Ad agency

The Great Budget Chase.

The Great Budget ChaseSince The Drift is primarily aimed at the sell side of our industry, I tend not to get very many comments from ad agency execs.  But I’m hoping what I write today will ring true with agency leaders and that a few of them might take the time to respond.  If you feel so moved, perhaps you’ll forward this to someone who runs an agency or a major account to see what they think.

The subject today is budgets.  Most of the sellers and sales organizations I work with are in constant pursuit of the digital ad (or mobile or video or DR) budget.  Media planners are constantly saying “we haven’t gotten the budget from the client yet.”  After a short silence, we hear that the elusive budget has arrived, but is far smaller than anticipated and has already been allocated.  The seller then balls up his fists and curses either the fates or the duplicity of the agency.  But I think both the approach and the reaction are ill-considered and cheap.

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Instead, let’s look at it from the agency’s perspective.  Relatively few sellers put in much time and effort before the budget is set and the planning process is in full swing.  A few of us will “check in” from time to time:  Any budget yet?  No?  OK, I’ll check back later.  Others will quiz each other at events or on Seller Crowd with questions like Does anybody know if a budget’s been set on the AT&T Wireless business yet?  As soon as a budget does materialize, sellers begin to swarm like so many five-year-old soccer players around the ball.  Now that you have the money and are as busy as you’re going to be all year, how about seeing me and hearing my story?  

For every thousand sales people who show up to help an agency spend an existing budget, only one or two ever talk about helping the agency grow budgets or tap into new ones.

The dirty secret is that many media agencies operate on razor thin margins. The way they get healthy is by getting existing clients to spend more with them than initially planned.  Sellers are in a great position to help them if we just step out of the box and start to think creatively about all the budgets and pools of funding that are in play today.  Shopper Marketing.  Promotion.  Retail Co-Op.  Compliance.  Research.  Public Relations.  Branded Entertainment.  Social.  Video.  Mobile.  There’s a guerilla war going on among agencies, consulting firms and other service providers who are constantly raiding one another to steal away budgets through creativity and guile.

If you want to change the way you’re seen by a key agency, reach out to a senior executive and tell her that you’ve got an idea that you think may drive additional spending by one of her clients.  Also tell her that your organization is prepared to run the program or capability so that the agency doesn’t have to put any real staff time against it.

Now you sound like someone worth meeting.  Now you sound like profit.

Interested in the immediate future of digital video?  The next Upstream Seller Forum is happening on Tuesday June 24th in New York.  If you’re a CRO, EVP, SVP or VP of sales and sell to agencies and clients, let us know you’re interested and we’ll tell you more. 

The Week of the Agency.

Maybe it was all planned around the Mad Men premiere, or perhaps just the result of cosmic alignment, but there seemed to be an awful lot of commentary on life within ad agencies this week.  And not much of it good.  If I were one of the agencies with engaged planning teams, professional standards and strong customer relationships, I’d be cringing right about now.

Continuing its “Confessions” series, Digiday (who are doing some of the most meaningful coverage of our business these days) gave us “Confessions of an Agency CEO.”  Apparently clients can be dumb, insensitive, shallow and calculating, all at the same time.  Who knew?  Bitching about clients’ lack of appreciation seems ingrained in the agency culture. (Who can forget the boorish, closet-case Lucky Strike client on Mad Men?)  But based on Brian Morrissey’s Digiday piece, that client now has far greater means to inflict pain on the agency:  procurement, transparency, the assignment of “projects” rather than a long term commitment to any one shop.  Running an agency profitably seems a pretty tall order these days.  And at the leadership level, it doesn’t seem like much fun.

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In fact, it seems that agencies have become so unprofitable and glum that they’ve been forced to outsource both nutrition and entertainment to publishers and other media sales organizations.  As Digiday’s Jack Marshall writes in “The Consequences of the Gift Economy on Online Ad Sales,” “…What media agency jobs, particularly at the low level, lack in salary they make up for in rooftop parties and VIP concerts…This is, in some ways, a business-model decision. Lower staffing overheads means bigger margins and bigger profits.”  But as I wrote in this space last year (“Buy Me a Couch!”) we’ve gone far beyond free meals and Yankee tickets.  Today it’s increasingly about merchandise.  Just last week I was forwarded an e-mail exchange in which a seller invites the agency team for a night out.  The reply comes back that what they’d really like to do is go shopping for expensive personal items and accessories.  You can’t make this stuff up.

