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Tim Harvey University Dissertation: The Age of Engagement


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Tim Harvey University Dissertation: The Age of Engagement

  1. 1. 20510556 Vic Davies Author: Tim Harvey ID Number: 20510556 Tutor: Vic Davies Business School Buckinghamshire New University Advertising and Promotions Management BA (Hons) What does the advertising industry mean by the term ‘engagement’ and have job skills and agency models changed in an age of engagement? Word Count: 13,890 Date: 24/04/2008 Please note that this paper does not include the transcripts from the primary research conducted for confidentiality purposes. 1
  2. 2. 20510556 Vic Davies Abstract This paper is a response to the recent hype amongst advocates in the communications industry surrounding the topic of engagement. Engagement is a term that has developed as a successor to ‘interruption’, an age of speaking to mass audiences, through mass media. The IPA have labelled this change as a paradigm shift, and Green (2007) states ‘We are told that success in the modern era hinges on our ability to engage rather than interrupt.’ This paper discusses the topic of engagement through answering the following question: What does the advertising industry mean by the term ‘engagement’ and have job skills and agency models changed in an age of engagement? An argument has been put forward as a response to the proposed question through the use of both secondary and primary research, which explores how the industry views the term ‘engagement’ and how the industry has reacted to its very nature. The aims and objectives of this report have been used to structure this argument and consequently the following chapters have been specified throughout both the primary and secondary research process: - What is Engagement? - The Change in Agency Model - Change in the Knowledge Economy - The Impact of Technology and ‘Digital’ - What is the Industry doing? 2
  3. 3. 20510556 Vic Davies The literature review set the scene for the findings of this paper, and also contributed heavily to methodology of the primary research. The key findings of this paper are as follows: - In an era of the sophisticated consumer, the term engagement should incorporate both effective content and context elements, speaking to a consumer in a way that they want to be targeted, at a time and place when they want to be spoken to. - The planning discipline is now more highly regarded within the creative process than it has been in the past, and consequently agencies are changing their model to encourage the collaboration of all disciplines. - There is a clear link between media fragmentation and the development of the knowledge economy, encouraging advertisers not only to engage with consumers on new platforms (context) but engage with consumers through delivering effective messages on traditional platforms (content). - The growth of the digital sector means that advertisers can engage with consumers far more successfully than they have been able to do through the use of passive media. However, the consumer must be put at the heart of communications, not necessarily the channel on which they receive a brand message. - The advertising industry has often tried to resist change and as a consequence this has led to an influx in start up agencies who accept change as part of evolution, these agencies will survive for longer. 3
  4. 4. 20510556 Vic Davies The advertising industry is constantly changing; however this should not be for change sake but as a reflection of society. The age of engagement is an emphasis on the current state of industry; however engagement has always been part of the communications process. The industry should accept engagement as an evolutionary process and rather than capitalise on its new business qualities, focus on the consumer and the future, viewing change as a positive process, not a threat. 4
  5. 5. 20510556 Vic Davies Contents 1.0 – Introduction Pg. 7-8 2.0 – Aims and Objectives Pg. 8 Literature Review 3.0 – What is Engagement? Pg. 9-14 4.0 – The Change in Agency Model Pg. 15-19 5.0 – Change in the Knowledge Economy Pg. 20-23 6.0 – The Impact of Technology and ‘Digital’ Pg. 24-27 7.0 – What is the Industry doing? Pg. 28-30 8.0 – Summary of Literature Review Pg. 30 9.0 – Research Methodology Pg. 31-37 9.1 – Critique of Methodology Pg. 38-39 Primary Research 10.0 – What is Engagement? Pg. 40-44 11.0 – The Change in Agency Model Pg. 45-48 12.0 – Change in the Knowledge Economy Pg. 49-52 13.0 – The Impact of Technology and ‘Digital’ Pg. 53-56 14.0 – What is the Industry doing? Pg. 57-61 15.0 – Conclusion Pg. 62-65 5
  6. 6. 20510556 Vic Davies 16.0 – References Pg. 66-71 17.0 – Extensive Bibliography Pg. 72 18.0 – Appendices Appendix 1 Pg. 73-74 Appendix 2 Pg. 75 6
  7. 7. 20510556 Vic Davies 1.0 – Introduction The advertising industry has traditionally aimed to communicate to consumers through disrupting and interrupting their lifestyles. Interruption worked as a process in an era of speaking to mass audiences, through mass media. However, Green (2007) states ‘We are told that success in the modern era hinges on our ability to engage rather than interrupt.’ The advertising industry has created a lot of hype surrounding the topic of engagement, Gordon (2008) states ‘As for the Age of Engagement I talked at an ADMAP conference at which the four key speakers in the first 2 hours used the word in different ways - there is no universally accepted definition and in fact one speaker suggested it was last year's buzz word.’ This paper intends to discuss the area of engagement through answering the following question: What does the advertising industry mean by the term ‘engagement’ and have job skills and agency models changed in an age of engagement? Models of Advertising to Illustrate Engagement Awareness Interest Desire Action A traditional advertising hierarchy model, AIDA adapted from McDonald (1992) Engagement Interest Action An adaptation of AIDA, to reflect the Age of Engagement. 7
  8. 8. 20510556 Vic Davies This paper explores the subject of engagement through both secondary and primary research. The literature review initially sets the scene for the argument regarding a paradigm shift from an age of interruption to an age of engagement, which is then applied to the primary research process in which industry professionals have been questioned on their personal and professional opinions. The chapters for both the literature review and the primary research of this paper have been labelled as a response to the aims and objectives specified in order to ensure that a coherent argument is made which is relevant to the thesis of this paper. 2.0 - Aims and Objectives • Explore and define what is meant by the term ‘engagement’ within the Advertising Industry. • Critically analyse the traditional Advertising Agency Model and discuss how it has evolved. • Assess the change in the knowledge economy and its effect on the consumer, commercial marketing communications and marketing and its relationship to business. • Discuss the change in economy and the impact of technology and growth of ‘digital’ on defining the term ‘engagement’. • Discuss what the industry is doing as a result of these changes and examine the effectiveness of the changing agency model. 8
  9. 9. 20510556 Vic Davies Literature Review 3.0 :- What is engagement? Traditionally advertising agencies have used the terms ‘disruption’ and ‘interruption’ to describe the desired effects of its communications, disruption being a term that TBWA Worldwide still preach about and practice. Berger (2005) states ‘The world is difficult, uncomfortable. But the first thing to understand is that “Disruption” is not destructive. It is creation.’ TBWA Worldwide is probably the most obvious network that has philosophised around the area of disruption, applying a simple model to each of its most successful advertising campaigns in a book entitled ‘Disruption Stories’. The basic model of disruption identified by the agency has been illustrated below. 9
  10. 10. 20510556 Vic Davies The diagram illustrates disruption as part of a communications process, TBWA suggest that ‘Disruption is a means of creating something dynamic to replace something that has become static.’ As a traditional model of advertising communications, disruption reflects the USP theory dictated by Reeves (1961) who states ‘Each advertisement must make a proposition to the consumer. Not just words, not just product puffery, not just show- window advertising. Each advertisement must say to each reader: 'Buy this product and you will get this specific benefit.’ However, in an era of technologically savvy consumers, and indeed sophisticated consumers, even a dynamic communication with a USP still might not provoke engagement with a brand and therefore not be as effective as it should or could be. Ephron (2006) suggests that ‘Engagement exists only as an abstraction’ and therefore it is difficult to define and clarify one distinctive meaning for the term. This suggestion of engagement existing as an abstraction and advertising moving away from the USP era to an era of branding can be related to the work of Maslow (1943). Maslow created a hierarchy of needs model that suggests what people are motivated by and what they aspire to, supporting brand added value that improves esteem and not just security and physiological factors (which basic products improve). The initial inference that Ephron makes in an attempt to distinguish the meaning of engagement, is that ‘It's sloppy to talk about engagement without being specific. Media engagement and advertising engagement are different things.’ Although the thesis for this paper clearly states the nature of this report lies within the advertising industry, it is important to take into account the difference in media and advertising engagement to avoid confusion and 10
  11. 11. 20510556 Vic Davies clarify one specific meaning for the focus of this paper. Ephron argues ‘Media are often engaging, but that's it. They don't usually pass that engagement through to the ads they carry.’ In contrast to a media perspective on engagement and in relation to the area of advertising, Murray (2007) states ‘Engagement requires the involvement and participation of your consumer in a dialogue rather than talking at them (as with the age of interruption).’ The term dialogue indicates a means by which engagement takes place, possible through interactive technology. Brooks (2005) states ‘Over the last few decades, we have witnessed an evolution of the advertising model from stimulusresponse to dialoguebase…with the rise of the Internet, dialogue became an even more basic expectation of the savvy consumer.’ However, it is fair to state that owing to the need for both advertising and media agencies to understand the change in consumers, the definition of the term ‘engagement’ should not necessarily differentiate. Perhaps the key schools of thought that should be examined on the term ‘engagement’ should view the term from an agency perspective and also a research perspective. Janet Hull of the IPA discusses the term as a ‘two way process’, opposing ‘interruption’ which is viewed as a ‘display process’, suggesting one-way communication. Much research has been conducted on the area of engagement and the future of advertising, by the IPA and the Future Foundation (2007) and a paradigm shift has been identified, outlined below. 11
