Omnicom, the global advertising group that runs agency networks including BBDO and DDB, has seen its profits fall by 22.5 per cent during the three months ending 30 September.

In its third quarter results, released today, the group, run by John Wren, reported that year-on-year profits had decreased from $213.6 million to $165.6 million, with worldwide revenue falling 14.4 per cent to $2.83 billion.

In the US alone, revenue for the period dropped by 13.2 per cent to $1.5 billion, while international revenue decreased 15.8 per cent to $1.35 billion.

The figures meant Omnicom’s operating profit for the three-month period fell from $373.4 million in 2008 to $294.8 million in 2009.

Coty, the world’s largest fragrance company, is preparing to launch a global review of its estimated £180m media planning and buying business.  It is the first time the multinational conglomerate has attempted to consolidate its media business and is expected to include the £25m UK account, only retained by Omnicom’s OMD seven months ago.

The shock decision to instigate a global pitch process comes amid a series of local market reviews, including one taking place in its domestic market, France, and another in the US, which was responsible for £70m worth of media spend last year.

The 105-year-old cosmetics giant is home to many of the most popular brands, including Calvin Klein, Cerruti and Marc Jacobs in its Coty Prestige portfolio, and Adidas, David and Victoria Beckham, and Kate Moss in its Coty Beauty range. The review will include the media business across both portfolios operating in 90 countries and is being led by Coty’s senior vice-president, corporate media, Sigrun Graeff. According to local market figures tracked by The Nielsen Company, ad spend has dropped about 20% across the group since the global economic downturn began in 2008.

Despite the tough climate, Coty’s chief executive Bernd Beetz is hoping to achieve annual sales of $5bn in 2010, up from $4bn in 2008. One agency leader called the move “symbolic of the current climate”, but warned the constant drilling down of media value is not a sustainable model for the industry. The decision to run a global media review in spite of a series of local market reviews either recently completed or still underway draws parallels with Vodafone. The UK telecoms incumbent OMD, which snatched the account from Carat after less than a year in August, will be hoping for a similar result with Coty.

http://www.brandrepublic.com/BrandRepublicNews/News/945011/Coty-launch-global-review-its-180m-media-business/?DCMP=EMC-DailyNewsBulletin

Interview: Omnicom Digital CEO Jon Nelson: We Were A Trendsetter In The Ad-Shop M&A Game | paidContent.

Bland interview but it clearly portends big things ahead for Omnicom in terms of digital acquisitions. I like that!

This is a topic that’s been on my brain as of late and I stumbled upon this article today.  It says everything I’ve been thinking but with far more eloquence and far less frustration than I’ve been able to muster.  Thanks to Mr. Saffir, an industry veteran and a former Porter Novelli executive for saying what so many of us who work for small agencies are thinking.

Big Agency versus Small: Bigger Is Not Always Better

By Leonard Saffir

I have helped manage one of the biggest agencies in the world and one of the world’s smallest — my own one-man shop — and firms of every size in between. Big is not always better (though it’s certainly the most expensive). Oftentimes the only difference between a big agency charging $20,000 a month and a small one charging $3,000 is $17,000.

I have sat in on many new business sales presentations along with highly skilled colleagues after which we, the new business team, won the accounts but spent very few hours on the new clients’ business. Some agencies tend to over-promise the everyday services of their top executives. In fact, I left the big-agency world because more and more of my time was spent pitching new business and less on the day-to-day creative side.

Any firm with anything on the ball at all is good at presentations. The senior people and the top agency talent spend a lot of time and effort on new business, sometimes giving short shrift to existing clients.

The new business team will have developed a polished dog-and-pony show. The basics of all effective new-business pitches are pretty much the same: demonstrate a dazzling flair, show extraordinary sensitivity in responding to a potential client’s concerns, promise enduring cooperation and high-level results.

Merilee Kern runs her own small PR/marketing firm in San Diego, Kern Communications, and she loves it just that way.

“I think that younger and/or smaller shops have less bureaucracy and more flexibility that allows them to quickly adapt with the times…new technologies and otherwise,” she told me.

With a specialty in high technology, Kern believes “technology and the ever-changing Internet space have vastly changed the PR landscape.”

“My boutique firm handles clients quite effectively and, more important, successfully all over the country. I’ve found the client proximity is truly insignificant and that being in the same city as a client can actually be counterproductive since more time is spent meeting rather than producing. And, again, with the advent of technologies, my small shop is able to provide the same level of service as the giants but with more flexibility,” she said.

Many small firms enter into alliances with other firms in or out of their areas and call them in as needed.

Bob Dilenschneider is one of the giants of public relations. The Dilenschneider Group, of which he is CEO, is a partner firm in the Worldcom Group, the world’s largest organization of independently owned public relations consultancies with 91 partner firms and 113 offices on six continents.

I asked Dilenschneider for his comments on big agencies versus small agencies. Here’s what he told me:

“The size of the agency makes no difference at all. Nor does the scope, nor the geographic reach of the agency make a difference. The difference for any client is really in the people. Do they bring the experience, knowledge, insight, and contacts to a client that will make a difference in that organization’s results and bottom line?”

“Is big better?” I asked.

“Many agencies, both large and small, are stuffed with people who couldn’t get jobs elsewhere and whose approach to the field is remedial at best.”

Dilenschneider believes “clients should seek original thinking and people who can look around corners and forecast what [is] coming; individuals who have the integrity to work whatever hours are necessary to get the jobs done; people who can share opinions and come up with better ideas as a result, rather than being polarized in terms of their own views; and individuals of high ethical standards.”

“Does a big agency benefit because it can put 30 or 40 people into the field to help drive a point of view,” I asked.

“Not necessarily,” Dilenschneider responded. “It’s been proven over and over and over again that one person who understands how to work with the media, outside interest groups and others of similar ilk, can be as effective with six or seven paragraphs and can find ways to protect them over and over again.”

Dilenschneider told me a story about the late Roy Battersby, who, he said, could work any situation:

“He could send a story to the press on butcher paper with the blood dripping off the sides or to an editor in Beijing as well as New York on the same grounds as long as he had a story.”

“Does a big agency help when it comes to generating research?” I asked.

“Only if the researchers are really good. The small or medium-sized agency can reach out to research sources just as easily as a big agency and often more efficiently,” Dilenschneider said.

A Munich, Germany, technology firm learned about me from my last book. The program I developed for them was a big one, too big for my one-man shop. So I brought in a local PR firm to handle some of the nuts and bolts, and we were able to put many people on the account. Patti Giglio, founder and owner of PSG Communications in the metro Washington, DC, area, has a small firm that can grow as needed.

“The bottom line is that through strategic alliances I can offer the same services, only better and cheaper, as the big PR firms,” Giglio told me. “In addition, when you hire me — or most any independent — you get my personal experiences and strategic support engaged in the decision-making process. When one hires an independent PR professional, you get personal service from an experienced pro and are never handed over to a junior account manager. I like to say, ‘When you hire me, you get me in a chair.’ Also, in my opinion, it is good to hire independents because independents do a good job or they don’t eat.”

Veteran PR guru Al Croft of Sedona, Arizona, agrees.

“What’s really made it possible for smaller, independent firms to compete with the big ones,” Croft told PR Week, “is, of course, technology. With the influx of computers and the Internet in the past two decades, it no longer makes a difference where a firm is located.”

I can attest to that. When I left the big-agency world and moved to Florida as a lone practitioner, I had more clients from out of state than in Florida.

The story is the same for Sharon Dotson and her Houston-based Bayou City Public Relations firm. She doesn’t go after the companies that earn $10 billion a year but sets her sights on companies that make $10 million annually.

“Winning the trust of small companies and getting them to cross the line and do business with me rather than a large, prestigious PR firm is now possible through the miracle of the computer and the Internet,” she told me. “By the way, I never bad-mouth any competitor, big or small. I only talk about the concept of big firms versus small ones.”

How PR Is Billed

Big agencies, for the most part, work on an hourly fee basis, like lawyers, after they estimate how many hours they will put in and what the hourly rate will be of all the people who will be working on the account. Everyone bills his or her time, down to the secretary.

Here’s how one big agency described its budget and fee structure in a proposal to a small startup dot-com company:

“Two months fee calculated at $40,000/monthly will be required before work will begin. Based on our initial recommendations and early discussions, we project our professional fees will be in the range of $40,000 monthly. This estimate is based on our combined professional hours. If the client selects programs and activities that exceed this budget, our professional fees will be higher. Expenses are generally approximately 20% of the annualized fee budget. The level of activity and projections for professional fees and expenses will be provided on a monthly basis for approval.”

