Archive for September, 2010

Client and Agency relationships

The ANA teamed up with the Advertising Week group to put on a great panel discussion about client and agency relationships.

One thing that struck me right away was how many times agency people kept using the word “partner” to describe the relationship.  It was almost never used by the CMOs on the panel. “Clients more and more are buying projects, not relationships” said one agency executive.  In response, one CMO said, “We are looking for relationships but we do date on the side.”

From the client side the word that stuck out was “team”.  The CMOs spoke of their agencies as vital members of the marketing team, with enormously valuable contributions.

Clients need agencies.  They need them for many reasons.  But the role that agencies need to play is changing faster than the mindset of many traditional agencies and holding companies.   The irony is that agencies are valued by clients as agents of change.  But the most difficult change for agencies is often internal.

Another thing that struck me were the very different perspectives.  At times I got the impression that the agencies were having one conversation and the clients were having another conversation altogether.  Yes, the agency executives pointed to the rapid turnover in CMOs as a core problem.  On the other side, Roger Adams observed that agencies don’t see enough of the whole marketing picture.  It is up to the CMO to watch the priorities and know who to bring to the table at the right time because marketing has become so complex.

Even so, most marketers still don’t have it figured out.

Many of the panelists held up P&G  as a model for how to successfully bring together everyone at one table as part of one team.  The difficulty of the challenge was evident when at least 2 people mentioned that P&G “forced” their agencies to work together.  And it also required P&G to reinvent marketing within their own company.  Susan Giannino said, “It wouldn’t have worked if P&G didn’t make organizational, process and methodological changes.”  Which really does get to the heart of the matter.  Marketing needs to be reinvented.

The traditional brand positioning approaches have broken down.  The advertiser/agency model has broken down.  The textbooks are out of date.  What people learned 10 years ago is about 11 years out of date.  The agencies don’t have the resources to solve the complexity of the problem.   Most Business Schools are overlooking the extent of the problem and not developing new models or theories (Professor Gerry Wind of Wharton raised the alarm about this a year ago in an editorial he co-authored).

As one panelist said, this is perhaps the greatest, the most exciting time to be in marketing!

My perspective — the companies who are doing it successfully are essentially reinventing marketing by themselves.  In addition to P&G, I would add McDonald’s, Samsung, Coca-Cola and BMW.

Judging by the size of the crowd, the ad business is in good shape

The lines to get into the Times stage went down one staircase and up another, wrapped around the room, nearly staggered out the front door.

The line at Advertising Week, part 1

The line at Advertising Week, part 1

The line at Advertising Week, part 2

The line at Advertising Week, part 2

Coca-Cola and BMW on reinventing marketing

Yesterday’s panel moderated by Stuart Elliott was particularly good.

If there is one thing to take away from that panel, if there is one priceless thing, it is the need for Client to take control of their branding and for them to orchestrate of all the agencies themselves.  That means the client needs to have an internal structure and resources.  They need to reinvent marketing.  They need to develop models of marketing unlike anything that ever existed before.

And it means that each agency must play well with the others.  They must collaborate and cooperate and be transparent.

As the communications landscape becomes more complex and new technologies mix up the world faster than anyone can strategically comprehend. No single agency can possibly serve the needs of an advertiser. They rely on 5,6 or 7 different agencies, buying a la carte. The CMO needs to know many disciplines since they now have to integrate the various silos.

Pio Schunkur, SVP of Integrated Marketing at Coca-Cola, made the following observations.  These are almost all direct quotes:

“Marketing today is non-linear.  How do we really begin to understand that and to structure around it?”  Clients have to knit it together themselves.

“No one agency can do it all for us.  So we have to create an infrastructure in-house, a center of expertise in-house to create and manage the expression of our brand.  We are not replacing agencies… We use agencies a la carte”

“The structure of the marketing group impacts the strategy.”

In response to a question from Stuart Elliott about how Coca-Cola deals with so many different processes from so many different agencies, Pio responded, “The agencies need to be controlled from our side.”

“Every good brand is about story telling.  The difference is that we are now telling the story in different places.”

The group responsible for began several years ago and one of their major challenges was to push the agencies to collaborate.

Patrick McKenna of BMW had many similar observations.

[Between CRM, PR, advertising, mobile] we have to work with 5 to 6 different agencies.  We want the agencies to work together and to integrate.  All parties need to work together.”

“Each car launch is a cross-collaborative process.  The agency partners put the ideas together.”  The agencies are expected to work together to develop and vet ideas before presenting to BMW.

“Sometimes the role of the client is to be the referee.  Clients have to referee between two agencies to make sure that a great idea lives on.”  So there are times when BMW has to force the issue but that is not often.”

From the media side, we heard Greg Coleman of The Huffington Post observe the way agencies are blurring their roles and trying to stay in the game. “We are seeing PR agencies getting into the branding area.  We need clients to be the referee.”

Of course Elliott’s sense of humor and skepticism is never far below the surface.  When McKenna said that advertising is storytelling, Stuart Elliott responded, “Fairy tales.”

My trust in Blagojevich is renewed

Mea culpa.

I was wrong in my last post.  Blagojevich did show up at the Trust seminar this morning.  I arrived just after he left.

Now my trust in him is fully renewed!

Trust?

I came to the trust panel at advertising week to see the former governor of Illinois, Rod Blagojevich. But he wasn’t here.

So much for trust…

Advertising week

It’s Advertising Week in NYC.

A time to celebrate and learn and hang out and look for great new talent that we can hire…

This just in! Recession ended in June 2009! Extra! Extra!

In case you missed it, the NBER has officially decreed the end of the Great Recession and dated it to June 2009.  It’s the end of the recession as we know it!

Whew!  Time to open the champagne bottles!

So does this mean companies are back to “normal”?  Back to business as usual?  No.  Not even close.  The downturn was steep and long.  Of course there is a difference between the end of a plummet and a robust growth cycle that takes us to new highs.  In fact, for many people and companies it doesn’t feel like the recession has ended at all.  To be fair…

…the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month.

Here’s the release in full.

The Recession Has Ended…sort of

The recovery is slow and uneven.  Some companies are winners and some companies are losers.  The ways that individual companies responded to the economic smackdown is now determining how well they are recovering.  In the initial drive to cut, cut, cut in 2008, many companies cut too far or cut the wrong things or missed an opportunity.   Others took a more strategic perspective to reinvent their marketing.

Examples:

McDonald’s vs. Burger King

Apple vs. Dell

Samsung vs. Sony

Hyundai vs. GM

The slow growth/no growth economy we are in today means that the marketing lessons from The Great Recession are still valid and relevant today.  Too much capacity, too little demand.  Demand is slow.  Demand is low.  Business will only recover when there is stronger demand.

It is a perfect opportunity for companies to use their marketing to gain competitive advantage.  Marketing is about generating demand, about shifting demand from their brand to our brand.

This is a time when strong marketing approaches can pay off.  It is also a time when many executives will be cautious.  So the question ahead — which companies will reinvent marketing and which ones will play it safe?

One key indicator — companies are making more profits (up $224 Billion in Q1 and $41 Billion in Q2) while holding down the size of their workforce.


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