  12. 12. 20510556 Vic Davies The diagram illustrates a distinctive shift from the age of interruption to the age of engagement, further diagrams to support this shift can be found in Appendix 1. Plummer (2006), Chief Research Officer of the ARF, defines engagement as the ‘turning on a prospect to a brand idea enhanced by the surrounding context.’ Engagement from a research perspective has been examined and discussed by Elms (2006) who has quite clearly illustrated a link between the effectiveness of an advertisement being higher when consumers have seen supporting work, suggesting engagement: 12
  13. 13. 20510556 Vic Davies The diagram above indicates that engagement is enhanced through integrated advertising, whereby consumers are exposed to multiple models of communication. The charts highlight that positive attitudes towards a brand were increased when a consumer was exposed to TV and Print communications, rather than just TV. This area of research infers that engagement is a process heavily influenced through exposure to advertisements, also supported by the work of Cox (2007) who states ‘Total Recall has significantly enhanced our understanding of how longer exposure to advertising results in significantly greater levels of engagement.’ Clearly a developing subject at the time, Sue Elms developed her theory on engagement in 2007 and wrote a paper on the ‘long tail’, traditionally a term used in statistics to describe certain kinds of distributions, in relation to media. Elms states ‘The Media Long Tail presents advertisers with an abundance of novel ways to engage their consumers.’ In a paper which distinctly addresses the role of media, Elms profoundly suggests ‘The old, 13
  14. 14. 20510556 Vic Davies passive, interruptive medium of TV can still do a lot for a brand…so let’s kill off the interruption versus engagement paradigm. It is just silly; advertising that it classifies as interruptive can be highly engaging, and media it classifies as engaging can be a waste of money.’ However, Elms appears to view interruption as a medium (TV), whereas it can be suggested it is a process (as illustrated by the TBWA model, one which shouts and does not encourage further response). A TV campaign can effectively drive people online or encourage them to establish a relationship with the brand, therefore it is engaging. Rather than conforming to the general consensus that a paradigm shift is occurring, Elms encourages people to ‘look at media engagement in a bigger way’ suggesting the success of brand communications rests on the appropriate selection of media types. Zyman (2002) discussed ‘the end of advertising as we know it’ giving a marketer’s perspective on the advertising industry and stating ‘We know that different customers require different media approaches. But traditionally advertisers took the shotgun approach – hitting as many people as possible regardless of whether they were potential customers.’ 14
  15. 15. 20510556 Vic Davies 4.0 :- The Change in Agency Model The ‘traditional’ agency model has long been under threat due to its inability to combine agency disciplines to improve the level of communication between brand and consumer. The standard agency model originates from the era of Stephen King at JWT and Stanley Pollitt at Boase Massimi Pollitt, both of whom have been accredited as the founders of planning. Although a dated source, much of King’s work is still used today as a means of assessing the change in the industry, and his work provides a basic grounding for the fundamentals of agency structure. King (1969) wrote a paper entitled ‘Inter-media decisions: implications for agency structure.’ The first and most relevant objective set by King within his paper reads ‘What are the criteria for deciding on any organisation and working methods?’ King argues throughout this paper, and indeed his many works, that planning is an important and fundamental part of the process in developing advertising and outlines a standard agency structure that consists of 3 main disciplines, illustrated in the table below: Account Representative Creative Account Planning • Co-ordination of the • Contacts with • Knowledge of capability planning group. communication skills and meaning of research • Contacts with the client and and techniques. • Contacts with media the client's marketing plan. • Defining precise role of buyers, research • Advisor to the client on his advertising within companies marketing plan – especially advertising objectives. • Using research skills, on roles of advertising and • Creating campaign green-fingeredly, to set 15
  16. 16. 20510556 Vic Davies merchandising/promotions ideas from advertising campaign and media in the marketing mix. objectives. objectives, theorising on • Effect of the marketing plan • Knowledge of precise role of on advertising objectives, capability and meaning advertising strategical and tactical. of media (i.e. medium- • Devising and managing • Effect of marketing plan as-medium and continuous programme of direct on inter-media medium-as-message). research (e.g. using it to decisions. evaluate advertising against objectives). Source: Stephen King 1969 The agency structure outlined by King has long been implemented by agencies on a global scale; however, Meskauskas (2007) argues ‘the advertising agency business is in pretty big trouble.’ Meskauskas discusses the area of agency compensation and suggests that ‘Clients are demanding more sophisticated services, but they are doing it while insisting on lower rates of compensation.’ The industry clearly needs to adapt to the development of the client and improve measures of effectiveness and levels of engagement to guarantee custom for the foreseeable future. Cappo (2003) argues against such a motive that clients pay too much for too little and states ‘I am a proponent of fee- based incentive bonus systems that reward the agency handsomely for a big idea that gets results.’ Agency compensation is just one of many areas to be continuously debated amongst industry professionals, however it signifies that opinion formers such as Meskauskas are behind the argument for change that has seen agencies such as BBH 16
  17. 17. 20510556 Vic Davies restructure for the future. Another propeller for change is growth of media and the transition from media planning to communications planning. Sirkin (2004) states ‘An evolution is changing the way clients plan communications for their brands. Some marketers continue to employ the traditional model, while some are embracing a new model for success.’ Although the basis of this report is formed around advertising agencies, the change in media agencies also reflects an age of engagement, Sirkin continues in her paper on communications planning to argue ‘for most target consumer groups now, the traditional model is simply not effective. The explosion of contact choices and the competitive nature of the branding environment demand a more strategic approach to building connections between consumers and brand messages.’ The Account Planning Group (2007) has clearly indicated the change in the role of the planner through the diverse definition of the role in contrast to the definition it gave in 1986. In 1986 an APG report stated ‘the planner is a fully integrated member of the account team working on a continuously involved basis; bringing a consumer perspective to strategy development, creative development, pre-testing of ads. and tracking of the brand's progress.’ A revised version of the APG ‘What is Account Planning?’ report states ‘We need a process that enhances an agency’s ability to produce outstanding creative solutions for our brands that will be effective in the marketplace. It is the planner’s job to guide or facilitate this process via the astute application of knowledge, otherwise known as consumer and market understanding.’ This change has become noticeable throughout the advertising industry, as the planner’s role has diversified to accommodate the changing needs of the consumer. 17
  18. 18. 20510556 Vic Davies A simple interpretation of the revised BBH Agency Model The area of change in organisational structure as a result of ‘engagement’ has been examined by O’Reilly and Nightingale (2007) who discuss the topic with regards to the NFL and ‘Building an engagement-focused organisation’. The work of O’Reilly and Nightingale does not directly refer to the advertising industry; it does however examine engagement as a driver for changing the marketing structure of an organisation in order to prepare for the future and to reflect the change in consumers. O’Reilly and Nightingale (2007) state ‘The NFL has shifted the emphasis of its market research strategy from measuring fan-base growth to measuring fan-base depth, and has boosted its investment in developing a suite of analytic tools to enable the simultaneous quantification of fan engagement with both the NFL and its business partners.’ The paper suggests that engagement is a key area of market research and a focus has been shifted towards understanding consumers and measuring depth and away from measuring growth. This change in market research strategy may be a result of the change in consumer and the 18
  19. 19. 20510556 Vic Davies growing need to improve levels of customer retention and not necessarily pull in new consumers. O’Reilly and Nightingale praise the success of the NFL as a brand and suggest that it has ‘a customer base to whom the brand is as life-sustaining as oxygen.’ Not only does this signify the importance of improving engagement structure within an organisation, it also indicates that through the relevant changes in structure, the brand benefits significantly through the ability to engage more effectively with consumers. 19