The prospective client had a choice: write a check to the big agency for $80,000 and pray, or go to a smaller, experienced agency at $3,000 a month and pray. The decision was a no-brainer.

When I worked for the Richard Weiner firm — a highly successful national firm operating only out of a New York office — we billed on a monthly fee basis. If at the end of six months or a year we found we were putting in more time for a client than the fee we were getting would cover, we would renegotiate the fee.

At the Weiner agency, if our profits before taxes were 15-20% of our billings, everyone received bonuses, and champagne flowed at the end of the year. Things changed when the Weiner agency was acquired by the advertising giant BBDO and ultimately merged with Porter Novelli and came under the newly formed Omnicom Group.

Our profits under Omnicom had to reach 25%. If we were falling short, we had to bring in new business or fire people to make the numbers. Omnicom projected its numbers to Wall Street, and all subsidiary companies had to deliver on Omnicom’s projections.

Were our clients better served? I didn’t think so in the early days of Porter Novelli.

The clients who knew me wanted to see me regularly. However, as I was a member of the management team, more and more of my time was devoted to bringing in new business and controlling our expenses, and less was spent on creative work.

Incidentally, Philip Morris was one of my longtime clients at Porter Novelli. When we converted to hourly billing, they said they’d had bad results in the past from hourly billing. They told me that for them to continue retaining us, the billing would have to remain on a monthly fee basis. I argued for them, and Porter Novelli and Omnicom management went along. After all, Philip Morris was one of our largest accounts. When I left Porter Novelli, Philip Morris dropped the agency.

Large public relations agencies are like advertising agencies in that they add people to service accounts and lay people off when they lose accounts. Turnover at the margins may look high. But a prospective client ought to know if there is relative stability at the core, among the senior associates and the key creative and research people. If not, why not? Have people resigned, or have they been fired? What happens to the account when a key individual leaves?

Small business owners should note with interest the way in which the pitching agency talks about turnover. Some will be candid: “He quit because he had a better opportunity at Ruder Finn.” Others will have a battery of alibis — the person who left was just not cutting it, or whatever. Others may hint at client pressure: “They changed marketing VPs and asked that we shake up the team.”

Public relations agencies that seem overly susceptible to client pressure are agencies to beware of. The savvy client wants an agency that will fight to keep a professional in place, in spite of problems, if they are convinced that the professional is right for the job. “Yes persons” who seem to promise that the client will have extensive personnel control are not to be counted on as strong counselors.

After nodding through the usual litany of clients, the prospect should ask about the ones that got away. Since every agency loses clients, the agency must have lost some accounts. How many did it lose in the past year? Who were they? Why did it happen?

These are tough questions. Some PR new-business presenters will try to slide past them, saying that, of course, there is always flux in the business and that it is complicated to find the reasons for partings of the ways, and often the separations have been by mutual agreement, etc., etc. Prospects ought not to be satisfied with agency representatives who merely parrot the words of the innocuous press releases that may have been sent out at the time of the change. Agencies should be willing to admit that they are not perfect and talk about their own share in the responsibility for losing accounts.

All some PR practitioners “learn” from losing an account is that the client was unreasonable. Good PR practitioners should be willing and able to analyze their shortcomings, draw principles from them, and demonstrate how they have translated these principles into action.

Can the $2,000-$3,000-a-Month Agency Handle Your PR Needs?

Yes and no.

The larger agency obviously has larger expenses in terms of rent, salaries, and particularly high-priced executives, and that’s part of what you, the client, are paying for. The smaller agency may have only a few people on the payroll working out of a low-rent office or, like sole practitioner Sharon Dotson, doing the laundry while talking to a client with a wireless headset.

The key question always is who will be doing the actual work on your account. The big-agency new-business pitch will be made by a star-studded lineup, the top — or at least very senior — people in the agency. The makeup of the team that will handle the day-to-day affairs of the client is another matter. In handling the question “Who will be working on my business?” agencies are often tempted to use certain standard evasions:

“I’ll be personally keeping an eye on things.” (Eye-on is not hands-on.)

“When you have a question, call and ask for me.” (To ask is not necessarily to receive.)

“Every one of us at the table will be actively involved in your account.” (Until the contract is signed.)

Big numbers do not necessarily spell good service. The prospect should concentrate on the one person who will be the captain of the team. One person with brains, common sense, guts, and know-how is better than 10 Ivy League drones.

The small agency may be run by someone with vast experience with big agencies where he or she billed time at $250 an hour who now works for half of that amount.

The agency should be forthcoming about who will be working on the account and what they will be doing. Will your account person be available on call, 24/7, if something breaks in your organization?

The small agency should be able to talk comfortably about where to get additional staff as needed. Large agencies can point to a lot of bodies and say they are right there when needed on a moment’s notice. A savvy one-person band, operating out of a cell phone, can get freelancers or moonlighters when necessary, and these people can be as good or a lot better than available staff people in a larger organization.

The agency’s professional who is assigned to the account ought to function practically as a member of the client company. When Philip Morris was a client of mine, I was given a picture ID card so I could enter their midtown New York City skyscraper offices at any time of day…and I did many a night and weekend.

If you can’t trust your PR person to be part of your company or business, you will be wasting your money by retaining an agency and then keeping them in the dark.

The Experience Trap

Picking a PR agency primarily because it has experience in the company’s specific industry can be a fatal mistake. This experience can take a number of forms: the agency actually has, or has had, clients in the industry, or the agency produces staff members who can boast of specific experience. Since the idea of a client in the same or a similar business may raise questions of conflict of interest, an agency going after a new account may scour the payroll for people who have toiled in the vineyards occupied by the target company. If someone with the requisite experience is found, that person is trotted out as an asset.

Such “experience” should be discounted substantially, if not ignored entirely. The client company should be far more interested in getting the services of keen, gifted people rather than those who happen to have already been around a particular track. There can be far more benefits in getting the fresh thinking of a professional who comes with a new slant than in getting the well-worn wisdom of somebody who knows the industry. Good PR practitioners are quick studies. They can learn the relevant essentials of the business in a remarkably short time.

In pitching for new business the public relations agency submits a written proposal of substantial length. Such proposals tend to follow a pattern. They state goals and objectives, give a terse recap of strategies, discuss target audiences, and then spend a lot of space on tactics or the nuts and bolts of implementation. Then there is a fact sheet about the agency.

Too often the new-business proposal becomes cast in concrete. The people putting together the new-business presentation are busy at other jobs, so they save time where they can. One way to save time is by using off-the-shelf material for the bulk of the proposal.

A written proposal that seems truly fresh and innovative and that is truly aimed at the client, without a lot of boilerplate, speaks well for the agency. However, the prospect should not write off an agency just because the proposal seems blah. Many agencies are better than they look in their formal new-business prospectuses.

Yesterday, a group of us at Element 79 took part in a conference call as part of an Omnicom initiative via the Harvard Business School called The Digital Transformation.  The featured speaker was Diane Hessan, CEO of Communispace: a fast-growing social networking company with an enviable client list (that includes, somehow, both Coke and Pepsi–genius).  She took us through her company’s offerings and learnings, which primarily boil down to creating smaller online communities of deeply-engaged opinion leaders selected to provide a sort-of ongoing super focus group that’s allowed insider access to a company with an eye to helping them truly connect with their market.  Breezy and incredibly candid, Diane’s stories of how Communispace developed from a software provider to a leader in the social network space made the hour long presentation feel like sixty seconds. 

Communispace creates bespoke social networks for each of their clients and while their services are not cheap, they do provide truly insightful perspective that a typical focus group could not.  Using social networks to gain deeper understanding of market wants and needs simply makes intuitive sense.  It was all very fascinating.

But the anecdote that leapt out to me above all others was a casual aside regarding Motrin’s Twitter debacle (read this for some background).  Amazingly, among their highly networked, deeply engaged social networks, barely any Communispace power consumers had even heard of the incident.  This big day of reckoning for Johnson and Johnson, the crowning achievement of corporate responsiveness to a Twitter-driven issue proved to be largely a tempest in a very small teapot to the world at large.  Practically speaking, outside of a very narrow band, no one cared.  And that’s very telling…

Objects Online May Appear Larger Than They Actually Are

For all of our obsession about new media, for all of our hand-wringing about the rise of social networking and the profound ways that Web 2.0 impacts both culture and daily behavior, this reportedly seminal moment in citizen-informed activism created barely a ripple on the surface of public awareness.  And yet it fueled countless blogs and online debates about the pervasive influence of Twitter and other new social mediums.  To anyone in those networks, it was big news.

