You can skip this ad in 15 seconds. Your article will be ready to read in 5, 4, 3, 2…1. Welcome to the world of advertising, a world of endless interruptions where brands, at best, try to borrow your attention for a few moments, and at worst, steal your time.
The result, the clock is ticking for the ad industry. Most agencies have been trying to innovate around their own business model for years—but have they been asking the right questions to allow them to innovate? Let’s use the analogy of mobile phone networks: you could say that a lot of agencies are stuck with 2G thinking—traditional teams, linear processes that result in linear output and at best, cool videos for the internet. Let’s call it interruption advertising. So agencies ask themselves, “How do we move from 2G to 3G? How do we innovate?” Like most sectors they look to their nearest competitors and ask, “What are they doing? Ah, they’re doing digital!” So now all agencies think innovation = digital. As a result, we’re not seeing genuine innovation; instead we’re seeing more interruption, in more places, on more devices.
Just as many developing countries are jumping from 2G phone networks to 4G, (skipping 3G altogether) so agencies should be figuring out their 4G—a post-digital model. (If digital isn’t already a part of everything you do as an agency, then you’re probably sinking faster than you realize.) And where has agencies’ 2G and 3G thinking got them? Well, it’s currently moved them down the value chain of client thought partners to the point where they are treated as suppliers, reducing advertising agencies to hand-to-mouth businesses billing from project to project.
Ad agencies need to innovate, and innovate fast, but are caught in what is known as, ‘the innovator’s paradox.’ When times were good, agencies thought “why change what we’ve always done?” They were sitting on big retainers; clients came into an agency and shopped by department—TV, print, digital and then integrated. But something changed. Clients started taking more of the strategy and even more of the creative direction in-house—paying for execution and less and less for ideas. So even if you are at the top of your game and making the best straight-to-YouTube 90-second TV ads an agency can, you probably still can’t be sure where the next job is coming from.
So what is an agency’s 4G? Is it a labs model? Isn’t this just innovation as cliché, with some buzzword bingo thrown in for good measure—beta, rapid prototyping and mashup thinking? It’s digital trendy and what’s trendy right now on the innovation front? Let’s call it make culture. Yes, it’s interesting, it’s real and it gets talked about—digital T-shirts for whisky brands, Google Glasses, ACME Robots, chalk bots, Chrome experiments to name a few. But if you know the Gartner Hype Cycle, you know that agencies and their labs are playing at the PR end of the cycle—which currently is where they belong. Make something cool that gets talked about, often with a film to promote it and you’ve simply got classic borrowed interest. The film of the invention (not strictly an innovation) will interrupt people, hopefully get shared and will earn media—but it doesn’t change the client’s core business and certainly doesn’t change the world.
Speaking of changing the world. Let’s flip to the client side for moment, because you can only help someone change who wants to be helped. If agencies are going to innovate in order to help their clients innovate, then clients also need to take a step forward. The first step? Get rid of the marketing department! Marketing departments have become self-serving entities and run the risk of no longer reflecting the company’s interests. Instead, clients should scatter marketing throughout their organizations and make its mandate disruption not interruption. Should marketing’s role become that of the court fool or jester—the part of an organization that can speak the "real" truth to the King? Let’s rename marketing “innovation and disruption” and embed it at all levels of the organization and make everyone accountable for change, rather than accountable for maintaining the status quo.
Whilst we are all waiting to enter the Promised Land, let’s get back to the innovator’s paradox. How do you change your agency when resources are increasingly tight? You need time and space to modernize, time to think about your 4G proposition, but you have 2G people everywhere, marshaling 2G processes. After all, that’s what you’re known for and that’s what your 2G clients still buy. Which means agencies are increasingly providing window dressing for their client’s ailing business models and not helping them face the challenges of the modern shared and networked economy. (I’d be interested to see the last ad campaign for the U.K. high street video rental chain Blockbuster, which has just called in the receivers. Where was the innovative thinking to help them come out of their death spin?)
We can all recall similar examples. An agency I know was approached by one of the world’s leading, but struggling, in-car satellite navigation companies. They were being undercut by ‘that’ll do’ technology in the form of Google Maps. It’s not as good as the client’s premium product, but free and easy to use. In the face of this massive crisis what was the client asking for? A homepage redesign! So instead, the agency (complete with UX thinkers, T-shaped creatives and a genuine ambition to help their clients) went back with a revolutionary way for them to think about their business model—freemium. Give away the app version of their product with some local maps for the customer’s everyday drives and sell all extra maps for 69 cents a time. The other real benefit here, the more people who use the app, the better it works thanks to all the data everyone now using your product provides. So as a company, their whole value proposition would change and give them something genuinely amazing to talk about—“We keep the world moving.” What happened? Nothing. Their business is shrinking rapidly and free competitor products are becoming better every day.
Challengers are everywhere in our rapidly changing economy. Look at Hipstamatic—side-swiped by Instagram in the blink of an eye. And new models are challenging advertising itself. Giant Hydra can create a virtual agency overnight for any client—which means agencies have to figure out their 4G in our networked economy even faster. The same pace of change also faces our clients. Let’s remember that anyone can become a hotelier thanks to Airbnb—if I was in the budget hotel business I’d be getting worried. Consumers can increasingly avoid the big supermarkets and make the choice to buy from local suppliers thanks to farmers’ markets. And instead of buying a new car, we can occasionally buy a share in a one thanks to Zipcar. If I was a CEO in a leading car manufacturer, I’d be bypassing my marketing department and talking directly to smart agencies and other thought partners about innovative connected transport solutions, partnerships with airlines and rail companies, Zipcar type startups and carpool organizations. Or, I could hang on to an old model and keep asking my old agencies to make aspirational consumer porn to interrupt people’s online experiences in the hope that they might have a spare $20K to spend on a new car.
The urgency for change is driven by consumers themselves. They have access to the technology that allows them get involved in and understand the shared, networked economy much faster than the brands that constantly interrupt people. (How long before consumers take control of their own media selling?) Consumers don’t need top down brands any more, they will work around them unless they become relevant. Ad agencies need to understand this and help their clients add value to people’s lives and operate on the individual’s terms, rather than the terms of the marketing department.
And as the agency, if all you are doing is helping your old-fashioned client make good old-fashioned brand propaganda across an array of modern devices, it’s maybe time to figure out your 4G. Start by remembering the business you are in—the creative business, the ideas business, the innovation and disruption business—not the interruption business. When times are hard, value what you do more than ever and charge a premium for it, and for all parts of the process. Don’t tear up your discovery and briefing phase just because the client doesn’t want to pay for it. Tell your client some home truths and if they don’t want to listen, find some that do. Because when you’ve disrupted your agency’s model and found the clients who match your values, you’ll have created a modern client/agency partnership where mutual success is driven by change, innovation and disruption.
Chris Baylis is ECD at Tribal DDB Amsterdam, which was recently honored as the Eurobest Digital Agency of the Year.