  20. 20. 20510556 Vic Davies 5.0 :- Change in the Knowledge Economy The change in the knowledge economy reflects the development of the consumer and their ability to decode communications and therefore switch off to marketing messages. Grant (2003) indicates a key development in society through ‘The work, leisure and learning mix’ as illustrated below: Grant’s interpretation of the knowledge economy suggests that whereas traditionally consumers have only had time for work and then leisure also, a shift towards learning has been initiated. This shift in social change can be put down to a number of variables, such as social policy reform, and a change in government policies. The Labour Party’s 1997 General Election Manifesto suggested an improvement and increase in ‘Lifelong Learning’, stating ‘We must learn throughout life, to retain employment through new and improved skills. We will promote adult learning both at work and in the critical sector of further education.’ Under the Blair regime, much discussion has evolved from this manifesto and the changes needed. The BBC (2002) clarified the manifesto targets and stated ‘The target for 50% participation was announced by the Prime Minister Tony 20
  21. 21. 20510556 Vic Davies Blair before the general election and has remained a flagship education policy.’ This target and government action has stimulated people to invest more in education, thus improving the knowledge economy. The LSC (Learning and Skills Council) has invested many resources into researching the change in the knowledge economy. Many trends and points of relevance have been identified through many of its publications, including its Annual Report. The 2005 -06 Annual Report states ‘There are more 16-to 18-year olds in learning than ever before - 1.5 million. And they are achieving more than ever.’ This statistic is a reflection of the change in government stance on education, and on the public emphasis on a need to be receiving higher education in order to succeed. The report continues to support the development in the learning economy, through the following statement; ‘For adults, we also have a good story to tell. We have beaten our Skills for Life target, improving the basic skills of 1.25 million people.’ Although these findings do not directly indicate that the general public are learning to dismiss marketing communications, the development in the knowledge economy encourages a notion that the population are becoming more technologically aware and more sophisticated and therefore consuming media in more advanced ways than ever before. Supporting evidence to the statements made by the LSC (2006) has been extracted from a report carried out by a similar organisation, the CCSC (Creative & Cultural Skills Council). In 2007 the CCSC proposed a project entitled ‘Creative Knowledge Lab’, an initiative investing money in improving the learning of industry skills. The proposal supported an increase in the knowledge economy, however focusing on the learning of vocational topics and skills. The proposal states ‘People increasingly have higher expectations of personalised services that are tailored to their 21
  22. 22. 20510556 Vic Davies needs.’ This statement suggests that the public have a greater expectation to be communicated to on a personal level and have their concerns addressed, as a response to the development sophistication. Gordon and Valentine (2000) also address the area of the sophisticated consumer, in their discussion of the 21st Century Consumer, addressing definitions, types of consumer, and key changes. The paper focuses on models of thinking and therefore emphasises the need to change with the times and illustrate fundamental shifts. The paper states ‘The model of thinking about the consumer as a sophisticated and aware consumer of brands, communications and experiences has elevated the consumer to the position of final arbiter and judge of marketing activities.’ In an analysis of the ‘traditional consumer’ it is suggested that a consumer, not only consumes physical objects, but also consumes advertising. The findings illustrated by Gordon and Valentine indicate ‘a number of fundamental shifts in the way business professionals need to think and act.’ This notion encourages marketers and advertisers to improve their understanding of the consumer, and take into consideration the development of intellect and sophistication. Models of thinking are not set in concrete and therefore will always need to be re-assessed, contextualised and modernised, the work of Gordon and Valentine (2000) has therefore illustrated that advertisers ‘must seek ways to be proactive in creating products, services and experiences for tomorrows customers.’ Valentine has reiterated her support of stimulating the consumer, through her many works on the role of semiotics within marketing communications, another key tool to improving engagement within brand messages. 22
  23. 23. 20510556 Vic Davies The idea of focusing on tomorrow’s customers has been examined by Namiranian (2006) who has carried out research into the area of brand and media engagement amongst teenagers and ‘demonstrates how market researchers empower companies to shape future strategies for innovation and growth.’ Although Namiranian does not directly focus on the knowledge economy, the research indicates the significance of future, and emerging markets – identifying trends which signify ‘societal changes in brand consumption.’ The context of the study (focusing on emerging markets) used the U.K as a comparison to major cities in China, Russia, Brazil, and Mexico, which allows for a greater understanding of engagement on a global basis to be applied to the topic of this paper. Perhaps the most relevant finding from the research (reflecting a development in the knowledge economy) derives from the sub-heading ‘The “connected computer” is the new TV’. It has become quite apparent that media is becoming more and more fragmented and as a result people are changing the way they consume media. From the study in emerging markets, Namiranian states ‘Computers are supplanting the time spent watching TV and other activities. Most of the teenagers, across all countries, spend between 3–12 hours a day on their computers, particularly when connected to the Internet via broadband.’ This increase and change in media consumption encourages a potential for an increase in teenagers (and therefore the future consumer) to become more technologically savvy and less vulnerable to mass marketing communications. 23
  24. 24. 20510556 Vic Davies 6.0 :- The Impact of Technology and ‘Digital’ Elms (2007) states ‘In today’s world, modern technology has enabled a wide array of new options for entertainment, information, self expression and connecting with others.’ This development has been capitalised on effectively to date by advertisers, who have successfully created new platforms to further engage with consumers and establish strong relationships, and therefore greater insight. Phillipson (2007) states ‘The first six months of 2006 saw UK internet advertising grow by 40% year on year, reaching a total of £917.2m. Confidence is so high that the medium is expected to surpass £2 billion for the full year, and joint research by the IAB and Carat Insight (in the small car market) found that the internet had a greater impact on brand engagement than any other medium.’ One key area of growth and indeed success is that of blogging, a phenomenon that many modern day planners have become fans of. Cooke (2006) discusses the growth of blogging which may not instantaneously be associated with engagement or even the advertising industry, but has changed the way that planners’ work in agencies and acts as a valuable tool for insight. Crumpton (2007) writes ‘The future of planning lies in its ability to do what it has always done, and that is to find interesting and engaging ways of connecting with consumers.’ The irony of this statement is that it derives from a blog initiated by Campaign Magazine for industry experts to discuss the future of the planning discipline. In Cooke’s discussion on the importance of blogging, he first and foremost makes reference to the statement ‘So you know that blogs are the fastest-growing media on the planet.’ In an era of increasing discussions regarding media fragmentation, 24
  25. 25. 20510556 Vic Davies blogging has evidently excelled above other media formats, however it should be taken into account that blogs can also have short lives. The last two years have seen certain members of the advertising industry heavily debate the future of the industry and the impact of ‘digital’. Godin (1999) states ‘Technology is changing the world’s approach to advertising. The Direct Marketing Association no longer ignores the Web-in fact, they devote whole conferences to it.’ The term ‘digital’ which incorporates far more than websites and online banners has encouraged many efforts of entrepreneurialism whereby start-ups such as Dare Digital and Glue London, and even Rivers Run Red (a virtual worlds agency) have developed over the last five years, dealing solely in digital media. The benefit of the digital age is that it is a cost- effective medium (no exceedingly high production costs, or media rates) and it can be measured more effectively than more traditional mediums such as TV or press (through econometrics software and tracking tools). Young (2007) states ‘the world's got digital fever and the industry is clamouring to understand and employ digital in its central marketing efforts.’ Young is a supporter of the statement ‘Traditional Marketing isn’t working’ and therefore a supporter of Cooke’s view on the importance of blogging. However, an argument should be put across as to the significance and relevance of traditional marketing, after all this had led to the development of digital tools and platforms. Traditional marketing does work; however there is now a need to communicate through a range of mediums, and therefore use traditional marketing to drive people online and towards the digital age (improving effectiveness measurements). 25
  26. 26. 20510556 Vic Davies Digital means that marketers can measure who turns on and who turns off, whereas traditional media only allows measurement of opportunity. Engagement is quite relevant in the collaboration of traditional marketing tools and new, digital marketing tools. Young claims ‘It was only a few years ago that the internet was being written off as an advertising medium as agencies tried desperately to fit old-media logic into the new-media environment.’ The advertising industry clearly worked on the basis ‘if it ain’t broke, don’t fix it’, applying this ethos to media logic that had been highly successful for years and would continue to be so in the years to come. Perhaps this approach reflected an age of disruption, whereby agencies were simply trying to speak to consumers and not establish an engaging communication with consumers. The old media logic should simply have been capitalised on, shouting at consumers about this new medium (the internet). Only once consumers then went online, should new media logic be adopted, encouraging engagement. Young (2007) does not take into account the idea that traditional marketing was the grounding for the digital era, which has now led to agencies and marketers investing capital. Cooke argues ‘This new world is defined by the concept of 'engagement' but this has not been the strength of market researchers in the past. In the future we had better learn to engage with the population, and begin to co-create data, so that we can add the consumer insights that our clients want, or we may become 'blogging irrelevant'.’ The impact of technology and ‘digital’ has been overwhelming on the age of engagement, however it is still only one part of a marketing communications development that has 26