And that is the point: the world of forwards and retweets and pingbacks can create an ecosystem of incredible influence through the sheer volume of the message.  Spark a debate on Twitter or any other leading social network and you will hear volumes of opinion loudly amplified, albeit in their specific closed systems.  This sturm and drang does not necessarily reflect popular offline opinion.  The very insider nature of such closed systems exaggerates the impact of any lightning rod issue.  Micro-blogging platforms acts like a microphone; creating very loud noise, but often in a closed room.  Meanwhile, the larger non-networked, TV-watching crowd continues their obsession over inanities like the travails of Jon and Kate, blissfully unaware of the drama brewing in one isolated social network.

So once again, it is up to an agency to help clients sort out the meaningful from the localized, the truly impactful from the trivial, when it comes to deciphering the impact of various messages among social networks.  Should you react?  Or should you respond: intelligently, cogently and appropriately?

Responding is always the better path.  These days, it takes consideration and prudence; two qualities not particularly emblematic of advertising agencies.  And so once again, the market dictates we evolve.

By Dennis Ryan, CCO, Element 79

[or] What do a predatory fish (or Hyundai sports car) and a place of worship have to do with a Minneapolis marketing agency?

Tina Wilcox is no stranger to the limelight. As founder of the innovative retail marketing agency Fame, she garnered high marks for creativity and style and enjoyed the high profile that comes with success.

Five years ago she famously abandoned her labor of love, presumably when agency owner Omnicom did not reward her high performance with high enough regard in contract negotiations. [Oh, the sins of agency conglomerates. Even Don Draper suffered mightily from them back in the day.]

A non-compete sidelined her for a year and when she resurfaced — because Tina is the kind of person who always resurfaces –  it was as Black Design, a new agency forged in partnership with two Fame alum. The firm’s launch got some respectable media buzz, but Wilcox’s profile has been mysteriously low-key since. (Aside from that awkward Star Tribune article earlier this year about a neighborhood dust up. Google it yourself; I’m not getting involved.)

Why all this preamble?

AB has been a tease in this blog and on Twitter about a Minneapolis agency spreading its wings and building out new office space. So, now you know that Wilcox’s very own Black Design has been the object of said tease. “Details!” I hear the crowd bellowing. Sadly, this is where you learn that AB is not omniscient (was anyone laboring under that delusion?) because in fact I have only one or two facts.

First is a two-fer: the location of Black Design’s new offices and the answer to the needlessly oblique sub-head to this post. Black’s new offices are slated to be on 12th Street and Harmon Place, on the sleepy west end of downtown Minneapolis across from the University of St. Thomas Law School. The street-level space was formerly occupied by two restaurants: first Tiburon and then Twin Cities’ home to naked sushi, Temple.

Black’s new space is housed in a building that was once headquarters to HGA Architects and was originally built as a Cadillac dealership. In the past half dozen years it has emerged as a bit of a marketing-creative micro-climate, housing feisty B2B marketing agency Schermer Kuehl, as well as Met|Hodder, a television production company that counts among its clients ABC Television, Disney cable networks and SyFy. [Self-promotion alert: Met|Hodder is where AB is fortunate enough to spend his weekdays.]

Today's raw space should be putty in the hands of retail marketing guru Tina Wilcox. AB hears that the 20-foot long aquarium stays. Can't wait for the opening party -- unless this post keeps me behind the velvet ropes.

Word reaches me that Razorfish, the digital interactive-cum-media placement agency being disposed of by Microsoft, is causing controversy as the bidding enters the second and final round.

Microsoft originally bought Razorfish as part of its $6bn acquisition of aQuantive in 2007, but clearly feels an agency of this size conflicts too much with its ad sales operation. The idea is to offload it, via Morgan Stanley, onto one of the big agency groups for well over $400m, plus  a commercial deal involving Microsoft proprietary advertising technology and a commitment to buy ad space across Microsoft web properties such as Bing. Conditional selling, you might say.

Interpublic and Omnicom have fallen by the wayside, which leaves WPP, Publicis Groupe and Dentsu in contention.

Publicis emerged as an early favourite, despite the fact that its platform technology (via Double Click) is more closely aligned to Google than Microsoft’s Atlas. So it was somewhat miffed to discover that its ally Dentsu – which holds a strategic stake in Publicis – has comprehensively outbid it.

But the $700m rumoured to be on the table may not be the knockout bid it appears. The trouble is Dentsu doesn’t have the US presence to do an appealing commercial deal. Which is where, in other circumstances, its ally might have come in…

Experts think that $700m is over the top in current market conditions, a symptom of Dentsu’s desperation to catch up. Maybe Microsoft should take the money and forget the side-deal. But then again, that side-deal has become more important now Microsoft is acquiring Yahoo!’s search business.

Another day, another dollar less. Quarterly results from the big agency groups paint a revealing picture of financial pain, and nowhere more poignantly than in the case of the stricken automobile sector.

Publicis Groupe recently disclosed that its exposure to bankrupt General Motors was ‘only’ $12.8m (about £8m) rather than the £78m (£47m) originally projected. That did little to soften the blow when the half-way figures came out a few days later: net income (pre-tax profit) down 13%, and nasty deterioration in organic growth in the last quarter. The only bright spot was a 6% increase in digital revenues over the six months. That, and the assurance of group chief executive Maurice Levy that things can only get better – from September onwards. Tell that to the 1,800 people (4% of the group) he has had to ‘let go’ this year.

Still, Publicis did a lot better than Interpublic Group, home of Lowe and McCann Erickson (one of whose biggest clients is GM). IPG has actually managed to achieve a loss of $53m (£32m) over the six months. So the reduction of its latest quarterly net income by 76% must be accounted something of a triumph by comparison with first quarter performance. Quite a lot of its losses are attributable to the severance costs of the 4,100 people it has made redundant – 9% of its workforce.

Omnicom (BBDO, TBWA, DDB etc), too, posted pretty dismal figures, slightly more encouraging than IPG’s but not, on most criteria, as buoyant as Publicis’. It is laying off 3,500 of its staff, nearly 5%. Profits for the last quarter were 24% down, about the same as the previous quarter. Which was probably pretty good really, considering Omnicom’s $58m exposure to bankrupt Chrysler. On this subject, however, chairman and ceo John Wren was understandably vague – despite analysts’ obvious interest in the subject. It was the second biggest search term employed in Omnicom’s earnings call. There are, as I have pointed out before, some unresolved mysteries about Chrysler and Omnicom.

As for WPP, we will not be seeing its half-year results until the end of August. Things are not looking too clever, though. True, WPP is the odd one out so far as the car industry is concerned. Not only has Ford not made its way to the bankruptcy court, it has even managed a small operating profit this quarter. So no write-downs; but that’s slim cause for comfort, as ad spend is likely to be depressed for some time to come. Redundancies give us a fuller picture. In a trading statement released early in June, WPP admitted to making 4,300 employees redundant – about 4% – since the beginning of the calendar year. The final figure is expected to be about 7,200.

Both Publicis’ Levy and Omnicom’s Wren seem to be spinning the idea that we are at, or near, the nadir. Don’t believe everything you hear, though. Next  quarter’s earnings may look better than they really are simply because the dive they took in Q3 last year will flatter the percentage increase. That, at least, is the view of WPP ceo Sir Martin Sorrell.

la zanahoria publicitara

En la entrada anterior descubrimos a varias empresas online, con publicidad casi exclusivamente online, buscando agencia de publicidad tradicional para hacer publicidad tradicional y preferentemente en TV.

Lo que no dije es que un artículo de Brandweek titulado Zappos Seeks New Agency terminaba con una frase reveladora: “Una peculiaridad de la revisión (de agencias por parte de Zappos): Zappos está solicitando a las agencias que presenten esquemas alternativos de compensación prescindiendo del sistema usual basado en honorarios (fee)”

Lo que significa que aún Zappos, un pequeño anunciante que solo dispone de un exiguo presupuesto ($7 millones para medios tradicionales, producción y la investigación que se necesite) está enterado de lo que ya han montado P&G y Coca Cola y está muy a favor de negociar bajo las nuevas premisas. Eso no hace mas que confirmar que el nuevo sistema está aquí para quedarse: P&G, Coca Cola, Unilever, A-B Inbev… y Zappos. De lo que ha aparecido en los principales medios dedicados al marketing y/o la publicidad.

