Reconsidering the Advertising Industry

A Conversation Starter Reconsidering the Advertising Industry By: Alain Thys and Stefan Kolle © Lisovskaya | Dreamstime.com FUTURELAB Sponsored by Management Centre Europe.

FUTURELAB Prelude: Why This Document Exists © Lisovskaya | Dreamstime.com

FUTURELAB Prelude: All is Not as it Should Be in the Wonderful World of Advertising Net Promoter Score™ by Industry telco advertising automotive -6% -21% © Stockphotonyc | Dreamstime.com -48% The Net Promoter Score ™ is a registered trademark of Bain, Satmetrix and Fred Reichheld

Prelude: Are Marketers Held Hostage by the Advertising Industry? High Hostages Loyalists Likelihood to repurchase Defectors Mercenaries © Alexey Avdeev | Dreamstime.com\" Low Low Likelihood to recommend High FUTURELAB

Prelude: Do Agencies Overestimate Their Impact on the Client’s Success? © Chris Fourie | Dreamstime.com FUTURELAB

Table of Contents SITUATIONAL ANALYSIS: Agency Challenges 2009 Page 7 12 REMEDIES: Setting Things Right Page 35 10 FORMATS: Agency Models of the Future Page 48 Appendices for Digging Deeper Page 59 FUTURELAB

FUTURELAB Chapter One Situational Analysis: Agency Challenges 2009

FUTURELAB Chapter One Situational Analysis 7 client needs many agencies ignore. 3 areas where agencies are “out of synch” 4 gaps in agency authenticity

Client Need #1: 75% of clients want a truly tailored approach to their business FUTURELAB © Frozenpeas | Dreamstime.com

Agency Response #1: Services that Happen to Fit the Agency Model FUTURELAB

Agency Response #2: We Are Very Creative ... And Big ... And have Big Clients © Robert Byron | Dreamstime.com FUTURELAB

Of the 50 largest advertisers in the world ... 91% 85% 74% Consider the media buying Are convinced their media Opined that these deals process to be insufficiently agency had deals outside the caused bias in the choice of transparent client agreement media and recommendations. Client Need #3: Be A Trusted Media Partner FUTURELAB

Continued Underperformance The Occasional Intransparency and “creative math”” Scandal Agency Response #3: Bad Apples Image 1: CC 2.0: Phauly Image 2: (c) Design 56 – Dreamstime.com FUTURELAB Image 3: (c) Aleksander Ruzicka

Client Need #4: Engage Our Audience Image cc: Dogsbylori's - http://tinyurl.com/6658d7 FUTURELAB

Agency Response #4: Saturation Bombing FUTURELAB

What marketing leaders want from their agencies when it comes to digital Client Need #5: Walk Digital FUTURELAB

FUTURELAB Agency Response #5: Talk Digital © Yuri Strakhov | Dreamstime.com

FUTURELAB CAGR by Marketing Mix Element - Manufacturers (2004-2010 Est.) Source: Deloitte, 2007 Client Need #6: Shopper Marketing

FUTURELAB Agency Response #6: Silo-based Thinking © Phillip Minnis | Dreamstime.com

FUTURELAB Client Need #7: Help me into the C-suite

FUTURELAB Agency Response #7: Look How Cool and Fun We Are ... And Creative Too! © Tomislav Birtic | Dreamstime.com

FUTURELAB Agencies have optimised their business for themselves. Not for their customers. Kris Hoet, EMEA Digital Media Communications Manager, Microsoft Disconnect 1: Most Large Agencies are Mass Production Factories… © Leigh Prather | Dreamstime.com

FUTURELAB 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. … While The World Needs Multi-Disciplinary Boutiques © Iphotoexpert | Dreamstime.com

Digital Creative Production Management Account Mgmt Planning Disconnect 2: Most Agencies are Multi-Local with High Levels of Duplication ... © Michael Brown| Dreamstime.com FUTURELAB

... While Today’s World is Global and Highly Interconnected © Hewlett Packard, Halo Room FUTURELAB

Disconnect 3: Agencies Compete within “Their Crowd” ... © Julien Tromeur | Dreamstime.com FUTURELAB

FUTURELAB Authenticity Gap 1: Diffuse Identity © Eric Marechal | Dreamstime.com

Authenticity Gap 2: Oversensitivity to Trends FUTURELAB

FUTURELAB “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. Authenticity Gap 3: Undue Compliance © Jose Antonio Sánchez Reyes | Dreamstime.com

© Steve Cukrov | Dreamstime.com “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 Authenticity Gap 4: Occasionally Questionable Motivations FUTURELAB

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 12 Remedies to Set Things Right FUTURELAB

© Jan Prchal | Dreamstime.com “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.” #1 Become a Solutions House ... FUTURELAB

#3 Talk Money FUTURELAB © Breeze393 | Dreamstime.com

FUTURELAB © Nob50 | Dreamstime.com #4 Media Neutrality and Transparency

FUTURELAB #5 Replace Noise by Engagement ©i Dan Breckwoldt | Dreamstime.com

#6 Be Digital FUTURELAB © Spaceheater | Dreamstime.com

#7 Think of the Shopper ©i Edyta Pawlowska | Dreamstime.com FUTURELAB

Image: (c) Sebast1an – Dreamstime.com #9 Synch to Global Reality FUTURELAB

#10 Establish A Clear and Differentiated Position FUTURELAB

Customer Proposition Strategy Behaviour of Culture Commitment Leaders Performance Processes & Metrics Structures (c) This framework is property of Management Centre Europe – used with permission #11 Align Good Apples, Get Rid of Bad Ones FUTURELAB

FUTURELAB Chapter Three 10 Formats: Agency Models of the Future

FUTURELAB #5 The Customer Specialist

#6 The Serial Monogamist FUTURELAB

#9 The Fragmented Giant FUTURELAB

FUTURELAB Appendices for Digging Deeper

• 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) Must-read information for every agency executive. FUTURELAB

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 For a conversation on aligning the people in us on info@futurelab.net: your agency to your strategy, get in touch with Management Centre Europe who have International: + 32 2 733 8332 Alain Thys/Stefan Kolle acted as co-sponsor to this report: Athens: +30 210 6101240 Milton Papadakis Bucharest: +40 751 229 217 Ramona Patrascanu Mr. Patrick Faniel Hamburg: +49 40 2780 6223 Anne Marx Customer Specific Solutions Director Kiev: +38 067 502 99 41 Olga Vaganova Tel.: +32/2/543.21.20 Moscow: +7 905 500 5856 Marina Natanova Email: pfaniel@mce-ama.com Shanghai: +86 136 2179 9450 Jan Van den Bergh More Information & Action FUTURELAB

FUTURELAB About Futurelab and This Report WWW.FUTURELAB.NET - BLOG.FUTURELAB.NET - 100.FUTURELAB.NET - PROBES.FUTURELAB.NET

Reconsidering the Advertising Industry

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