  27. 27. 20510556 Vic Davies encouraged change, and therefore it should be used effectively and still approached as a potential medium, and not a compulsory medium. 27
  28. 28. 20510556 Vic Davies 7.0 :- What is the Industry doing? Peppers (1999) wrote the foreword for Seth Godin’s book entitled ‘Permission Marketing’ and starts by making one prediction for the future; ‘Sales and marketing people everywhere will soon be talking about the very commonsense principles of “Permission Marketing” and how best to put these principles to work for their own businesses.’ This prediction has quite evidently come into reality within the last five years, in terms of advertisers investing time and money in SEO. Strauss et al. (2003) state ‘one communication technique unique to the online environment is Search Engine Optimisation (SEO)… many firms use SEO to be sure their sight is high on the list’. However, more appropriately the foregrounding principles of permission marketing have reflected the age of engagement whereby consumers are now more in control of media than ever before. This prediction was never made by David Ogilvy (1983) in his short chapter entitled ‘I predict 13 changes’, perhaps because at the time of writing, the internet was unheard of, let alone known as an advertising tool. It is fair to state that owing to the current rate of media fragmentation, the future of advertising is hard to foresee and therefore prepare for. A more detailed idea on the future of advertising has been developed by Cappo (2003), who discusses ‘New Media, New Clients, and New Consumers in the Post-Television Age’. This chapter is an examination of what the industry is currently doing, but it has become quite apparent that all future predictions are based on the current state of the industry and therefore are a strong indication as to how the industry is adapting to the age 28
  29. 29. 20510556 Vic Davies of engagement. The most relevant material on what the industry is doing will derive from primary research which will involve all areas of this paper, but for now a brief synopsis of the industry at present needs to be established, significant from clear evidence. The term ‘engagement’ has been used by many authoritative sources within the industry for years; however the first person to evidently act on the notion of engagement was Jim Carroll, Chairman of BBH London. Carroll is a leading expert on the area of engagement owing to his creation of a fourth agency discipline within BBH London, engagement planning. The new agency model that has been adopted by BBH, illustrated in section 4.0 of this report, incorporates media planning with creative planning and allows for media to be taken into consideration when devising brand strategy, supporting the work of Elms (2007). Carroll (2005) identifies 10 principles for the age of engagement, in which he discusses the key to creating engaging communications. Perhaps one of the most significant principles that Carroll identifies is to extend across media platforms, stating ‘it would be foolhardy to suggest that the future has no place for TV. TV is the most powerful medium invented by man. But certainly TV needs increasingly to be part of an integrated media strategy that extends across platforms. And not all ideas need start in a 30-second TV script.’ This idea has been acted upon in the overall agency model at BBH, which in recent years has seen the creation of a ‘ZAG’ a branded content division, and an in-house digital agency. Cappo (2005) discusses the need for integration within agencies, which has seen the return of media planning within larger creative agencies, and the introduction of communications planning, allowing for integrated solutions to come from under roof. Cappo states ‘agencies must demonstrate that “Media-Neutral” is more than a pious 29
  30. 30. 20510556 Vic Davies platitude.’ This topic of discussion has arisen throughout this report, through the work of Elms (2007), the IPA, and the argument for a new model of advertising; however it will become more apparent through the primary research conducted as to how agencies are adapting within an era of rapid media fragmentation and desired engagement. 8.0 :- Summary of Literature Review The Literature Review has initiated a response to the thesis of this paper, and established a trend of key findings, focusing around the area of media selection. The argument for change has been evidently supported by many authoritative voices from the communications industry, perhaps most relevantly from research conducted into both the growth of digital/technology and the development of the knowledge economy. The literature indicates that consumers are becoming more sophisticated and therefore engagement is the key to building successful brand relationships. However, the most relevant and significant evidence and findings are yet to be established, and so primary research is the next stage in establishing the advertising industry’s attitude towards the age of engagement. Although this may now be considered as a dated source, Prue (1998) discusses models of advertising and illustrates how important it is that the ‘advertiser, agency, and researcher…are all using the same language and can agree on common objectives’ a statement which the review has supported. The Literature Review has allowed for grounding on the topic of engagement to be outlined, therefore acting as a guideline for the research methodology and next stage of this paper. 30
  31. 31. 20510556 Vic Davies 9.0:- Research Methodology Owing to the nature of the thesis for this paper and the objectives set out, it is evident that an inductive approach has been adopted in relation to the primary research that will be conducted. Gill and Johnson (1997) suggest that ‘induction involves moving from the ‘plane’ of observation of the empirical world to the construction of explanations and theories about what has been observed.’ The right hand side of the experiential learning cycle developed by Kolb et al. (1979) relates to the area of inductive research, and can be found below: This can be supported through the fact that much of the research conducted has been based on subjective knowledge, whereby interviewees have expressed their views in the form of a personal understanding of the matters discussed. Sutton (2001) discusses the 31
  32. 32. 20510556 Vic Davies area of ‘Subjective Knowledge’ and states ‘The approach that I am advocating might be termed the subjective viewpoint. In it, all knowledge and understanding arises out of an individual's experience, and in that sense is inherently in terms that are private, personal, and subjective.’ In order to ensure that this report is of an authoritative and respectable nature, it is important that professional and expert voices were used as means of primary research. They have a greater understanding of the topics discussed than the general public; therefore selection is a key factor. Another key factor of this report that differentiates it from many other academic papers is that the assistance of questionnaires and focus groups have not been used, as the paper is a focus on the change in agency structure and not a topic of discussion that the ‘general’ public will have much of an understanding of. Considering that these two research methods have not been used, it would not be prudent to assess their qualities; however it would be more beneficial to focus on interview techniques which are more relevant to this study. In order to establish a significant idea of what interview technique was most suitable for the collection of valuable insight for the completion of this report, a pilot study was conducted. The pilot study took place in August 2007 and therefore was only based on some information drawn from the literature review. It was put across to two industry professionals in the form of a face to face interview and a phone interview to assess which method would be more practical for the main research stage of this paper. In light of the pilot study conducted, triangulation was used to establish a difference in 32
  33. 33. 20510556 Vic Davies perspective from two professionals sharing similar roles. Jankowicz (2000) states ‘The rationale for triangulation is expressed well by Kane, who represents archival review, questionnaires, interviews, and participant observation as potentially overlapping.’ Owing to the diversity of topics within this study, it would not have been practical to conduct a pilot study involving experts in all of the areas discussed. Jankowicz (2000) states ‘You’ll need to allow time for the arranging of visits to various information centres, commercial and academic libraries, and interviews with key informants.’ The pilot study is not the main focus of this paper and therefore authoritative voices on the areas discussed should only be approached when a thorough understanding of their topic is developed. Having stated the difficulty in sourcing authoritative voices, the pilot study simply acts as a guide to the best interview technique to use, and as a determiner to what key areas of thought should be examined. The initial pilot study resulted in the face to face interview technique being chosen for further research, however owing to the nature and the topic of discussion within the literature review, a blog and Facebook group was also used to obtain information from certain experts in the industry. The pilot study and literature review both suggest that blogging is a strong new media tool, and therefore should be capitalised on throughout the research process of this dissertation. The transcripts and more information regarding the pilot study can be found in Appendix 2. Although much of the research and discussion of this report derives from the corporate strategy in effect at BBH (Bartle Bogle Hegarty) London, this is not a case study on a specific advertising agency. The introduction of engagement planning at BBH has been 33
