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The Net Takeaway: What value do Agencies provide?

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What value do Agencies provide? · 05/26/2007 02:34 AM, Marketing

One of the most difficult parts of being a part of the shift of media spend from old to new is working with agencies. Their entire business is changing around them, and like the travel agencies during the rise of Expedia et al., they are not learning from the past and adapting very well.

(Note: I’m focusing on large “traditional” ad shops. Direct marketing shops, boutiques, etc. all have their own problems, and I’ll deal with them another time.)

Of course, with advice like this, one can see why its taking them so long.

Scott Donaton is the publisher of AdAge, and so he’s biased. He sings the same song of the agencies since the 30s…

Agencies have always feared disintermediation, but in some segments of the business it will happen. They’ve got to stop the hand-wringing and figure out where they still add value and be confident of their abilities in those areas. Consumer insights. Creative ideas. Media strategies. Marketers will still need those. Yes, even when behavioral targeting and advanced technologies make it possible to serve the right ads to the right audience at the right time. It won’t all come down to technology.

Don’t Get Blinded by Google Envy

Here’s the thing, though. Are those really the areas that agencies should be investing in? After all, it may not all come down to technology, but a whole lot more will than he believes.

In fact, having seen what the tech can do at Yahoo! and Google, I do think that much of the human intelligence that agencies have waved for so long can be replicated and improved by modern approaches. Advertisers letting go of all their “old school” approaches and letting Yahoo! throw all our power behind a campaign can discover entirely new audiences and ways to get them involved in every aspect of a brand, in ways more enduring than TV and more impactful than print, radio, and other mediums.

But there is a huge missing piece, one that I’m surprised wasn’t mentioned by Scott Donaton. And from my vantage point, its the “killer app” where agencies can add value… and also the hardest to defend, of course.

What should they focus on? Emotion. That is the piece that the tech will miss. We can see all the behaviors and the things that emotion drives, we can track conversion and research and all the rest… but we won’t get at the underlying brand attributes in the head past the simple likes and dislikes, the logical decision making, the buy or no-buy calculus.

Agencies, when they work correctly, find ways to evoke emotion and change entire mental sets, not through logic, but through making you feel good about the field of dreams around a brand. We can help create that via the marketing and content we can create at Yahoo!, but we aren’t the experts at what makes the brand tick. We aren’t the experts at converting what the company making the products can pull off on their own (“we can extend the warranty to 90 days from 30!”) to a fictionalized and exaggerated lifestyle aura of the brand. Very, very few companies can do this on their own (Apple is an exception).

Agencies who live the brand will be the ones that survive the fallout. A focus on strategy and execution on the emotion around the brand, and showing how that drives the only behaviors that matter (purchase and proselytizing; purchase alone is too expensive to buy without getting a loyal convert) will be the area that the technology guys will fall flat on.

To do that, don’t you have to have Consumer Insights, Creative, and Media Strategies (to spread the word)? No, you have to be able to use these to work the brand magic, not necessarily own them. They are just steps on the road, but that’s a steep and winding road, and only a few are talented enough to convert the research into an approach, have creative which resonates, and get it into media in a way which attracts attention and effects affect (I couldnt’ resist that last one, its not the correct usage of the words, but it makes me laugh.)

Some agencies are starting to recognize that emotion and brand, even when you are selling via direct “cost per behavior” models. But even the best still think that TV is the center of their brand world, continually quoting that old chestnut: “A banner never made you cry”, usually followed by a reference to Kodak or Hallmark. And until they figure out that they are still trying to treat 1970s media approaches as the way to win in the 2000’s, they will continue to suffer.

So, Scott is right: Google and Yahoo! don’t care what businesses they kill or save, as long as they make money. And there are things the tech can’t do. So figure out what you can do that they can’t (hint: I did that for you) and turn your business that way. Then watch Google and Yahoo! work for you, instead taking work away from you.

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