Advertising and marketing may be changing thanks to the arrival of Web 2.0, but the task of the advertising agency as idea generator, expert communicator and persuader has never been more important
- Showcase #1: find creative independence
- Showcase #2: doing it for the whanau
- Showcase #3: roping the big one
- Showcase #4: change the only constant
In a year that saw the meteoric rise of Twitter and the undisputed dominance of Facebook as the social networking site of choice, the success of a brand or product seems to be at the mercy of the connected consumer. One negative tweet can turn into a raucous morning chorus and a company’s hard-fought reputation is pecked to shreds.
On the flipside, all it takes is a Facebook update about a cool new phone, café or movie and its popularity can rapidly circumnavigate the globe.
The expansion from more traditional forms of advertising to online, viral marketing, digital media, mobile advertising and PR stunts has forced ad agencies to think harder to come up with more diverse and flexible campaigns with ideas and stories that can find expression across all of these media.
In a recent blog, John Bell of 360° Digital Influence says the channels are heading in two directions. “Anyone in or around the ad business knows full well that clients and agency folks love ‘a big idea’—a clutter-busting concept that rises above the others in the brainstorm, the one that seems to spring multi-channel executions like a post-apocalyptic centipede. Big ideas have been the traditional response from advertising over the years to grabbing people’s attention.”
But social media doesn’t lend itself to the big idea, he says. In social media, iterative evolution that is responsive to what people want is more valuable than a big brand idea.
“Advertising-only ideas won’t succeed in capturing people’s attention,” says Bell. “Our trust has shifted too far for that. Our attention has become too precious. Those ideas that our friends email us about or post about on their Facebook wall will break through.”
This means more time is being spent on difficult-to-quantify elements like idea and concept generation that involves thinking even further outside the box. The result is a shift in the way agencies are charging for their services. Where once it was easy to charge commission on a TVC or print ad, fees are being attached to creative.
TVNZ last month controversially proposed to cut media commissions to ten percent. While this will upset the status quo and indeed many agencies will struggle, most people in and out of adland agree that:
a) the current model is anachronistic and only partially applies anyway
b) unfairly remunerates agencies for placing advertising, not creating winning comms strategies
c) is unlikely to survive the economic logic of where media is heading.
The new role for agencies—as ideas and communications specialists—will need a new funding model that consists of retainers, media rebates and perhaps even this crazy idea: fees for service rendered.
The trick is in the transition.
Responding to the TVNZ decisions, the president of the Communications Agencies Association of New Zealand, David Walden, warns of unintended consequences: the dumbing down of creative departments. “New Zealand has long punched above our weight in attracting top talent like Andy Blood, Nick Worthington, Toby Talbot and others. That’s why we have such a strong creative reputation,” he told Idealog sister publication Stoppress.co.nz. “But the knock-on affect of this move will be to reduce overall budgets, especially for creative work.”
Walden suspects that if clients were billed for the creative work alone, few would be prepared to pay sufficient for the top notch talent. We’ll see. Paying for ideas and advice works well for lawyers and accountants. Why not for advertising creatives?
TVNZ’s decision to extend the change to 2010 was a win for the ad agencies, and provides some cushion for those smaller agencies that have yet to work out a fees-based model.
One consequence of a change to the commissions system could be this: the true valuation of creativity. If retail noise works less and less in this social media age, then true creativity will earn its keep as it reaps rewards for clients.
For 2008, advertising revenue across all main media was $2.317 billion, down slightly on the 2007 total of $2.335 billion*
In 2008, online advertising accounted for 8.3 percent of all adspend, reaching an all-time high of $199.8 million. Given current trends, the figure should exceed ten percent for 2009, according to IAB marketing manager Alisa Higgins ‡
For the second quarter of 2009, online advertising grew by 6.5 percent to $52.5 million, from a first quarter figure of $49.3 million ‡
Display advertising in the second quarter of 2009 was up 26.5 percent over the first quarter, and 5.75 percent over the first quarter of 2008 ‡
* Source: Advertising Standards Authority, 03/09
‡ Source: IAB/PricewaterhouseCoopers Insight Report, from AdMedia 09/09