  34. 34. 20510556 Vic Davies referred to throughout, however the thesis of this report indicates no specific agency, and therefore a variety of advertising agencies have been mentioned throughout this report, and engagement related strategies identified from each. The concept of ‘lateral thinking’ has been applied to this study, Edward de Bono (1971) states that ‘it is not possible to dig a hole in a different place by digging the same hole deeper…vertical thinking is digging the same hole deeper; lateral thinking is trying again elsewhere.’ A selection of agencies and individuals has been approached for interviews as a means of reducing a vertical approach and widening the research process. Brown (2006) suggests ‘There must be a clear logical path from the aims of the research, to the original concept or model, to the evidence which has been gathered, to the analysis of that evidence, to the findings.’ In order to provide coherence throughout this investigation, the original research objectives have been shortened to form chapter headings and each topic of discussion will be further examined through primary research. A list of contributors to different chapters has been included below, as a guide to identifying authoritative voices on all subject areas. The list covers the topics outlined within the literature review and the proposed chapter headings for primary research (see Appendix 3), some candidates covering more than one chapter in their information provided: Contributors to: What is Engagement? Tom Morton, Executive Planning Director – TBWA London Martin Porter, Head of Voice – CBS Outdoor Andy Cairns, Head of Account Management – TBWA London 34
  35. 35. 20510556 Vic Davies John Wright, Managing Director Toyota and Lexus Europe - Saatchi & Saatchi Contributors to: Change in Agency Model David Pattison, CEO – ILG Digital Charles Faircloth, Head of Account Management – McCann Erickson John Wright, Managing Director Toyota and Lexus Europe - Saatchi & Saatchi Contributors to: Change in the Knowledge Economy Tom Morton, Executive Planning Director – TBWA London Paul Feldwick, Ex-Worldwide Planning Director – DDB Andres Claudio, Vice President – Universal McCann Puerto Rico Contributors to: The Impact of Technology and ‘Digital’ MT Rainey, Founder –, Chairman – TH_NK Simon Kershaw, Executive Creative Director - TDA Charles Faircloth, Head of Account Management – McCann Erickson Jorian Murray – Founder - Dye Holloway Murray David Pattison, CEO – ILG Digital Contributors to: The Future of the Industry Jorian Murray – Founder - Dye Holloway Murray Andy Cairns, Head of Account Management – TBWA London David Pattison, CEO – ILG Digital 35
  36. 36. 20510556 Vic Davies The Pilot Study conducted at Saatchi & Saatchi London led to a number of observations that influenced the design pattern for the primary research stage of this paper. The interview firstly identified stronger areas of interest from an agency perspective in relation to engagement, deeming some original areas as irrelevant to the topic and therefore not worth pursuing in the literature stage of this report. Secondly, it became apparent throughout the interview that as the questions were quite interlinked, a discussion occurred more than an answer to the questions, provoking detailed responses and general thought on the area of engagement. This observation has indicated that it might be more productive to initiate a general discussion based on the findings from the literature review rather than asking leading questions. Carson et al. (2001) examines the role of individuals in focus groups, however many of the observations regarding ‘discussion viewpoints’ can be applied to interview situations also. Carson et al. state ‘Questioning knowledge is better focused on positive critique and reflection through vigorous and penetrative discussion of core aspects of programmed knowledge inputs…participants bring their own experiential knowledge to the discussion and it is important that this is utilized positively.’ The role of discussion is vital in allowing interviewees to talk about what they deem relevant, and not respond to what might appear to be a leading question. Other observations from the study included demand characteristics and confidentiality, not suggesting that the interviewee was trying to be perceived as different to how they are, but the answers given and discussion reflected how the agency represented would tackle the engagement solution. Leary (2004) states 'Demand characteristics are aspects 36
  37. 37. 20510556 Vic Davies of a study that indicate to participants how they should behave. Because many people want to be good participants who do what the experimenter wishes, their behaviour is affected by demand characteristics rather than by the independent variable itself.' Brown (2006) advises that interviewers should ‘Offer confidentiality and anonymity, and mean it. Do not disclose who your participants are without specific permission to do so. If they have provided you with information that is personal and/or private, they must be given genuine assurance that the information will be protected and they will not be identified as the provider of that information.’ This ethical matter became quite apparent throughout the pilot study, in that many statements were told ‘off the record’ to protect clients and therefore it would definitely be considered as important to offer confidentiality and anonymity. This will be offered to participants once the publication has been examined and before its distribution to third parties, outside of Buckinghamshire New University. The interviews conducted and Facebook Group discussions for the primary research stage of this paper took place between February and 29th 2008 and April 16th 2008, this deems all information obtained highly valid in terms of date at the time of submission. All transcripts and responses however have been removed from the appendices for confidentiality purposes. 37
  38. 38. 20510556 Vic Davies 9.1: - Critique of Methodology The main methodological approach adopted for this paper worked relatively well and encouraged in-depth qualitative information. It had been identified in the pilot study that face to face interviews were the most effective means of collecting information and thus should be used throughout the primary research process. However, after much consideration it was decided that research conducted on chapters regarding ‘The Knowledge Economy’ and ‘The Impact of Technology and Digital’ would benefit significantly from using online resources. Considering that one key emergence (identified within the literature review) in an age of engagement was that of blogging, it was deemed significant and relevant to create a platform in the form of a blog for authoritative participants to respond to questions posted. The method acted as a benefit to participants as it meant they could answer questions at their own convenience and an online discussion could be generated. However, this method also lacked provocation and the ability to prompt a response from participants. The blog received no responses, and one participant (Andy Berlin) stated ‘I tried to answer your questions on your blog site, but after giving an answer to Q 1 I had to verify a "word" (which wasn't a word but a scramble of letters) then give a "user name" then assign a password, and that password had to have an html suffix.’ Therefore, a Facebook group was set up which did in fact receive qualitative responses from 3 participants. One interview of a face to face nature was conducted with MT Rainey for the chapter regarding ‘The Impact of Digital’, however it was found that much of the 38
  39. 39. 20510556 Vic Davies information obtained for this chapter and ‘The Knowledge Economy’ derived from interviews on the other chapters within this paper. The initial methodological approach was successful in practice, with information collected of an in-depth and authoritative nature. The risk in then changing the research techniques for the chapters regarding ‘The Impact of Digital’ and ‘The Knowledge Economy’ proved relatively unsuccessful, however was overcome owing to the success of the other interviews conducted, and the information obtained from the Facebook group, which contributed to providing a coherent argument for the thesis of this paper. If a similar paper was to be written again, or hypothetically speaking if this paper was to be re-written then it would be most probably be decided that face to face interviews are the best possible means of obtaining in depth qualitative information. Face to Face interviews can be a timely process; however they demand an immediate response and encourage a sense of informality which can lead to interesting points being made. The use of online resources have great potential if executed effectively and efficiently, however lack provocation for response and therefore can be timely and ultimately costly to the final outcome of a research paper. 39
  40. 40. 20510556 Vic Davies Primary Research 10.0: - What is Engagement? The literature review at the beginning of this paper identifies the difficulty in defining the term ‘engagement’. It has become quite apparent that ‘engagement’ is a term that has multiple meanings; dependent on the context in which it has been used. To ensure that a well-rounded view on the term has therefore been put across throughout the findings of this paper, both a media and an advertising expert were interviewed to distinguish the key differences of the term in its meaning within their respective sectors of the communications industry. One key observation that has been made throughout the process of this study is that of the heritage of the term ‘engagement’ a process deriving from an ‘age of interruption’. However, it has become apparent that a naivety exists amongst certain members of the communications industry that ‘interruption’ and ‘disruption’ are one in the same. This would act as a problem for the likes of TBWA who preach and philosophise ‘disruption’ on a daily basis. Therefore, it would not be prudent to continue this paper in a manner that accepts interruption and disruption as the same process. In fact, Cairns (2008) states “Disruption is actually not a process or a model, in the broader sense it is a philosophy and it is an ethos.” Cairns then continues to explain that disruption is not about disrupting people’s lifestyles, but creating change. In order to identify and pinpoint what engagement is, there is most evidently a need to distinguish a clear difference between interruption and engagement. Porter (2008) claims 40
