February 15, 2006

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Why Ad Agencies Can't Respond to John Stratton's Warning Verizon Wireless CMO John Stratton went to Ad Age’s “Hollywood and Vine Conference and told the 400 ad agency poobahs what every client in American already knows -- the ad agency business is overwhelmingly focused on itself NOT on clients. His eight point indictment explicitly articulated what many clients have been thinking for quite a while. His points were … 1. Your clients are absolutely in trouble and they are looking for you to save them. 2. What you've been selling for the last fifty years no longer works. 3. Major marketing money is going to be in motion in the next decade and no one really yet understands exactly where it will land, if it even will land, or if it will just disappear altogether. 4. Before they figure out where to put their money, your marketer clients will hire and fire agency after agency, seeking someone, anyone, who can tell them where they might go next. CMO average tenure, already famously brief, will get even shorter as CEOs begin to recognize how much money they are blowing on antiquated media plans. 5. Your marketer clients are really seeking one thing and one thing only: An audience for the message they are trying to convey to the market place. 6. But your clients actually need more than just an audience. One of the consequences of the evolution of our media delivery systems over the last ten years is that the audience you do ultimately find is much less receptive to the message you're trying to send. 7. They are absolutely armed and ready to get to the content they want while avoiding the message you are trying to implant within it. 8. They need much more than an audience. They need an audience that cares about what they have to say. They need their message to be relevant to the audience they are saying it to. Yet the real question is not whether agencies can hear the message. The real question is whether they can do anything about it. Consider these points that suggest that agencies are so far out of alignment that they will NEVER BE ABLE to answer Stratton’s clarion call. 1. Agencies have very thin subject matter expertise. They know damn little about the business and even less about the interior structures and processes of their client’s businesses. Long shut out from strategic councils and often only linked to the Marketing Communications department, they just don’t know how the client’s business works, what the levers are or how to influence the demand drivers or the dynamics of the supply chain. 2. Agencies are in their own way. Locked into bureaucratic and hidebound processes to conduct market research and produce TV commercials, they have little understanding of trade relations and even less understanding of relationship marketing techniques and the evolving new media used to communicate with a diverse, dispersed and distracted set of target audiences. 3. The holistic and integrated approach is a whole lot of bullshit. The TV and print guys rule. They give lip service to online and emerging media but they don’t get it. Adding an 800 number or a URL to an ad is still considered a slight to the creative team. The notion of sequencing, simulcasting or integrating messages or audience segments among media is a foreign idea which is perpetuated by siloed departments and competing units. Even at the holding company level, very few campaigns can bring a sophisticated, multi-channel campaign to life in a way that measurably impacts client’s business. 4. They think the whole game is the message. They don’t get the notion that advertising and marketing is about throughput – finding, engaging, qualifying and incenting likely customers to buy. If a commercial tests well or the placement gets decent ratings they are done. Bringing customers through the pipeline is outside their worldview. 5. They measure the wrong things. Clients want to know what they got for their marketing spending. If they spend $10 they want to know if they got $100 in business in return. Agencies don’t have access to the data or expertise to count and measure the impact of their work. Instead, agencies want to talk ratings and recall scores. But don’t ask about the efficiency of their processes or how much it costs to create an ad with 30 words of copy and a photo. 6. They can’t make money any other way. Agencies are locked into production processes, project management procedures and cost elements...
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Managing the Magic First Moments Finding the optimum amount of content of an interaction to properly engage and motivate a prospect is direct marketing’s Holy Grail. Based on the premise that a prospect will trade some of his or her time and e-mail address for something perceived as valuable, marketers can easily over do it. It’s very easy to get into a cycle of sending out stuff. It’s harder to be more focused and more mercenary about it. The idea is to find the right amount of content necessary and sufficient to engage somebody without overwhelming them, without making a choice too onerous and without unnecessarily giving away the store. It’s like fishing. How much bait is necessary to lure a fish? The first question is what and how much do I offer? If I have a white paper, an industry report, a copy of research that you’d ordinarily have to pay for, a newsletter, benchmarking data , competitive assessments, a book, a pamphlet, tchtachkies or an Amazon discount card available; do I offer one, some or all of them to grab your attention? Generally people get stymied over more than 4 choices. But they love to have a choice. We advise clients to offer as many as 4 items and let the prospect decide which item(s) they want. The second question is how and when do I follow-up? The sooner you act and the shorter your message is, the better your results will be. We advise using an automated triggered e-mail within 48 hours to ascertain if the prospect actually read the item and to ask 6 simple follow up questions: Was the content useful and would you like something else on this topic? What is your role in researching or buying our product? What is your researching/buying time frame? Is a budget authorized for this product or service? How quickly do expect the buying process to be concluded? Would you like to talk to one of our reps? 48 hours later hardly anyone remembers the first interaction. And most first interactions are passing fancies like seeing a really cute person on a bus – you are fascinated and can’t take your eyes off for a short, intense period. Then it’s over and forgotten. So by following up you remind the prospect of the fleeting interaction and separate out those with greater than momentary interest; possibly the small percentage that will actually end up as customers. You ask for their preference on further interaction and ask if they want to talk to a sales rep because if you don’t ask, you’ll never knoiw. Those who answer the BANT (Budget, Authority, Need and Timing) questions right get a follow-up communication. Those who don’t -- don’t. Again it’s like fishing, if they bite you follow-up. If you don’t you fish elsewhere the next day.

Danny Flamberg

I am a veteran marketing consultant working with leading and emerging brands

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