Tampoco dije que en un artículo de Newsweek de título áspero: Agencies Bend to Client Whims (Las Agencias se doblegan ante los caprichos de los clientes) se explica que tanto para Zappos, como para Amazon (y Current Media, otro negocio online que busca agencia tradicional para hacer TV) se han dado con un número de participantes inusualmente grande (9 para Amazon, 12 para Zappos), la solicitud de volverse dueña de las ideas presentadas (Amazon) y los fees relativamente pequeños comparados con la magnitud del trabajo a hacerse (Zappos y Current) y finalmente Amazon, en su RFP o llamado a licitación (RPF- Request For Proposal) animó a las agencias a ir más allá de los story boards en sus presentaciones y Zappos pidió conceptos creativos en su RPF original.

la zanahoria puede tomar formas extrañas... ¡y velocidad!

¿Porqué están aceptando las agencias esta manera de negociar? Porque digan lo que digan, las licitaciones siguen adelante y alguien se va a llevar cada cuenta.

Dicen que es por necesidad. Los presupuestos de los clientes se encojen con la crisis y las agencias necesitan reemplazar la facturación perdida. Eso y la posibilidad  de tener una cuenta con cierto glamour que ha sido desde siempre una razón para aceptar algún recorte. Porque las cuentas con glamour son un buen señuelo para otros clientes. También dicen que, ante la crisis, los clientes buscan por todos los medios reducir costos y que la alternativa de renunciar a una cuenta no se puede considerar justamente por la crisis, en una profesión superpoblada. Y desde luego, una dirección de marketing cada vez mas desorientada. Por ejemplo, ante la interpretación antojadiza de la conversación abierta con el consumidor, permitiéndole involucrarse en el manejo de la marca, lo ponen a escribir y dirigir comerciales olvidando que hay tanto desde su responsabilidad como estratega de la marca, como desde el de la agencia, muchísimo trabajo previo para construir una campaña. Y eso es mucho más que montar un storyboard o poner a tres personas delante de la cámara a “actuar” un comercial.

La tendencia es, sin embargo, anterior a la crisis. Yo pienso que lentamente la profesión de publicista se ha ido desprestigiando y que la depreciación de su trabajo empezó cuando el inamovible 17.65% fue dejado de lado por P&G —tal y como ahora ha dejado el honorario pactado— descendiendose gradualmente hasta niveles de rentabilidad poco atractiva. Sin embargo, cada cuenta se ha peleado centavo a centavo llegándose a la subasta inversa (1) de la que hablamos en Unilever y AB InBev adoptan la compensación por performance para sus agencias., que es, probablemente, el nivel más cercano de todos a aceptar que lo que se está vendiendo es un/una commodity. Y sin duda es una manera de empezar la relación en inferioridad de condiciones, porque se negoció el talento —el value de la agencia— como si se tratara de cobre o de café a granel. Eso empieza en la presentación que hace la agencia (y las exigencias a las que se somete para hacerla) en la que de una u otra manera se regala el trabajo y el talento de quienes cumplieron con los requisitos del pitch, más allá de lo razonable, como hemos visto más arriba. Prueba de la depreciación es que desde la desaparición del 17.65%, la compensación de la agencia no ha dejado de ir hacia abajo.

en el mercado oriental de la publicidad, el regateo tiene lugar de honor

De esa comoditización habla en un artículo con mucha sustancia de un peso pesado, Jonah Bloom, editor de Ad Age: Agencies and Media Brands Turning Into Commodities y constata que las ideas, los avisos y las agencias de medios están siendo tratadas como si fueran widgets que siempre hay alguien que puede hacer mas económicos, en otro lugar. Y dice que las revisiones de agencia que se han llevado a cabo en los últimos 6 meses se han centrado en el ahorro de dinero casi exclusivamente, y que eso no es que sea sorprendente o disparatado, sino que en el proceso, se han pedido detalles excesivos de costos para trabajar después bajo la suposición de que los costos pueden ser estandarizados. Como le dijo al autor un ejecutivo senior de una agencia: “Estamos llegando al nivel en que nos van a decir cual debe ser el salario de nuestro director creativo”.

Tampoco le choca el hecho de que tanto Coca Cola como Unilever estén pasando a pagar “un poco mas del costo excepto que las agencias alcancen los objetivos de performance”, si los objetivos se concuerdan y son realistas. Lo que le preocupa es que en ambos casos (y esto es sorprendente), el autor tiene la percepción de que los objetivos no son tan fáciles de concordar ni tan realistas. Considera, además, que alargar los plazos de pago establecidos es simplemente tratar a las agencias como líneas de crédito y no como socios valiosos.

Toca otros temas como el incremento en pretests del material creativo y cree que es en buena parte el causante de que haya mucha similitud en los trabajos y que este sea de poca calidad (disiento: el pretest no desbarata ni descompone el trabajo creativo; bien usado, orienta sobre la manera como el consumidor lo percibe.)

Termina el artículo ofreciendo publicar las maneras de combatir la comoditización a partir de ideas propias y de las que recoja en los próximos días.

Es como para darle la razón al gran creativo francés  Jacques Séguéla, que escribió un libro en 1992 de largo título irónico, perfectamente válido para la era actual. O quizás, más válido ahora aún que cuando lo escribió:

Ne dites pas à ma mère que je suis dans la publicité– elle me croit pianiste dans un bordel (No le digan a mi madre que estoy en la publicidad, ella me cree pianista de un burdel)

Clive McLean, un consultor de agencias, de mucha experiencia en su artículo: Agency Compensation. Haggling over scope and cost! se pregunta:

¿Por qué siempre parece ser que las agencias terminan regateando con sus clientes como vendedores de un mercado oriental para que les paguen por el trabajo que ya han hecho?

Y comienza la respuesta con

Todo empieza con el hecho de que nosotros, como industria, gastamos miles de dólares de nuestro propio dinero de manera especulativa para hacer una presentación de agencia a un nuevo cliente.

Mientras tanto, Unilever ha sacado su cuenta de medios a revisión: $755 millones de dólares solo en EE UU con lo que los ejecutivos de WPP, Omnicom e Interpublic deben haber sentido escalofríos recorrerles las espaldas y los de las demás agencias se deben frotar las manos ¿Cuánto dinero, tiempo y talento estarán dispuestos a invertir en la posibilidad de tener el manejo de siquiera un pedazo de esa enorme cuenta. Sería, sin embargo, una locura que en el cambalache de dólar más dólar menos, quedase en el camino Mindshare (Global Media Agency 2008 para Ad Age) que desarrolló un webisodio de mucho éxito que terminó convertido en una serie de ABC “In the Motherhood” para Suave de Unilever. Y la extraordinaria versión de “Betty la fea” en China que cubrimos en “Betty, la Fea” en versión China: “Chou Nu Wu Di”. La obra de Mindshare. Pero todo es posible. Porque aparentemente, el precio es mas importante que el valor (o value) en el cambalache. Por lo pronto Mindshare ha declarado hoy mismo (06/07/09) en Media Daily News que “defenderá su negocio en los EE UU”. Es decir que competirá una vez más por la cuenta (a pesar del extraordinario desempeño del año pasado).

– CAMBALACHE

Les dejo finalmente un video de Mark Pritchard, con una de las primeras entrevistas del flamante Global Marketing Officer de P&G al que le acaban de cambiar el título por el de Global Brand-Building Officer, como para que no se le olvide que el desarrollo de las marcas es su principal objetivo (un crecimiento cuyo 80% vendrá, según planean, en los próximos 15 años, de los mercados en desarrollo, es decir de los países del tercer mundo en buena parte).

La entrevista tiene lugar en Cannes, hace pocos días, adonde fue a participar en el Cannes Lions International Advertising Festival.

Pritchard habla con entusiasmo de “integrated brand building creativity” y explica que se trata de atraer al consumidor hacia experimentar la marca rodeándolo y conectándose con él en cada touchpoint (o punto de contacto) con RR PP que hablan de un evento, el evento en sí que crea una pausa y animación, Post RR PP, Digital que alimenta de contenido, y todo rodeado de TV y Medios Impresos. Y entre otros ejemplos da el de Gillette con Champions of Gaming, proyecto que desarrollaron con EA Sports e Xbox y en el que se le podía ganar a verdaderos campeones como Tiger Woods o Roger Federer, que funcionó muy bien gracias a tener esos ingredientes. Y habla al final del BAL (Brand Agency Leader, que vimos en Las nuevas reglas para la compensación de las Agencias de Publicidad) que encabeza a las agencias seleccionadas para una marca, que trabajan en conjunto, comentando que el proceso va bien y que ha permitido desarrollar comunicaciones integradas, siendo muchísimo mas fácil y útil compartir el brief con todas las agencias en un solo lugar y hora y obtener después respuestas con proposiciones integrales, sinérgicas, rápidas y holísticas.