  41. 41. 20510556 Vic Davies “Advertising by its very nature is interruptive.” However, this does not necessarily mean that some advertising is not engaging, due to its very nature reflecting a ‘dated’ process. The definition debate has been fought strongly by both Martin Porter who has argued for the media agency and owner, and Tom Morton who has just as significantly represented the advertising agency. Porter firstly suggests that “There is a fine line between advertising engagement and media engagement because a lot of the stuff that is considered engaging: is it just because it is creatively engaging?” This statement supports the work of Ephron (2006) who claims ‘Media engagement and advertising engagement are different things.’ In relation to advertising and the creative idea, Porter says “engagement tends to be entertaining; we don’t want to be bored by stuff.” Morton states “The engagement model is basically are you interesting enough to catch people’s attention, rather than are you loud enough to buy yourself into people’s lifestyles.” In terms of advertising engagement, Porter and Morton have a similar view of what engagement is; a process that requires entertainment and interesting ideas, however this does not necessarily mean that their perception of engagement as a communications process is the same. This debate has somewhat stimulated an altogether bigger issue; is media more important than creative, or bigger still; whether or not context outweighs content in terms of engagement? Porter and Morton both agree that a paradigm shift has occurred, however Morton states “I think engagement at the moment in our industry is more of a principle; it’s almost something we try and do practically and distinctively rather than try to re-define the rules of how brands communicate.” This notion of engagement being a principle that is carried 41
  42. 42. 20510556 Vic Davies out practically and distinctively almost suggests that it has come about through an evolutionary process, and not just as a ‘new business’ tool or a topic which has purely been used to signify some sort of development in the communications industry. Morton understands the need to evolve and for agencies to approach change in a hands on manner. “It’s that marvellous quote from William Gibson he said ‘the future is already here - it is just unevenly distributed.’ The classic advertising model was developed for a past generation of people quite new to being consumers; it comes out of Madison Avenue.” Morton appreciates engagement and change in the industry as a derivation from the evolution of the consumer and the impact of new age media. One key observation made by Porter refers back to the discussion of how Maslow’s Hierarchy of Needs has progressed within society, spurring a shift for engagement to be taken into consideration as part of the communications process. Porter claims “Messages are becoming more emotive which is partly from the advertising side but has to match the media. Advertising used to be purely about product claims, whereas now it is about emotive messages, we are too savvy.” This shift encourages advertisers to focus more on intangible ideals to allow for consumers to achieve periods of self-actualisation when making purchase decisions, whereas in a loud and intrusive era of interruption, product claims were made merely to encourage a sense of security amongst consumers. Throughout the shift from engagement to interruption, as previously identified, the conflict between media and advertising agencies has been quite apparent creating a virtuous circle around the subject of communications planning and what is best for clients. In preference of the advertising agency in terms of planning and the current state 42
  43. 43. 20510556 Vic Davies of the communications industry as a reflection of media fragmentation, Morton identifies the drawbacks of the media agency model. Morton says “Media agencies are in a very difficult situation because we can make suggestions and ideas that live outside paid media. Even the progressive people such as PHD, they are in a bit of a pickle because what do you sell if your audiences are spending most of their lives outside of TV.” The ‘growth of digital = death of TV’ mentality amongst certain members of the communications industry (not that Morton expresses himself) has also encouraged the creative versus media debate to expand, once more perhaps as a reflection of the emphasis on engagement in recent years. Porter expresses “I think we have had to move into an age of engagement, where people are thinking of easier or better or cleverer ways of targeting people.” Once more, this statement encourages the notion of engagement being relevant to the topic of media selection, in the suggestion of targeting people, which gives media agencies great credibility. Porter claims “Media agencies are not brokering space anymore, they’re selling an audience.” However, this audience needs to be interested and involved with communications messages. Morton supports the change in media agencies, and says “Engagement is about wanting a great quality of viewpoint as opposed to a great quantity of eyeballs.” Perhaps the work of Elms, who discusses the importance of media selection as part of her views on ‘the media long tail’, is most significant to the current state of the industry in relation to engagement. Porter states “I’d like to say that the power is shifting more towards the media side because media is all about understanding the audience, consumer insight is king.” The debate on what engagement is will clearly never 43
  44. 44. 20510556 Vic Davies end, nor will it stop producing endless possibilities on how the industry should view the term. There is clearly a need to take into consideration both media and advertising perspectives in the process of defining the term, and after much research both of a secondary and primary research it is quite ironic that the best definition that sums up engagement as a whole, was identified in the pilot study for this paper with John Wright. Wright simply said “engagement is speaking to people in a way that they want to be spoken to at a time that they want to be spoken to.” This definition eliminates the battle between media and advertising agencies in defining engagement, and illustrates the importance of both processes. 44
  45. 45. 20510556 Vic Davies 11.0: - Change in Agency Model One fundamental change in the agency model over the last ten years, which was firstly identified in the pilot study at Saatchi & Saatchi and throughout both interviews at ILG Digital and McCann Erickson is that of the eradication of sitting in disciplines and the initiation of sitting in client teams. Wright (2007) said “I think what is fair to say is that the role of planning and creative need to work much more closely together than they have done historically and where possible account handling, planning and creative should work together and that means sit together, work together.” This initial thesis was briefly explored throughout the literature review, but perhaps overlooked through the emphasis on the fourth discipline at BBH, engagement planning. When discussing the agency model in its simplest terms at McCann Erickson, Charles Faircloth states “It is a conventional model in terms of ‘by department’ but the difference is there is an intention to bring the people that lead pieces of businesses, the account handling managing partner, the planning partner, and the creative partner closer together.” This shift has become quite apparent across the industry as a whole; as agencies are starting to appreciate that teams no longer work best on different floors, but in client teams where the collaboration of ideas and strategy benefits the creative process. Cassidy (2008) identifies discusses this change and how MindShare are restructuring to accommodate the needs of clients. Cassidy reports ‘The restructure merges 12 agency units into four: a client leadership group; a content creation unit, and a group created to handle online and offline trading.’ In terms of the digital space (and media space, given the nature of i- level’s business) David Pattison states “in terms of the model that we have here, it means that instead of having lots of separate compartments we have our planner/buyers, our 45
  46. 46. 20510556 Vic Davies search executives and our affiliate executives all sitting in teams working on specific clients.” One fundamental area that clearly needs to be addressed within the industry, in order to encourage stronger agency models is that of talent management. This means ensuring that talent in agencies is nurtured from an early stage and that employees are exposed to the creative process as a whole; not just one specific discipline. Pattison identified a key problem and perhaps a naivety addressing the issue of the creative process, stating “There was a whole debate in one of the trade’s recently about should creatives be presenting to clients, of course they should be presenting to clients because how on earth can you possibly get involved with the engagement process if you are not even engaging in with the client that you are talking to.” The need for collaboration of agency disciplines is once more highlighted in the argument put across by Pattison and a shift from rigid structures and discipline hierarchies should be encouraged if engagement is to be improved. Faircloth states “I’m a big believer in creatives being involved with every decision with the client, that’s how Chris MacDonald (CEO) operates.” This statement opposes the work of King (1969) in his illustration of the evolution of the traditional agency. King’s description of the three main disciplines (see Chapter 4.0) shows a clear divide between Account Representatives, Creative, and Account Planning and no reference has been made to any discipline having contact clients other than Account Representatives. Perhaps it would be prudent to create a revised version of the three main disciplines which would take the form of a Venn diagram, illustrating the overlap of the three 46
  47. 47. 20510556 Vic Davies disciplines as the industry currently stands. One noticeable change within the industry that addresses the overlap of disciplines now is that of the way agencies now recruit graduates. Faircloth, in his role as Head of Account Management says “What we have started to do is to bring in graduates, not to be hired by discipline, but to bring them in and kind of work out whether they are better aligned to account management or better aligned to planning.” This supports the work of Sirkin who discusses communications planning and argues that the traditional model is no longer effective, through training staff in such a manner that their personalities are almost matched to an appropriate discipline. It is evident that graduates are able to develop a greater appreciation for the agency business and how it has changed to allow for greater synergy and integration amongst disciplines. Throughout the research conducted it has become more and more obvious that change in the industry has been heavily influenced by risk-takers, and the agencies that are not prepared to experiment and learn from their mistakes are often those that miss out on new business. Pattison and ILG Digital signify change for the better and not just for change’s sake; and illustrate that it is not just agencies that have got to take risks but also clients. Pattison states “I don’t believe as an industry we lead anything, what we do is we follow our clients and I think the agencies that do best are the ones that are listening and then react the quickest.” This had led to the recent boom in start-up agencies such as Adam and Eve and Dye Holloway Murray who in a sense are defined by their client’s business. Meskauskas (2007) illustrates the issue of agency compensation in the communications industry which provokes change but at a great cost to agencies, he argues ‘Clients are 47
