The more ads I see, the less I believe the ad industry (in its current form) can survive. It's no longer enough for agencies to position a product in the minds of consumers.
Brands are thinking the same thing: 60% of Fortune 500 brands are thinking about replacing agency work with in-house capabilities. And it's not just brands that are fighting to take this activity in house - management consulting firms are taking a piece of the pie too - Deloitte Digital's work for Tourism South Australia's 'Be Consumed' campaign is just as beautiful as anything I've seen coming out of other digital agencies.
You don't have to look far to support this hypothesis: look at Tesla, who don't pay for advertising & don't have an agency of record; Uber, who run elaborate marketing stunts in house (who doesn't want kittens or ice cream delivered via taxi?!), or Warby Parker, who have created a product & business model so disruptive that it practically markets itself. The digital age calls for a new model that steps away - far away - from the old school Madison Ave model and instead calls for deep, embedded relationships with clients that allow agencies to advise and answer business problems, not just briefs.
If agencies really want to stimulate behaviour change - not only re-framing products for consumers but re-framing the media landscape for clients - we should be operating more like the industries that shift businesses: management consultants and start ups. Both specialise in turning problems into profits. Here are the lessons we can - and need to - learn from them:
1. They Focus - Obsessively - On the Business Problem
"Today's companies can build anything they can imagine. So the question we are called on to answer is no longer primarily, "Can it be built?", but rather, "Should it be built?" -Eric Ries, Running Lean
Management consultants make a business out of providing analysis and advice on their client's business problem. Advertisers come in far downstream - and we're tasked with putting a band aid on a business problem. But what if there were a different way to approach the problem?
In McKinsey's nascence, consultants weren't known as 'consultants', but rather, 'management engineers,' a term that reflects the thinking du jour: that science held the answers to the most serious of questions, and "that human commerce could profit from the rigor of this kind of data-driven analysis." Similarly, start up Bible Running Lean argues that most start ups fail because they spend too much time building the wrong product, and encourages an obsessive focus on testing assumptions and conducting research on the business model before building a product. There are a number of companies - Uber, Warby Parker, Airbnb, to name a few - who prove that the marriage of digital with the right product is a recipe for success. What if we could use our deep understanding of digital to marry with the client's knowledge of their product to obsess over - and answer - the business problem in a way that suits the digital age?
If we want to influence real behaviour change, we need to stop obsessing over the brief alone and start obsessing over the business problem - showing value by leading clients to seek new opportunities - providing innovation, not just insights & information.
2. Pivot to Identify New Products and New Markets
"As good as your business model may be today, it cannot and will not survive forever. Customer tastes will change, new technologies will replace old, unforeseeen competitors will enter the market, and regulations and population demographics will evolve over time. That means you must constantly gather information on shifts in your competitive environment, especially those that might affect the behaviour of your primary customer." - HBR, Choosing the Right Customer
Running Lean emphasizes that the biggest reason for failure among start ups is that they begin building the wrong product, failing to identify a viable business model before they begin building. But - interestingly - 66% of startups surveyed said that while they did begin building the wrong product initially, they 'pivoted' from their original idea - and in many cases were very successful (Twitter, PayPal, & Groupon all pivoted). Which is to say that if you're looking for it, there are new products, new markets and new opportunities waiting to be uncovered in the midst of the data companies have. Instead of only answering briefs, agencies would do well to move towards a consulting model, attracting the best and brightest minds to use as hired guns to answer business problems, product problems and communications problems with digital data & insights.
3. They Share Ownership - & Success
When jockeys race horses, they don't get paid (the big bucks, at least), unless they win. Sales associates don't make commission unless they sell. People work harder when they know they'll see some of the profits. I can't think of a more satisfying feeling than having the tools - and freedom to tackle a business problem - and actually seeing the project through to completion. Sometimes, advertising can fix business problems. But sometimes, there's a lot more that needs work than just a campaign. But clients' budgets are set, their hands are tied by global mandates and agencies struggle to influence much besides campaign messaging & execution. The irony is that the very industry that is meant to facilitate creativity and problem solving - advertising - is being remarkably slow to adapt to this environment, with a few exceptions.
Startup founders, unless they've already shown enough promise to yield funding from VCs, are usually living on fumes, Top Ramen and dreams. Which means they have a lot of (self-inflicted) pressure to perform - but a HUGE incentive if they succeed. What if agencies worked like that? Would the work change? Would it be better? I'd bet so.
Eric Ries, pioneer of the Lean Startup movement, famously said, "You get a gold star not for following a process, but for achieving results." We need to be looking at the industries & models that are achieving results - and right now, it's not ad agencies - at least not in their current form.
No matter which side of the client - agency - consulting relationship you sit on, there's a unique & ripe opportunity to marry digital with design thinking for real business results.