August 05, 2009

4 Reasons the MSFT-YHOO Deal Doesn't Matter The highly publicized Yahoo-Microsoft deal doesn’t matter.. It’s a corporate strategy, balance sheet and market share play for the participants. There’s nothing in it for those of us marketing products, services or ideas online. Here’s four reasons why you can safely ignore this development, just like Wall Street did. It won’t change search traffic patterns. Google still rules. There’s no reason to believe huge numbers of well-trained Googlers will switch to Bing-Yahoo. There’s no technical improvement, no consumer incentive, no perceptual difference and no reason to think that we will have exposure to bigger or qualitatively different search audiences. Google will still have a dominant share. I’m not only talking share of search. I’m talking about of advertiser and agency share of mind. The deal might motivate Google to love buyers and middlemen more but they’ve been on a love jihad for the last couple of years and already have a robust set of tools and a pipeline filled with new ones. Their early arrogance has been tempered with a corporate sensitivity to agencies and advertisers. We are not feeling oppressed by an ogre nor are we yearning for relief from a Ballmer in shining armor. There’s no price deals. The auction mechanism doesn’t put any more money in our pockets. We have no financial incentives to change our behavior. It will take a while to close. We’re struggling day-by-day to stretch budgets and deliver more ROI faster. There is no quick impact to the deal or savory short term benefits because it will take months of regulatory scrutiny before this becomes real.
Ridiculously Rating the Digital Agencies Imagine that at the height of a recession when digital agencies were beginning to muscle traditional agencies by attracting bigger media spending and getting a bigger voice in strategy, you set out to help clients differentiate and understand the strategic and executional capabilities across the field. Then imagine that you only really looked closely at the top twelve biggest players, didn't talk to any independent clients, relied entirely on agency interviews and propaganda and then rated them all excellent or really strong by producing a magic quadrant where the scrum was all bunched in the upper left segment. Would this have any value to anyone or would anyone plunk down $1749 to read the detailed report? This is how Forrester created the new Forrester Wave:US Interactive Agencies -- Strategy and Execution, Q3 2009. Written by a former media guy with no senior management or client side management experience, Sean Corcoran, this is a laughable bogus exercise masquerading as strategic consulting. If the methodology represents Forrester's standard research and analytical approach cancel your subscription and run don't walk away as fast as you can. This is a half-assed attempt to extend their services and influence into the ad agency world. It's a world that barely tolerates search consultants who do a similar half-assed job without all the faux consulting rhetoric, artificial constructs and pedestrian graphics. In a field acknowledged to be relatively undifferentiated where agencies make almost identical claims and offer equivalent, if not exactly similar services, starting with only the top agencies billing more than $100 million who added 5 or more clients in the last year and offer 7 of 9 stated services skews the field from the get go. Interestingly my alma mater, Digitas, the biggest US interactive agency, opted out of this silliness and was rewarded with a gentle mealy-mouthed non-endorsement endorsement intended not to piss them off. Basically these guys talked to each agency and collected their propaganda. They quizzed 3 of each firm's favorite clients. Then they established 39 evaluation criteria in three big buckets -- client offering, strategy and market presence. Then they ranked each agency. Although the mean score of 4.3 out of 5 suggests how useless this exercise was. They all make the same claims. They all offer offer the same services. They all have marquee clients. And they all have impressive staffs. Now they all score roughly the same. Would you ace DraftFCB because their 3.0 on strategy doesn't measure up to R/GA or Sapient's 4.80? Garbage expressed in 3 digits is still garbage. Buried in the blab or implied in what is not written are several truths about the current state of digital agencies. Here's what I culled: Analytics is being used as a differentiator. As data becomes more important for driving campaigns and connecting marketing to business results, the size, quality and usefulness of analytical teams can distinguish one agency from another. In real life, this is much more rhetorical or aspirational than real for clients. It's not about services but solutions. In a field where parity reigns the component services are much less important than how an agency marshals them to achieve client business results. There's no easy way to measure or compare this kind of performance but its the meat that clients look carefully for in every pitch. There's damn little breakout creative. Clients and customers have sophisticated visual expectations set by heavy multi-channel and multi-media use. They expect eye-popping cool imagery and punchy copy in many formats. For agencies this is table stakes. With jaded clients and customers, even B2B customers, its particularly difficult to sustain creative claims. That's why ignoring smaller, younger more organically digital shops destined these "results" for irrelevancy. You can't escape heritage. Each agency started out specializing in something. R/GA was a traditional creative boutique. Ogilvy was a traditional and DM global network. Rosetta was an database analytical consulting shop. Rapp and Wunderman were direct marketers. Over time they added people and services. The extensions are a mixed bag -- some great, some not-so great. In some cases the old guard has been replaced. In other cases the original leadership, mindset and perspective still govern how they operate and go-to-market. Some get it and some are still trying to figure out what channel and creative integration are all about. Finding the point of origin and assessing the value and quality of the add-ons over time is critical to understanding what each agency is really good at and how well they can organize,...

Danny Flamberg

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

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