Q&A with P&G’s Marc Pritchard 10:39

En resumen: P&G, Coca Cola, Unilever, A-B Inbev… y Zappos integrando en su sistema la compensación a las agencias por performance: una tendencia incontenible y la comoditización de la agencia, un serio problema que requiere urgente atención.

—————————-

(1) La subasta inversa (o subasta de compra) funciona en la práctica  como una subasta normal, siendo la única diferencia que el vencedor de la subasta al cierre de la misma no es la persona o la empresa que ha hecho la puja más alta sino la  que ha hecho la puja más baja.

Esto quiere decir que se subasta la cuenta al menor costo posible.

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]]> http://umairmohsin.wordpress.com/2009/06/29/the-future-of-the-media-agency/ Mon, 29 Jun 2009 07:07:09 +0000 Umair Mohsin http://umairmohsin.wordpress.com/2009/06/29/the-future-of-the-media-agency/ http://collective-thinking.com/2009/06/24/the-greater-part-of-history-is-story/ Wed, 24 Jun 2009 11:54:47 +0000 dennisr61684 http://collective-thinking.com/2009/06/24/the-greater-part-of-history-is-story/

A few of us from Element 79 came to New York City for an Omnicom program on digital platforms.  We spent the night at the Marriott Downtown in the heart of the still-bandaged Financial District.  After an al fresco pizza dinner at Adrienne’s, Brian Williams remembered once visiting ‘the oldest bar in New York City and so we set off in search of a pub called McSorley’s.

It’s obvious why writers love New York; every block holds a hundred stories (the Trinity Boxing Club behind our hotel with its brittle leather boxing gloves and fading poster of Rocky Marciano, the Volvo crossing the Brooklyn Bridge into Mannhattan with a canoe strapped to its roof), at least ten of which would make a compelling short story in the hands of Dorothy Parker or Robert Benchley or even Jay McInerney–this is after all, the financial district.  This town lives and breathes stories, and they came to vivid life when our taxis pulled up to McSorley’s in the East Village.

It’s a simple pub really, serving a few uninspired sandwiches and pints of either light or dark ale, neither of which is very heavy on the hops, with the light in particular displaying the brewer’s mystifying fondness of nutmeg.  Vintage photos and handbills cover the walls, the kind that Bennigan’s and TGIFriday’s reproduce with lifeless precision in their sanitized locations but here, they lay thick with the grime and dust of decades.  It is, after all, New York City’s oldest continually operating saloon, open since 1854.

Speaking of old, the clientele there helped me feel my proper age as they looked to average twenty-four or so, tops.  Gathered talking and flirting and joking around community tables, they smacked of first jobs and long hours, happily spending their paychecks at a watering hole they assured each other was ‘classic.’

Photo by Scott Beale, www.laughingsquid.com

And that’s what really hit me–these young adults with their wingtips and rep ties and work skirts were all enthusiastically reveling in the storied environs.  Three recent UVA grads at our table–two interning at law firms, one at Macy’s– were quick to share the story of the chicken bones hanging over a ceiling lamp above the bar.  Apparently McSorley’s served chicken dinners back around the Second World War and outbound GI’s would save the wishbones from their meals and balance them up on the light fixture, with plans to take them down when they returned from the front.  On that happy day, they would hoist a few pints and pull them apart, preparing for their post war life.

More than a dozen of those wishbones still remain on the light fixture, coated with a heavy rime of greasy dust, talismans for men who never came back from Europe or the Pacific.  The young law school grads pointed them out to us with a respectful awe, clearly caught up in the lives and drama of those soldiers of the great war who lived in an era so far removed from our own.

Why should these young people care?  In a world of 3G networks and text messaging and a million and one everyday miracles where everything is amazing and nobody is happy, why does a sixty year old tale still hold such a powerful sway on the imagination?  Why do legends still loom so large with young people who ostensibly have so many other distractions?

Because they are very good stories.  And in the end, though cities may crumble and our civilization may change in a million different ways, stories are what we hold dear.  Stories bring us together, demonstrating our common hopes and dreams and laughter and sadness in a way no other art form does.  Stories make us human.

Stories matter.

By Dennis Ryan, CCO, Element 79

The big merger between Omnicom agencies Ketchum & Pleon is something that has been bubbling under the surface for a while. Given the way PR revenues have been hit in recent months, it won’t suprise too many people and Ketchum and Pleon are, geographically at least, reasonably complementary.

But one region where this doesn’t add up to much is Asia-Pacific. Ketchum, at present, exists only in Greater China – where it is one of the mainland’s stronger agencies. Pleon, meanwhile, was previously associated with Brodeur in Asia-Pacific, and has a barely minimal presence of its own in the region. So the upshot must be that the new agency, which is actually called Ketchum, will need to seriously consider acquisition if they want to deliver on the idea of becoming one of the world’s key PR networks. As one Asia-Pacific PR agency chief put it to me: “Big move for Omnicom. They will need to buy in A-P…it is their vulnerability.”

As for Brodeur, you could be forgiven for wondering what it will mean for an agency that has worked  hard to try and build a cohesive network across Asia-Pacific, with little fanfare. They will now align with sister Omnicom agency GBC Partners. I asked Brodeur Asia-Pacific president Rick Allen what all these changes really mean for the agency, and this is what he had to say:

“As you probably know, since it was established 4-5 years ago Pleon has had a strategic focus on the EMEA market. Their focus on Asia Pacific was always very tactical – an as-needed outreach in support of EMEA-based clients and prospects. So our regional network has enjoyed some inbound business opportunities from EMEA via Pleon over the years. And while contributing ideas and information, there was no significant investment nor did they participate in managing and growing the Asia Pacific network. This has always been Brodeur’s responsibility.

Moving forwards, what we see is a rejuvenated Brodeur Partners operation. In place of Pleon in Europe is the GBC Group which is now formally part of our Brodeur Partner global network. GBC is a great complement to our operation due to the cultural and entrepreneurial fit, the close sector mapping they have compared to us, and particularly their major focus on social media. I’ve known the GBC principals – Sue Grant and Jill Coomber – for over a decade, and have worked with them on many occasions over the years. I expect this will greatly enhance our geographic liaison and partnering as we explore inter-regional opportunities.

So this realignment is, in some respects, back to the future for us: it’s a return to our entrepreneurial roots, with a strong footing in the application of technology to business, utilising the latest emerging tools and techniques to ensure that our clients are heard and differentiated in the noise of the marketplace. With this there is an energy and momentum that we enjoyed in the buzzy period of the late 1990s, so we’re all excited.”

You can understand Rick putting a positive spin on developments. Brodeur is still largely based on affiliate relationships in Asia-Pacific – so any attempts to forge significant growth are likely to require investment in agencies. Whether that will happen as quickly now that the Ketchum/Pleon ‘colossus’ has been created, remains to be seen.

Mike Langton asks if holding companies (think WPP, Omnicom, Publicis, Havas) hinder or help innovation.

He’s had far more experience than I have working in both networked and independent setups, of course (the bulk of my experience was clocked in an indie firm that was on the verge of being acquired). But I think it boils down to how long- or short-term a view investors (I use this term loosely to refer to the people responsible for funding R&D and training initiatives) take of the bottomline.

I’d go so far as to venture that networked setups have the ability, if not the willingness, to innovate. And that’s a decent start.

Besides, it’s hard to imagine megabucks investors getting where they are by being myopic.

Perhaps in half a year I’ll eat my words.

Here’s a clever guerilla-esque online brand campaign for Post-it that must have cost next to nothing, yet almost didn’t see the light of day.

Commissioned by 3M (hat tip to KC) and run by BBDO (though I’m told the architect has since defected across the Omnicom Group to be ECD of DDB).

I wonder, though, what metrics they are using to define campaign success (apart from the creative awards I’m sure they’ll put this up for).

La conferenza dei Ninja è stata un momento per cogliere molti spunti di persone che sono un passo avanti (se non due) a tutti.
Quattro ore intense e tirate, di quelle che non perdi neanche una parola (forse l’attenzione è calata un po’ durante l’esposizione di ViralBeat). Qui proverò a riportarvi i concetti della giornata: questo post vi riassumerà in maniera indegna (ne sono sicuro) quello che Alex Giordano e Mirko Pallera (per chi non lo sapesse i due capi-ninja) hanno presentato in anteprima, la loro visione sul Viral DNA, che sarà riportata in un libro dall’omonimo titolo, in futuro.