  48. 48. 20510556 Vic Davies demanding more sophisticated services, but they are doing it while insisting on lower rates of compensation.’ This problem has led to many agencies facing huge problems, whether to change at a cost and change the traditional model or to remain faithful to the successful years and work harder to justify cost to clients. Pattison says “Some clients are terrific in that they are willing to learn from their mistakes, and other clients are pretty risk averse…clients are prepare to learn with us.” The change in agency model has been more of an evolutionary process over the last 40 years and the agencies that have done it successfully have been the ones that have been willing to take risks and break the mould, which has led to the decline in billings for more traditional agencies with rigid structures which have struggled to adapt. In relation to what BBH have done as a reflection of engagement and if whether more agencies will adopt a similar approach, Pattison says “I mean the creative agencies have been very, very slow to embrace these things and its maybe because they are structured in a way that it is hard for them to embrace these things.” 48
  49. 49. 20510556 Vic Davies 12.0: - The Change in the Knowledge Economy John Grant’s observation and discussion of the work/learning/leisure mix may only be one topic that has influenced an influx of discussion regarding engagement over the last few years. However the development of the knowledge economy has certainly been a large factor, and one that questions the effectiveness of other contributors, such as media fragmentation. When questioning Tom Morton on what he deemed more forceful on creating hype around engagement between media fragmentation and the development of the knowledge economy, he suggested that they both come together. Morton states “I think it’s a really good observation. John Grant talks about the Flynn Effect and the fact that we are getting cleverer and basically shouting at people is a way of dealing with the masses. If you look at the psychology of interruption campaigns it is based on Freudian behavioural psychology.” Morton argues that because of the influx in new media and the development of the knowledge economy, consumers want more of a story than they have typically wanted in the past in a quest for strong brands. One key author who Morton identifies as bringing the two entities together is Steven Johnson, author of ‘Everything bad is good for you.’ Morton claims “His version of media fragmentation is slightly different, this is where your point about knowledge economy and media fragmentation comes together, and he said that in the past entertainment was designed to be consumed in mass audiences probably once and without thinking about it too much.” Because of the state of the media landscape thirty years ago, when there were very few commercial stations, television used to have to have a wide appeal and not be too difficult, and one key example of this is that of Dallas (the television programme). However, as the media 49
  50. 50. 20510556 Vic Davies landscape has expanded and new channels have developed, there is now a need to reduce appeal but increase depth. Morton argues “Actually what is happening now is not only is there fragmentation, but what fragmentation throws up is smaller, more intense audiences.” Ultimately Morton identifies fragmentation as just another word for diversity and evolution; this cannot be prevented and should not be challenged. Claudio (2008) supports the views of Morton in that he recognises the distinct relationship between media fragmentation and the knowledge economy, suggesting that the knowledge economy is challenged through media fragmentation. Claudio states ‘Today's society lives under millions of fragmented messages in all kind of media vehicles or connection points. Therefore we could say that the knowledge economy is in constant challenge.’ Claudio offers a culturally alternative perspective, from his position as Vice President at Universal McCann Puerto Rico, encouraging the notion that the need to engage with consumers and appreciate the development of the knowledge economy and the impact of media fragmentation should be taken into consideration on a global basis, not just in the UK. This finding also reflects the work of Namiranian (2006) discussed within the literature review. Namiranian focused on brand and media engagement amongst teenagers in emerging markets, a report which ‘demonstrates how market researchers empower companies to shape future strategies for innovation and growth.’ The paper indicated a change in media consumption amongst teenagers in China, Russia, Brazil and Mexico and suggested a high influx in engaging media. Not only does Namiranian’s work support the growth of the knowledge economy but also identifies the apparent link between this growth and media fragmentation. 50
  51. 51. 20510556 Vic Davies Perhaps as a result of the nature of his ex-global role at DDB, Paul Feldwick also gives a culturally neutral perspective on the changing media landscape. Feldwick (2008) states ‘There's a common fallacy that the growth of new media (principally meaning the internet) has changed the amount and the way people use existing media. There's no evidence I know of that this is true, except in very functional ways like they probably don't read Exchange and Mart so much any more.’ This comment identifies a naivety that exists amongst the communications industry relating to the impact of media fragmentation on traditional media. It has become quite apparent that a minority of industry professionals discuss the growth of digital and new media in a way that creates a seesaw effect, creating a decline in traditional media. Media fragmentation simply allows people to change their media diet, and consume media in different ways; this may mean for example that although someone is messaging a friend online they may also be watching television at the same time. The development of the knowledge economy allows people to use new media and alter their media diets; it does not however disregard traditional media in an era of engagement. As a consequence of media fragmentation, traditional media (although in context will remain the same) has to develop and engage more in terms of content. The over-hanging context versus content debate slightly favours the latter in relation to the knowledge economy, encouraging content providers to improve levels of intensity. The increasing discussions surrounding communications tools such as semiotics also exist as a potential reflection of the impact of the knowledge economy on the communications industry. In relation to the work of Valentine and Gordon, discussed in the Literature Review of this 51
  52. 52. 20510556 Vic Davies paper, semiotics is a development in the marketing communications industry that can encourages consumers to relate to brand values through basic symbols. Feldwick (2008) suggests ‘On the plus side, 'semiotics' has been one strategy for legitimising discussion of symbolism, metaphor, and non-verbal communication generally in an organisational environment increasingly dominated by verbal, rational discourse.’ Feldwick’s perception of semiotics encourages the notion that it allows brands to communicate effectively and almost instantaneously in an era of mass media messages. However, Feldwick also argues that semiotics misses the point of advertising stating ‘analog communication is fundamentally not about meanings, but relationships.’ It can therefore be suggested that although the development of the knowledge economy has provoked advertisers to stimulate the minds of consumers, relationships also need to be established. 52
  53. 53. 20510556 Vic Davies 13.0: - The impact of Technology and ‘Digital’ Perhaps the foremost example of the impact that digital has had on the ‘age of engagement’ is reflected through the nature of some of the research conducted for this chapter and the previous one, through the form of a blog and through a group created on Facebook. The literature review clearly identified the growth of the World Wide Web as having a huge impact on the advertising industry; however it would be more prudent to explore this growth from the perspective of the industry. Much of this topic has been discussed with MT Rainey, who is a strong case to indicate which direction the industry is heading. Rainey, who founded a top 10 UK Advertising Agency in the 1990’s, is now CEO of a social networking site and Chairman of a fast growing digital advertising agency. Rainey states “I think now we have a different balance of engagement and interruption. Engagement has always been important in the interruption world, in a world of passive media consumption (which we are not in anymore). But now engagement is probably more important than it has ever been.” As stated in the literature review, the growth of digital and the World Wide Web has had a huge impact on the economy, and more recently on the television industry. Phillipson (2007) indicated year on year growth of around 40% for UK internet advertising, and in one recent article on the BBC news website it became quite evident how online services are generating greater advertising revenues than television stations. Cellan-Jones (2008) states ‘Last year, ITV's net advertising revenue was £1.5 billion. So, even if you just multiply Google's earnings by four and assume no further growth this year, Britain's biggest commercial television business - the original "licence to print money" - is about to be overtaken by an American upstart which only arrived in the UK in 2001.’ Rainey supports the growth of digital, 53