I’m judging neither those who run agencies nor the media planners who take what they can, while they can.  But the system is profoundly broken.  Those charged with spending the client’s money wisely and effectively are having their lifestyles and wardrobes subsidized by those whose wares they are supposed to judge.  Imagine if the Federal government hired border agents by telling them “The pay’s not very good, but you’ll be getting tips, small appliances and cases of liquor from each of the truck drivers who pass your checkpoint.”  Cue the outrage.

There was talk in the article about vague agency policies on gift acceptance, but it seems they are pretty ambivalent and mostly optional.  If I were an agency CEO out to make a value and culture statement about my shop, I think I’d draw a line in the sand here.  Meals? Yes.  Merchandise? No. Rep takes you to a sporting event or concert? Yes.  Rep hands over tickets but is not with you? No. Make a clear distinction between relationship building and graft.  And for God’s sake, if you already have a policy then go public with it and wear it as a badge of honor.

And I’ll put the same message out to sales leaders:  challenge your reps on how they’re using T&E budgets.  Buying off planners with sneakers and jeans is not just morally suspect but also largely ineffective.  The current culture is cynical and self-defeating.  The elevation of our business is going to happen one judgment call at a time.  I hope we start making those calls very soon.

Mind the Gap

As I’ve talked over the past year with marketers, agency leaders, holding company executives and ad technology players, I’ve wondered if we’re all actually pulling in the same direction…or if we all even see the same horizon.  Specifically, as  holding company leaders hold forth about process efficiency, automated audience buying, Wall Street level trading of  ‘ad futures,’ I wonder if those who manage and run brands and marketing budgets obsess about the same things?  There’s a case to be made that ad agencies are working night and day to solve ad agency problems;  that all this math and science are really being put to work to restore the agencies’ own broken systems and fractured margins.

The Drift is proudly underwritten this week by PubMatic, which provides one holistic selling platform to protect publishers and increase their online and mobile ad sales.

This may seem extreme to some, blasphemous to others.  But these questions need to be asked.  As publishers and media aggregators look to interpret the needs of the client through the opaque filter of the agency, they just may be getting an inaccurate — or at least less-than-complete — picture.   I believe there is a major gap between the media agency’s dreams and ambitions and those of the brands they serve….a gap that focuses on business outcomes, brand health, marketing/user experience integration and consumer relationship management.  Who’s minding that gap today?  And who will fill it?

I’m not taking a thing away from the need for process reform.  More years of high-priced humans wasting countless hours over brain-dead RFPs is a hellish notion.  And I’m not even saying that this all may not also be in the client’s best interest, at least indirectly.  What I am saying is that it’s hard to obsess about more than one thing at a time.  And in fixating on constantly driving down handling costs, I believe that agency holding companies have taken their eyes off a very important ball.  And that ball is now very much in play.

So publishers and media aggregators would be well served to start fixating on this cavernous gap between what agencies are focused on providing and what brands truly value most.  Brand centric thinking is no longer an interesting pursuit; it’s now a survival strategy.

Have You Hugged an Agency Today?

Consider the plight of media agency executive today:  The holding company that owns the place is hell-bent on replacing your team with an automated trading desk.   Your clients (when they’re not taking dinners with the shop that wants to unseat you) are holding you responsible for getting them great deals on only the best websites.  In the next 18 months, many of the people on your team are going to (a) get poached by another shop, (b) take a job with a media sales organization, or (c) finally realize that grad school is where they belong.  There are 14 messages on your voice mail and 62 in your e-mail inbox from reps who just want to “check in” on this or that account or brief you on their new site redesign.  And all the while, friends and relatives who watch Mad Men think you’re doing nothing but gourmet dinners and courtside seats.

Madison Avenue needs a friend right about now.

The Drift is proudly underwritten this week by Krux Digital, which gives websites a platform to safeguard, manage, and make responsible use of consumer data signatures across multiple devices, sources, and formats. Find out how.