La presentazione inizia con una formula : Viralità = Viral DNA x Seeding : la viralità di contenuto è un prodotto ricavato dalla progettazione iniziale del viral DNA e dalla capacità di seeding.
Successivamente vengono presentate due categorie nelle quali possono essere suddivisi i virali : Valuable o Enjoyable (che possiamo tradurre in italiano con “utile o dilettevole” ), gli esempi portati per queste due categorie sono famosi, Diesel XXX per Enjoyable e Nike Plus (che non sono riuscito a ritrovare) per Valuable.
Ma un altrettanto famoso virale, come Dove Evolution in che categoria lo mettiamo? Serve una nuova categoria :  Meaningful. Il successo di questo video è la tensione latente tra le donne “vere” e le donne “da copertina” che viene esplicitata, al contrario dei canali mainstream dove lo standard femminile è diversio dalla realtà.

Quali sono quindi gli argomenti migliori per un virale ?

• Dio
• Sesso
• Mistero
• Amore
• Guerra
• Gattini (non so se fosse una battuta, ma sicuramente i gattini hanno il loro appeal)

Quindi il primo punto della visione Ninja del Viral DNA è la meaningfulness del prodotto che deve creare delle tensioni interne in chi si approccia ad esso
Il secondo sono le emozioni , nuovi livelli di emozioni, consivise dal sociale. Le emozioni più virali sono : gioia, rabbia, tristezza, paura, sorpresa ; quest’ultima è probabilmente la più utilizzata e la più riuscita.
Un ulteriore punto che aggiunge valore al prodotto è la rilevenza psicosociale, che aiuta il pubblico a immedesimarsi nella scena presentata
Il terzo punto è la catarsi, Aristotele descrive la catarsi come il liberatorio distacco dalle passioni tramite le forti vicende rappresentate sulla scena dal dramma, questo è completamente riportabile su qualsiasi video di successo virale di successo.

Questa è la prima parte dell’esperienza romana, nei prossimi giorni ci saranno ulteriori riassunti degli interventi della Ninja Conference (anche se a dire il vero devo ancora finire di raccontare le cose viste a Milano)

Conspicuous on the list of bankrupt Chrysler’s many creditors is Omnicom-owned ad network BBDO, with an awesome $58.1m (£39m) outstanding. Enough to sink the Detroit agency, left to its own devices, and a figure all the more embarrassing – apparently – because Omnicom high command had massively underestimated the liability only a few days before in the Q1 earnings call (April 27th).

In answer to an analyst’s question, this is what Omnicom president and chief executive John Wren had to say about BBDO’s exposure to Chrysler: “I think our exposure is extremely limited, maybe really to the point of zero. If it were to take an extreme scenario the other way, which I think is remote, maybe even impossible, which would be the brands went away and we had a complete shutdown of the office, I think our cash exposure is probably to $25m to $35m. There may be some additional charges or write-off furniture and fixtures and some things like that, but I think that is an extremely unlikely set of events.”

Well, it looks like an “extremely unlikely” set of events is unfolding before his very eyes just a few days later. What’s he going to do about it?

The first thing to note is that not all the $58.1m is technically owed to BBDO. Quite a bit seems to have been contracted to local TV stations (those, that is, who were foolish enough not to ask for their money upfront in recent months). In these situations the agency normally acts as financial principal – meaning that it liable for the lot. However, Omnicom is confident it will avoid the worst on account of two factors. The government has created a special fund to support so-called “critical vendors”. A court hearing will decide whether BBDO qualifies as one. If successful, the agency may collect about a third of the $58.1 million. For the rest, it will invoke its so-called sequential liability insurance (limiting its exposure to those self-same local TV stations).

That would explain why Omnicom executives are relatively upbeat about events and why the Omnicom share price has scarcely missed a beat, so far.

However, both these factors are highly contingent. No one knows what the outcome of the court hearing will be. Nor how water-tight the sequential liability clauses are when tested by insurance companies reluctant to make such a huge payout.

Just one more thing, as the gumshoe Columbo used to say. Does this $58.1m include media? If it does, that would explain why local television stations are running scared. But not why BBDO, a creative agency, is named as the creditor instead of media buyer and planner PHD. If it does not include media, BBDO has been earning one hell of a lot in creative fees… Something does not add up. All we can safely conclude at this stage is that Omnicom is owed an awful lot of money.

One to watch, at any event.

In the disintegrating world of advertising, fragmentation is sped up by an economic slowdown. Media messaging methodology and efficacy is the dialogue of the day. In the midst of this debate my brethren must not lose sight of those tried and true campaigns which rely on the principle of K.I.S.S. Observe, Exhibit A…

DEPARTURES MAGAZINE (the interview they didn’t run)

SS+K is proud to be included in the May/June issue of Departures Magazine. Departures is published seven times a year for Platinum and Centurion card members in 20 international markets. Unfortunately, I don’t possess either one of these cards, so I’m grateful for my affluent friends and acquaintances who scanned and pdf’d the spread for me.

As you can see from the photographs above (click on the thumbnails to enlarge), my partner, Marty Cooke, and I had the good fortune of being stacked alongside a small group of A-listers from the advertising and digital world.

First, I’d like to congratulate my fellow Mod Men — Benson Hausman of Kraftworks NYC, Jeff Goodby of Goodby, Silverstein & Partners, Jens Karlsson and James Widegren of Your Majesty, R. Vann Graves of Uniworld Group, Gerry Graf of Saatchi & Saatchi, and David Droga, Duncan Marshall, Andrew Essex, Ted Royer of Droga5.

Second, I’ve included an interview with Departures that the magazine didn’t run, but I thought was worth publishing here, at The Third Place, nonetheless. If nothing else, it’ll satisfy my mother and father, who I mention as personal heroes (love you forever mom and dad).

How and why did you get into advertising?

I never actually intended to go into advertising. I had my sights set on entertainment. In my junior year of college, I interned at Rogers & Cowen, an entertainment public relations firm, and thought this field was a good match for my personality but in my senior year, a close friend and classmate thought I’d be a natural in the advertising business and suggested that I speak to his father who was a senior executive at Ogilvy. I was ultimately hired into Ogilvy’s training program. I fell in love with the field.

 How long have you been in the field? 

Sixteen years. Yikes, my career’s old enough to drive in a farm state!

 Where were you before? (What other firm(s) or field(s)?)

I was the EVP, Executive Director of Digital at Interpublic Group’s Draftfcb.  I also spent seven years at Merkley + Partners, a division of Omnicom Co., as the Managing Director and co-founder of Merkley ID, the digital and design unit of the agency. And earlier in my career, I helped The Attik, a European graphic design and digital shop, plant a flag in NY, spent four years at SS+K (the early years), as well as Cliff Freeman + Partners and Ogilvy.

What was your first advertising job?

See ”love” above.

 Who was your first big client that first major get at your first job?

With a tiny but talented crew – and a duffel bag of luck – we took BMW Motorcycles away from mighty Fallon to nascent Merkley ID.  It was sweet.   

 Why did you leave Draftfcb and join SS+K?

I joined FCB before Interpublic Group merged it with Draft and was ultimately asked to design the combined company’s digital practice. This was very exciting because it meant building and managing a very large group and helping to launch the first global, behavior-based marketing communications organization. Eventually, I craved a nimbler, more creatively-focused organization.

According to one of the founders, I was still wearing my bar mitzvah suit when I showed up at SS+K’s doorstep.  Well, I was pretty young, & the place stuck with  me.  An eclectic mix of super smart people from advertising and, importantly, not from advertising, who together worked up an enormous head of strategic and creative steam to melt the hardest client problems.  The mixing up of disciplines, the relentless hunt for the best ideas, the loyalty to clients over disciplines (the answer to every question wasn’t a 30 second commercial!) made me a better communications person.   It was my professional home and it feels terrific to have come back with some skills and experiences, especially in the digital arena, that will add to that great eclectic mix.   

 I’ve dreamed of coming ‘home’ for a long time and when the opportunity to become SS+K’s President emerged, I jumped at the job.

Talk to me about SS+K’s Asymmetric Communications approach, if you would.

 If symmetric marketing is matching your competitor TV campaign for TV campaign, viral tactic for viral tactic, Asymmetric Marketing is about not doing what your competitor is doing. It’s about being where your audience is and your competitor isn’t. It’s about the element of surprise: being a welcome surprise to your target and an unwelcome one to your competitor. It’s Asymmetric thinking that helps SS+K market ideas like a rubber wristband for cancer and an interactive cinema game for a news site.

SS+K also handles crisis management, something you don’t see in a lot of other firms. What’s the relationship between advertising and crisis management?