  54. 54. 20510556 Vic Davies considering that televisions are even becoming digitalised now, stating “I think the boundaries are definitely blurring. Ultimately it will all soon be digital.” One interesting observation made by Kershaw (2008) is that depending on the line of business people are in, perceptions will change surrounding the growth of digital and development of new technologies. Kershaw states ‘throughout the history of advertising, a new medium or new social trend or new technology tends to provoke one of two responses: (a) A sceptical "this won't really change anything” or (b) “OMG, this changes everything!”’. These two opposing views quite apparently exist within the advertising industry, and as Kershaw so confidently points out “Clearly, the nature of the response is often determined by the vested interest of the individual and/or company involved.” Rainey (perhaps from a vested interest) argues “how we are able to consume content, interact with brands, consume news; all of that has been transformed by digital and therefore we have a different model of receiving commercial information.” This suggests that perhaps Kershaw’s reference to a new medium/social trend/ or new technology cannot be applied to the growth of digital. In support of Rainey, Pattison would argue (again perhaps from having a vested interest) “online is 2 or 3 things, yes it is a medium, but it is also commerce, and its about peoples day to day lives and I don’t think that you could say that about any other media.” Online cannot therefore be ignored or be taken for granted, and agencies must understand that the digital space is key to improving levels of engagement and should accommodate change. 54
  55. 55. 20510556 Vic Davies One key change and trend that has occurred within the advertising industry, but not as an act of agencies specifically, is that of blogging, identified within the literature review. Cooke (2006) identifies the importance of blogging, and it has most certainly been a tool which planners have used obsessively in a period of required engagement. Rainey discusses the growth of the planning blogosphere but also re-iterates the benefit of using online as an alternative research tool. Rainey states “Online allows the planner to be more invisible in the process, but it is observational research it is not the type of research that is constructed to be highly valid.” With regards to agency attitudes towards the growth of digital and change in agency models Charles Faircloth identified digital as a discipline that has grown as a reflection of engagement, stating “obviously digital is an area that is the main provider of that sort of thing and certainly people short-hand ‘digital’ as the solution, but I don’t think it is the ultimate solution, I think it is one solution.” The mindset of Faircloth is shared by many in the communications industry, but as previously mentioned with regards to media fragmentation, a naivety exists that digital is the ‘only’ option for certain brands and forward facing strategy. Murray says “So the new media zealots are saying passive media is dead, so TV is dead, and they are saying that you have got to use interactive media. I think all that is a load of bull, I think what agencies need to do to engage is about the thinking, rather than being obsessed by one channel over another channel.” Murray’s media neutral approach to communications eradicates the ‘digital-bias’ attitude adopted by some of the industry’s professionals, and once more supports media fragmentation as creating a change in the mix of media consumption and not a decline in traditional mediums. Rainey says “I think digital consumption of information is fact of life, I don’t think it is a technique.” It has become 55
  56. 56. 20510556 Vic Davies quite apparent that the impact of digital has been highly significant to the current and future state of the economy and advertising industry, however this does not mean that traditional media should not be considered and as Rainey emphasises “the smarter agencies are putting the consumer (or what digital agencies call the user) at the heart of their offering.” 56
  57. 57. 20510556 Vic Davies 14.0: - What is the industry doing? Murray (2008) gives a strong indication as to what way he expects the industry is going, in relation to the nature and age of his business. Murray spent most of his working life at DDB London; therefore the structure of his start-up agency would surely be a reflection of how he views the industry and what is required from a new agency. In contrast to the perspective Murray offers this paper, Andy Cairns prior to returning to TBWA London spent a significant number of years working at Taxi in New York, encouraging a culturally influenced opinion of what the industry is doing in the UK, almost as a comparison to the models which exist in America. Murray and Cairns share a similar viewpoint on the industry’s response to engagement, both of whom suggest that the industry tries too hard to fight change and adapt. Cairns says “I think what’s needed from the industry is for the most part; they need to stop trying to fight that shift.” Cairns explains that although it is easier said than done this has actually been the case in the industry; too many agencies talk about change but find it difficult to enforce it, this encourages clients to seek specialists such as PR and digital agencies over traditional advertising agencies. Murray shares a similar view in that he feels agencies need to change the way they approach media and strategy, stating “My beef is that the industry talks too often about channel and how they are going to force messages through different channels and how they are going to force people to engage with different channel.” Both of the views shared by Murray and Cairns almost suggest that large agencies are under threat with the industry as they are not as open to change as small, independent agencies. 57
  58. 58. 20510556 Vic Davies As a past IPA President, David Pattison was often exposed to the problem of change within the UK advertising industry, and understands the need for agencies to evolve and adapt according to client’s needs, should they wish to survive. Pattison states “One of the things that I found when I was at the IPA was that there is a world outside of the top 15 creative agencies and the top 10 media companies and there are some really smart businesses out there that are doing really good business. So I read in the trade press every week that our industry isn’t moving fast enough, it is but it’s not in the top 15 creative agencies or the top 10 media agencies.” As previously mentioned the recent boom in start-ups has given clients an alternative option to traditional advertising solutions, which seems to have taken credibility away from large agencies. Wright (2007) states “If you look back over the last 5 to 7 years there has been a definite trend towards smaller, independent agencies and I think that is exactly what it is – I think it is a trend. All clients like to feel as though they have a group of people in an agency who are all over their business and from that point of view I guess smaller agencies are better.” It appears that not only are smaller agencies more reliant on clients’ business and therefore closer and more involved than larger agencies may appear to be, but also they are in a position to challenge the conventional models and disciplines executed by traditional agencies and physically illustrate change. DHM (Dye Holloway Murray) discuss the term ‘organising ideas’ as opposed to the ‘big idea’ philosophy practiced by many of the advertising industry’s largest agencies. Murray says “the reason we call them ‘organising ideas’ as opposed to the ‘big idea’ is that we feel that we should deliver to clients communications platforms/ideas/messages that they 58
  59. 59. 20510556 Vic Davies can use in all parts of their business as opposed to developing an ad idea that works in advertising.” Murray justifies the new model in practice at DHM through his experience of the old model whereby advertisers ask consumers what they want from a brand and then present the brand in a certain manner, Murray suggests “we don’t think that is relevant anymore because consumers are too sophisticated.” DHM identify truths behind brands and then celebrate that truth through a variety of platforms (non-bias) to ensure that consumers are not simply overloaded with unwelcome messages but are challenged to appreciate brand character. Cairns is also big on agency philosophy and believes that the best agencies are the ones that apply their way of thinking at the beginning of the creative process and not just in the case study following a campaign. In relation to the disruption philosophy at TBWA as opposed to the philosophy in practice at Taxi (his former agency), Cairns says “I think that in terms of delivering engagement it can always be more effective. I think it’s wonderful as a new business tool but I’d like to see it used more effectively across every corner.” Although the research conducted suggests that larger agencies struggle to change, TBWA appears to defy this law; principally through the very nature of the philosophy at the core of the agency. The disruption model embraces change and encourages engagement, however it also acts a clear indication that agencies need to follow a specified way of thinking that allows for change in order to survive. In response to the engagement planning discipline at BBH, Murray does not think that engagement planning should be viewed as a fourth discipline; “what we need to be doing from day one is ensuring that everything we do engages. You do it automatically.” There 59
  60. 60. 20510556 Vic Davies has been much hype around the term ‘engagement’ and perhaps that is why BBH have chosen to capitalise on the term in an attempt to create added value, however it appears that most agencies view it is as a natural element of successful strategy. Cairns states “The discussion of the age of engagement vs. the age of interruption has been around for a while. So, engagement I think should be in all the work I do, I think the battleground has shifted to the how.” Another key instance of change in the advertising industry is that of media fragmentation (as discussed with relation to the impact of digital). Murray “I think media neutrality is important but you’ve got to have an idea that permeates through all of the company’s behaviour not just one channel.” Many agencies have struggled to adopt a media neutral reputation, based on their loyalty to in-house media production units and media planning facilities. However, media neutrality is clearly an issue that the industry is trying to address and encourage. Cairns says “I think it should have always been important because otherwise you are always getting to the solution before the problem.” The industry is experimenting in many ways to find ‘the new model agency’ however it appears this model changes on a weekly basis, and to find a perfect model will be difficult in an industry of quick change and rapid fragmentation. Many agencies are adapting the old model to try and attract clients and illustrate greater ROI; however the stronger agencies seem to be those who embrace change on a daily basis as part of their philosophy. Cairns states “I think at the moment in marketing and communications to stand still is to die, so many people are changing and doing clever things.” The industry is clearly approaching issues such as recruitment and agency models as a means to 60