25 February 2008

Can you say "Duh"?

From AdWeek today...

Portals rose to prominence based on the theory they were one-stop shops for users and advertisers. But as the Internet has matured, users have increasingly spent time on social networks and niche sites. Now advertisers are following their lead.
On the one hand all I can say is "Thanks Captain Obvious."
On the other hand... if this helps the advertising world (and our clients) understand that Portals are dying and that we've passed the point of Media Saturation... then Great!

Now... all snarkiness aside, I think that it's interesting that they note that this is not just about social networks - but also about Niche sites. I fear that folks are going to simplify the situation and say "it's all about Social Networking!!"
It's not.

Oh... and perhaps my favorite fact is that, despite issues with audience and issues with pricing and value -- the agency that produced the data still increased their spending on Portals.
No-one ever said we were smart.

21 February 2008

Does "the Big Idea" make sense anymore?
Would it be better to focus on "a whole lot of small good ideas"?

20 February 2008

is traditional brand advertising dead?

But cheap interaction turns the tables. The cheaper interaction gets, the more connected consumers can talk to each other – and the less time they have to spend listening to the often empty promises of firms. -- Harvard Business Online
Again... not rocket science but there is a mix of some very good incremental thinking here and a really, really well articulated argument.

This is a significant point in time for Brands - for Advertising - and for the entire marketing and creative services industry.

Time to wake up.

08 February 2008

New Forrester report

OK... So there are some conclusions/recommendations in the new Forrester report on Ad Agencies that I'm (to say the least) dubious about. But I cannot argue with the analysis of the current state of affairs.

In Forrester's view, a simple fact is driving the need for wrenching change in how advertising agencies are structured: consumers increasingly do not trust marketing messages. Instead, they rely on advice from friends and others in their various communities to make product decisions, while using tech tools to tune out ad messages they deem irrelevant. On top of that, consumer media choice has made the notion of a "captive audience," other than during some sporting events, a thing of the past. -- AdWeek, 2/8/08
It's an interesting read.
In particular, while some of the information is obvious or has been stated before... There are some startling and valuable bits in here.

Seeing the gap in perception between agencies and clients on the value of an agency is shocking. When 90% of Agency Execs say their firms are "well-equipped to help deal with changes in Internet Advertising" while less than 50% of Clients feel the same way... or seeing an even greater gap when the same question is asked about Consumer-generated media... the picture starts to get painfully clear. And seeing a client-generated aggregate Net Promoter score for Agencies of 21% is kind of horrifying.

And there is some weird data in here as well. I have to admit that I was shocked (and perhaps a bit heartened) to see that, while only 39% of consumers say they trust information on a manufacturer's web site, only 11% trust reviews by bloggers. Maybe consumers are smarter than the average Internet Agency thinks they are...

The key part of the report (IMHO) deals with the challenges facing Chief Marketing Officers. This is a major driver that hasn't been consistently addressed. We've all talked about the changes on the consumer side - but when you look at this changes in context of the challenges for the CMOs -- then suddenly the urgency and seriousness of the problem facing Ad and Marketing Agencies becomes quite stark.

So what's to be done...
This is HUGE opportunity.
They identify Brand skills as the missing component for the Digital and Interactive firms.
They identify new specialists and boutiques coming into play.
Out of these two spaces are going to emerge the next generation of big players.
I have a suspicion that we're going to see another round of roll-ups as a result.

04 February 2008

Invaluable

How to pitch a VC (revisited).

Why Ad Agencies are in trouble

So I've commented before (and probably will comment again in the future) that the traditional agencies are facing rough times. I've talked about the challenges of the changing media markets, the issues with brand touchpoint rankings changing, the demographic changes, the brand control issues. I've alluded to the issues around business models.

But a tiny piece from Ad Week today says it perhaps more clearly than I ever could.

Dave Morgan, evp, global advertising strategy at AOL, said media shops have a faltering business model, with armies of comparatively low-paid digital media buyers propping up a layer of high-priced executives from the traditional side of the aisle.

The inefficiencies created by this approach are no longer tenable, and current trends will yield "leaner" agencies well versed in using digital-buying platforms, he said during a panel discussion at an investment-banking conference here on Monday.
In other words... the legacy models and structures are crippling Ad Agencies. More than that, the legacy mindset is combining with their lack of flexibility (and change resistance/arrogance) to make them vulnerable to more nimble (new) competition.
Despite the pessimism, Morgan stressed that AOL is not looking to go around ad agencies and convince clients to buy directly from the company's various networks such as Advertising.com, Tacoda, Quigo and Third Screen Media.

"We're not Google," he said. "We need agencies. Unfortunately, they don't have a profitable business model now."

"They've got overpaid television folks and underpaid online people," he explained in a later interview.”
So... what are you waiting for?
There are billions out there for the taking.