 You’re right, most ad agencies won’t touch crisis situations because they lack the skills to do it, but SS+K’s political heritage makes it unique in most ways, including their ability to respond effectively even during the most difficult times.  From the client’s perspective, they’ve got a team of people who understand and helped craft and communicate their brand and that same team can help protect that brand when it comes under attack.  It’s a unique and incredibly powerful asset of this agency.  It closes the gap between a company’s marketing specialists and its corporate strategists.

What’s the biggest change in the industry since you started in it?

No question, it’s the shift of power from the marketer to the consumer, from top down to bottom up.  When I came into the business in 1992, no one was emailing let alone twittering. Just three big networks, a handful of cable channels, print, outdoor, radio and direct mail. Now consumers are the media and everything is social. Most marketers are still uncomfortable communicating in a world where they can’t control how and when consumers and other important constituents talk about their brands and issues.

What’s the future of advertising?

It’s vibrant and exciting but it’s also scary and unpredictable.  I run away from cocktail chatter about the end of advertising.  It’s not ending, but it’s morphing as rapidly as technology while retaining its necessary function as the place for creative and marketing specialists who lend their talents out to the needs of commerce.  If advertising was once a profession for c-students from the ivy league (Mad Men), and then a proving ground for the sharpest wits off the streets (DDB, Chiat), it’s now the place for marketers to find adaptable, savvy and creative people who can help navigate brands through social change and insane competition. 

 The advertising buzz words of late seem to be things like branded content, viral, media or platform agnostic, 360 degree branding, symbiosis. What’s next? What’s the next algorithm/paradigm?

 Buzzwords like 360 degree get overused and usually oversimplify what’s actually happening in the marketplace.  Eventually, everyone’s saying but not doing these things.  Of course interesting things are happening all the time and deserve our attention.  The pursuit of social movements, inspired by the meteoric success of the Obama campaign, is a perfect example.   Marketers from big CPG firms to smaller, challenger brands covet ‘Obama Marketing,’ They want less traditional approaches to communications and a hyper-orchestrated social media effort – campaigns that tap into the passion of target audiences and create movements. Something that feels organic to the community, spreads virally, looks effortless, is executed with surgical precision and monitored and measured throughout the campaign lifecycle. I’m learning more about how this magic works now because SS+K was the agency of record for the youth marketing vote working in collaboration with the Obama campaign team – a team SS+K was honored to be a part of. 

In my humble view, the people who figure out how to marry brands to social movements will define our industry’s next chapter.

You were brought in at least partially for your digital prowess and expertise, what’s the biggest way in which you and SS+K are moving the industry forward, reinventing it even? Can you point to a specific recent or forthcoming campaign or ad?

We’re much too modest to talk about reinventing this industry, but we’re doing some very cool work that combines elements including branded entertainment, social movements and technology that we’re hoping will have a major impact for our clients.  We’re also old fashioned in that we still believe that a campaign needs a big idea that captures the attention and loyalties of people who are being chased by so many other brands and causes, and the campaign we’re breaking for the Environmental Defense Fund this season is a wonderful example of how SS+K combines the highest standards of strategy and creativity with the newest trends in social movements and technology.  Stay tuned.

What defines SS+K as a shop? Why do clients come to you or pick you to represent them?

Intelligence, creativity, passion, integrity, honesty, and a non-traditional way of looking at the world. There is no house style at SS+K.

We have a wonderful public image and then there’s a larger, even better truth.  Clients and staff often come to SS+K because of what we’re not – we’re not a traditional agency.  To borrow a line, we think different.  It’s true that we’re unconventional and restless, combining the sharpness of a political strategist with creative excellence and technological fervor, but the larger truth is that the qualities that made SS+K home for me make it home for lots of other people, clients and everyone else.  It’s a place of supreme integrity and honesty. 

How would you define what you and your firm do and how that is different from other firms? How is your firm working to redefine itself—and the industry—especially in light of new media, new technology, and the current state of the global economy?

Again, we’re a little shy of proclaiming that we’re redefining the industry, but SS+K’s interdisciplinary teams have kept it unique since the doors opened.  Today, our ability to identify social forces in popular culture and to harness them to promote brands and ideas stands out as a powerful innovation.  I suspect that others will look to connect emerging social trends to their clients’ brands through every possible medium while giving people meaningful personal choices to make with their time (e.g., volunteer, advocate); their money (e.g., buy, donate), or their vote.  It’s not a simple process, but it’s the right one for us and for our clients, who work with us to measure and optimize our programs with discipline and open-mindedness.

What makes a brand great? What makes an ad or an ad campaign great? (How) Are the two related?

The example everyone cites is, of course, Apple.  The iphone’s a marvel and the campaign lived up to its product’s brilliant standard. It starts with the form factor – I love the way the iPhone feels in my hand. It’s ergonomically suited to my palm. The User Interface is ridiculously intuitive and the apps feel like small morsels of candy. I can’t get enough of them.

But really great campaigns alert you to something wonderful that wasn’t otherwise apparent. Nike produced a yellow wristband and, with the help of some fantastic marketing (including SS+K), turned it into a ubiquitous sign of commitment to fight cancer.  Pretty cool and on point of the social movement ideas that we believe will shape the future of our industry.

Who are your style icons?

To be quite honest, I’m not sure I have any. I like fashion – I always have – but more from an arms length approach. It’s not like I’m looking at any one person as my style icon; however, when a guy has a great sense of style I notice and respect it.

Who is your industry idol or inspiration?

I don’t have one of those either. The only idols/inspirational figures in my life are my parents, my brother, my wife, and my children. I’ve been told this is very hokey, but it’s the truth.

Is there something you couldn’t (or wouldn’t) sell?

Cigarettes.

What’s been your biggest blunder in the industry?

I’ve made hundreds but my favorite was when I was with David McCall (a founding partner at SS+K), presenting a campaign to a room of very formal people from a major financial services company.  It was breakfast and, as the lowest guy on the totem pole, my job included server.  So I shook up the O.J. to avoid serving the marketing director a glass of pulp, but the top  wasn’t secure and juice drenched her, from Chanel head to Prada toe.  I was mortified, especially when I saw that juice had also covered the board that dear old David was in the middle of presenting.  Not missing a beat, he took out his handkerchief to wipe away the liquid and said, “I’ve had lots of work rejected but no one’s ever thrown fruit at it before.”  Everyone laughed, but me.  I was too mortified.

If you were a Mad Men character, you’d be:

This one is tough because all of the characters are morally bankrupt and while I love the show, I wouldn’t necessarily want to emulate any of their behavior.

I guess I’d have to say The Don Draper who was killed in the Korean War and then had his identity lifted by an ad man.  At least that’s the only character that wouldn’t get me in trouble.

That said, the ‘other’ Don Drapper is a total fucking stud.

What’s the biggest misconception about the industry that Mad Men has helped propagate?

That ad people drink and fornicate too much.  Totally false. 

Truthfully, I love the show and I believe it conveys a period not only in our business but in our society, and while it’s wholly fictional, it’s so very captivating.  It captures a truth about a much wilder time.  It’s not the culture of today. 

But what’s the most accurate thing?

It’s true that the personal and professional intrigue at an agency can keep people from doing their best work.  That’s why you want to be at a place where the  intrigue runs low and where you can honestly say, “The guys running this place are as honest and decent as they come.”  It sets a standard for others.    

At your firm, what does cocktail hour consist of?

I’m working on that very point.  Orange juice, anyone? 

                          ANTES                                                                   DEPOIS

A nova embalagem do suco de laranja Tropicana, marca do portfólio da Pepsico, está levantando questões entre os profissionais do mercado sobre a sua aparência mais limpa. Segundo Allen Damson, do blog Brand Digital, ao eliminar o simples, ou seja, o visual da laranja na antiga embalagem, que sem palavras comunicava a dose diária de vitamina C, a marca elimina a sua propriedade, o seu elemento de marca.

No entanto, o mercado aprovou o novo formato da tampa da Tropicana. A empresa conseguiu se diferenciar da categoria com uma tampa inventiva moldada como uma laranja. Sem dúvida, uma maneira simples e inteligente do consumidor tocar na fruta. 

O trabalho foi desenvolvido pela agência Arnell dos Estados Unidos, que pertence ao grupo Omnicom.

According to PR Week, Omnicom has snapped up the PR account for Philips, the Dutch electronics manufacturer. The account will be handled by a group of Omnicom companies including Ketchum, Fleishman-Hillard, CPR and Kreab Gavin Anderson. The agencies will cover off its PR for consumer products, lighting, healthcare and corporate divisions.

