baileysbusinessbeef

The Dinosaurs are Dying

In When Good Agencies Go Bad on November 10, 2009 at 4:19 am

Recently, while working with another Management Consultant we began discussing the industry that I focus my attention on – The Advertising Industry.  He asked me how I saw the industry developing in a quickly changing environment. I simply answered that I see our Agency clients falling into 1 of 3 categories. I estimated that about 40 – 50% either specialized or bought/merged with interactive and social media agencies – those will make it. Another 20 – 30% continues to do traditional advertising for their clients, but will do digital media when needed – they may make it. And about 20% are sticking with traditional advertising.

This consultant asked me why I thought the later group was only 20% and I had to answer with difficulty – “They are the dinosaurs” I replied.

At least 2 – 3 years ago I started suggesting to my clients to add digital media and in particular social media into their specialties. Several have taken that advice and are now flourishing pretty well considering our economic environment. Most have actually shown growth in 2009 over 2008.

Over the past year, too many agencies have either completely closed or closed offices.  Some would speculate that this is due to the economy. But, again, I have to say that the majority of our clients have seen growth in 2009 and expect that growth to continue into 2010.

I had to think about why these agencies that have such memorable creative work and have been around for years were forced to close. I looked at every aspect of their businesses.  What I see are agencies that have settled into a comfort zone with their great creative work and don’t develop or evolve. The front page of the November 2nd issue of Advertising Age, highlighted the closing of 22 year old Cliff Freeman & Partners. The reason that several top executives gave for the agency’s collapse was that it had a reputation for being old-school and not for the cross-discipline, and in particular digital work that most marketers demand today.

When I walk into a new client, one of the first things I ask them; “What do they believe makes them unique? Almost everyone initially states that their Creative Talent is their differentiation point (another topic for another post). If it was mere creativity that makes an agency thrive or even just survive, then I ask why did the agency with the creative genius to come up with “Where’s the Beef” and “Pizza Pizza” close their doors in the past few weeks.

The reality of what makes you different is not your creative abilities. Yes, I will agree that you must have creativity –the basic premise of the Industry. I see phenomenal creativity in nearly every agency I walk into. But creativity alone will not keep you in business over the next 5 – 10 years. You must also have well defined, efficient processes and constantly stay abreast and master the technology and skills required to be ahead of the pack. This year we have seen JWT close the 118 year old Chicago office and today BBDO announced the closing of its Detroit office. None of us can argue that great creative has come out of those agencies. However, they failed to adapt their processes and business models to the changing environment.

Remember that the dinosaurs chose not to evolve. What will your agency be?

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