and many advertisers — still have the wrong-headed view that effectiveness is too difficult to measure. Too many red-herring arguments get in the way of agencies getting more serious about analytics: Of course there is no silver bullet for perfectly calculating ROI. Of course agencies can’t be held fully responsible for sales. But this shouldn’t stop agencies from helping clients identify and test the key drivers of bra
great insights into the rules of our business…now!