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• Omnicom set to axe up to 3,500 jobs, says US media report (guardian.co.uk)
• We have a winner: digital communications sweeps Brussels awards ceremony (pagoesdigital.wordpress.com)
• Virgin Media is about to activate its social media (brendancooper.com)

In a move that will surely help to further propel mobile display advertising, OMD, Omnicom’s media buying agency, has officially become the first [influential] agency to mandate that mobile publishers accept 3rd party ad serving tags and bill off of the 3rd party numbers.

Can I get an “amen!”

Mobile 3rd party ad serving is still in its infancy. But it’s moves like this, albeit potentially a bit premature for mandates from what I am hearing about discrepancies between 3rd party and publisher ad servers, that will help force the market to move forward.

Controlling the serving and tracking of campaigns has been part of agencies’ DNA for years now. 3rd party ad serving becoming the standard for mobile is inevitable. Doubleclick and others have been experimenting with mobile ad serving for several years now, but the mobile display ecosystem never seemed quite ripe enough for major roll outs (I guess).

Let’s recap why agencies (and advertisers) use 3rd party ad servers:

- To have immediate access to and glean insight from robust metrics not provided by, nor prioritized by publishers

- To measure all placements on an apples to apples basis and to provide an audit

- To gain more control over creative changes

Since next year has been the year for mobile marketing for at least the last three years, we are at the cusp of finally seeing this prophecy come to fruition. Of course SMS and app marketing are revelling in all their post tipping point glory. If OMD’s move is indicative of where the other major agencies are heading, display, and video are right behind them.

As part of Omnicom’s admirable ongoing commitment to education, I attended a short but wonderfully informative session, mostly focused on digital and emerging media.

They instructed us to approach digital as a language, not a technology or media platform.  This approach makes all sorts of intuitive sense.  Digital does work like a language: everybody talks, but very, very few make inspiring poetry.

By Dennis Ryan, CCO, Element 79

Bill Gates, Devolved 500,000 Years, Give or Take

As budget cuts, media confusion, and the baleful world economy wrack our incredible shrinking advertising world with round after round of staff reductions and pay cuts, we all worry about tomorrow.

But today, I attended an Omnicom DAS seminar where Jonathan Nelson, co-founder and chairman of Organic. addressed the current situation and how social media will reset the marketing game once again, with the same sort of revolutionary impact as Web 2.0.

He provided resonant insights and perspective on our changing business but one anecdote hit me like a ton of bricks.  Back during the dot com bubble of the early 90’s, Organic had 1280 employees.  Then the bubble burst, and within twenty-four months, Organic shrunk to 160 employees.  In other words, nine out of ten employees lost their jobs.  Moreover, of the thirty-nine web development agencies back then, only five survived.

Now I remember the dotcom bubble being bad from a general viewpoint, but I had no real empathy for just how bad that must have been until today.  Our troubles loom large; very good people have already lost their jobs and industry stability still seems out of reach at the moment.  Yet as Jonathan tells it, this bitter experience taught digital agencies how to expand and contract better than their traditional counterparts, which can be a real advantage in a scary marketplace.

But taking the uptside, more than anything this anecdote reinforces that business flows in cycles; even the crappiest craptastical crapfest of crap-crap-crapellicious times eventually passes.  And you can quote me on that.

Though you might want to rephrase that last bit if you have kids…

By Dennis Ryan, CCO, Element 79

When nearly 100% of people don’t have the slightest idea what a phrase means, it is usually a good indication that we should stop using it.

So it is with “above-the-line” and “below-the-line.” Ask someone in marketing to define them, and he will stammer and flail. Then in all likelihood he will begin to list different media that fall under each heading. Lists are not really definitions, of course, but we’d gladly accept them as rough explanations if only there was some consistency among them. There isn’t.

Nevertheless, some may protest that the distinction is actually quite simple: Above-the-line advertising uses mass media, and below-the-line advertising does not. But in the 21st century, what is mass media? Does it include an in-store video network that reaches 100 million people a week? Does it include an online video that 20 million people see, but not one that 10,000 people see? Where do we draw the line?

Going back to the origins of the phrases is no more helpful. “Above-the-line” and “below-the-line” were originally bits of accounting jargon at Proctor and Gamble. Back when agencies were still earning double-digit commissions on media, they used to throw in creative and production for free. These services didn’t have an impact on P&G’s ledger; hence, they were “above the line.” The other services that P&G had to pay for were “below the line.” Of course, the days of fat media commissions and the logic that spawned the phrases are long gone.

Consequently, it’s time for a radical new taxonomy of advertising. The line we draw shouldn’t be in some mysterious location in the ether but rather straight through the mesencephalon (or, if you prefer, midbrain) of the consumer. In short, it is time to begin categorizing advertising based on the part of the brain to which it appeals.

Essentially, there are two kinds of advertising: The one that asks consumers to make a considered decision by persuading with reason and emotion. Such functions lie almost exclusively in the forebrain. The other kind of advertising attempts to turn the choice to use a brand into something akin to a reflex—or to use a neurological term, an autonomic behavior. Autonomic behaviors, which include things like breathing and the movement of the peristaltic muscles, are controlled by the back of the brain.

Of course, because of a general belief that forebrain functions represent a more advanced state of evolution than primitive hindbrain functions, there will be an immediate rush to elevate advertising that appeals to reason above advertising that strives to create a reflex. After all, Cannes Lions are won by exciting the synapses in the frontal lobe, not by appealing to the more basic functions controlled by the brain stem. I’m going to suggest, however, that marketing perfection lies much nearer to the back of the brain than the front. If anything, the ultimate aspiration of advertising—albeit one that very few brands will achieve—should be to move the communication from the front of the consumer’s brain to the back.

As exhibit one, I give you Google. The genius of Sergei Brin and Larry Paige, Google’s founders, is that they have figured out a way to get paid every time people don’t think. It is a lucrative market. George Bernard Shaw did the math on it decades ago: “Few people think more than two or three times a year. I’ve made an international reputation for myself by thinking once or twice a week.”

In other words, if you can figure out a way to make a few pennies every time people don’t think, there’s a lot more money in it than making a few pennies every time they do. I do not say this to belittle Google’s success, but to explain it. Indeed, coming up with an idea as clever as theirs required a tremendous amount of thinking. Maybe even three or four times a week.

At the most basic level what Google has done is to create and then monetize an autonomic behavior, like breathing. No one makes a decision about whether or not to take his next breath. One does it involuntarily, just as one’s heart continues to beat and one’s peristaltic muscles continue to move food through the digestive tract. In a similar manner, when people want to find something online, they Google it (having your own verb is often a good indication that you have created an autonomic behavior). Countless times I have watched people navigate to websites using Google when it would have been easier to find what they wanted by simply adding .com to the end of the subject itself. They can’t stop themselves any more than they could stop their own hearts from beating. Nor can they stop clicking on the paid search advertisements that pop up at the top of the screen against a pale yellow background.

We do not think of them as little advertisements that someone has placed. We reflexively “know” that because they are at the top of the page, they are good. Yes, our belief in their quality has often been built at least in part by a branding campaign aimed at the forebrain. In fact, search marketing does deliver better results when it works in concert with brand advertising. Nevertheless, it remains true that the act of clicking on a paid link is not generally the result of a carefully considered decision but rather of a kind of reflex action. Something very similar happens in the aisle of the grocery store. Though “executive judgment” may be involved in the choice of a few products, more often consumers are sleepwalking down the aisles and collecting by rote the items they will purchase. Basically, they allow muscle memory to take over, and they begin pulling brands—conveniently identifiable by the colors and typefaces and designs that have been pounded repeatedly into their brains—into their carts. The consumer’s moment of truth is, the majority of the time, not about a conscious decision but a subconscious reflex.

Set aside for the moment the argument about whether advertising that appeals to reason or advertising that creates a reflex should be preeminent. Let’s look instead at more objective measurement—the value the market places on the different parts of the consumer’s brain. We can actually do this rather easily. The numbers are printed in the newspaper every day. Compare the market capitalization of Google with that of some of the major advertising agency holding companies*:

Google $112.54 billion

Omnicom $8.79 billion

IPG $1.75 billion

The disparity is astounding. Investors believe that a single company, Google, which is built almost entirely on creating reflexive behaviors in consumers, is worth many times more than all the major advertising agencies in the world combined. To ignore the meaning of these numbers is to ignore a radical shift in not only what brands expect advertising to achieve but in how they expect them to achieve it.

Put simply, although it’s sexier to get people to choose a brand the way they choose vegetarianism or a new hairstyle, it’s more lucrative to get them to choose a brand the way they choose oxygen.

* As of 2/13/09.