Some media sellers might think this is the perfect time to turn their backs on the agency.   They would be sorely mistaken, and they’d be leaving tremendous opportunity – and money – on the table if they did.  Now is the time for a new creative level of engagement with the media agency.  It’s something that the sales leader and the sales rep can commit to, measure and execute.  And if pursued consistently and well, it will lead to good things.  Here’s the roadmap:

  1. Focus on the Agency’s Relationship with its Clients. Every shop is trying to differentiate itself; every media exec wants a personal victory with her client.  Constantly challenge your team to consider whether and how you’re making a difference in these relationships.  But before you can do that, you have to…..
  2. Cultivate Those who Actually Talk to the Client.  Most digital sales teams spend countless hours and entertainment dollars currying favor with media buyers and RFP jockeys.  We don’t get to see the people at agencies who really own the client relationships because we don’t….
  3. Have a Point of View on Creating Value and Growing Budget. Face it:  Most of us are simply focused on helping agencies spend budgets.  We’re just a bunch of birds in the nest, all crying for the same worm.  All we usually ask senior agency executives is “help us get more.”  Instead we should be focused on how we can….
  4. Give the Agency a Strategy and Resource Boost. “We want to grow our relationship with this agency, help you extend your services and help you grow the budgets you touch by generating and fostering ideas.  But we can’t do that until you help us….”
  5. Get Off the RFP Crack Pipe and Get Greater Visibility. I know, this is bitter medicine. Working the RFP machine was a good strategy for many years, but it’s just not any more.   Many reps and sales teams are victims of their own past success, and can’t envision an immediate future where enterprise selling skills and long-term relationship incubation are needed.  The faint ringing you hear is your wake up call.

Take responsibility for your own behavior in the agency relationship.  Operate from a place of generosity and vision.  Teach your people to be 70% of the relationship that they want with the agency.  The shops you call on will define themselves based on how they respond.  Those that reject the fresh approach I’ve outlined above may indeed not be worth the effort. But if you reject it yourself, than you’ve got no one to blame.

Leading a sales organization?  Over 50 of your peers will be gathering in New York on March 16th at the Upstream Seller Forum, the only industry event just for sales leaders.  Request your invitation today or call us at 802.985.2500 to reserve your spot.

Reunited and Back on the Road

In last week’s post — “The New Playbook” — I spoke of several new “plays” that the media seller can run once the “transactional” side of our business — the buying and selling of holes in pages — becomes fully automated.   Today we’ll look at the first couple of plays I mentioned; plays that will often be run in combination.

It was a nasty breakup.  Creative and media had been a great team for a long time.  They made a ton of money together and audiences just couldn’t get enough of them.  They played Madison Avenue successfully together for decades, lighting it up during the Mad Men years (“ring-a-ding-DING!) all the way through the late Disco era.  But then, as so often happens, everybody got greedy.  Both creative and media felt they could make more money as solo acts, and the public breakup was messy and interactions since that time have been cordially chilly at best.

But today, GREAT NEWS! There’s a reunion tour in the works, with dates booked all over the internet and audiences eagerly waiting to see what the team’s still got.  But if you think for a second that this reunion tour is going to be organized by the ad agencies and holding companies, think again.  The reunion of media — in digital speak, “inventory” — and creative ideas won’t be engineered by the very people who broke the pair up in the first place.  Rather, it’s going to be the media companies and sales agents — sellers — who are going to bring the two back together in the service of marketers and their brand goals.

One of the obvious ‘plays’ that sophisticated media sellers will run for their clients is “reattaching inventory and creative;” collaboratively forming a creative idea that ties the brand to your audience or experience in a compelling way and then distributing that idea across your site or network…..and beyond.  In the past we’ve thought of promotions, sweepstakes, custom environments and activities as fodder for a quaint little microsite.  But no more of that.  Rather, the seller will help pour those experiences into flash-based creative units.

But the service they perform for the marketer won’t stop at the borders of their own domains:  the seller of tomorrow will also become an audience aggregator by actively adding frequency (through retargeting) and reach (by finding lookalike readers and environments) on ad exchanges.  As I describe in play number two, they’ll begin “reversing the flow of messaging through the ad pipeline.”  Up to now, most digital sales organizations have waited at the end of the pipe for ads to flow into the squares and rectangles on their sites.  But that pipeline runs both ways, and I see the sales organization pushing high quality ideas and creative execution through the system, onto both its own spaces and those to be had in the burgeoning ad exchange ecosystem.

If this combination of creative work, strategy and audience aggregation sounds like the responsibility of the ad agency, that’s because it once was.  But remember that the Madison Avenue holding companies were the ones behind the original breakup.  Now the media owners are brokering the reunion tour.  And I think it’s going to be a smash!

Disagree?  Agree?  Examples of just the kind of work I’m talking about here?  That’s what the comment boxes below are for.  Say something….you know you want to! #thedrift