Campbell on Branding and Innovation

Advertising Agencies are in a Commodity Business

Advertising is salesmanship mass produced. No one would bother to use advertising if he could talk to all his prospects face-to-face. But he can't. - Morris Hite

Traditional ad agencies are fundamentally broken and ripe for innovation. This isn’t exactly new news but it is something that bugs the heck out of me because a) I truly think there is a ton of potential for agencies b) I don’t read much about agencies making the hard decisions to actually do something to avoid being a commodity (and I read A LOT about the ad industry) and c) they profess to know brands but don’t follow their advice themselves. To quote my friend David Cook, “It’s like going to a dentist with bad teeth.”

Agencies are distraught over how quickly clients switch agencies, how their creativity goes unrecognized by clients, how their profits are being squeezed despite the value they can create and the thinking they offer, how they’re marginalized and are not given a seat at the table, etc., etc.

For the most part, they still think through the lens of mass media, they’re all over the map in terms of clients, taking any piece of business in any industry, they don't know their client's business like they should, they apply for, win and tout awards that are flawed and meaningless with regard to the purpose for which they were hired – selling (hence, my quote to start this post) and on and on.

Any market in which the only critical factor is price is by definition a commodity market. - Scott Bedbury, former head of marketing, Starbucks

The fact is advertising agencies are now in a commodity industry and it’s a situation of their own doing. They are not unique in what they do, what they say, how they say it, what they offer, and they are unable to tie what they offer to results. Real results. They simply don’t stand for anything.

Yet they claim to know brands and positioning. They counsel clients on focus, on clear brand differentiation, on talking to customers. They need to take a dose of their own medicine or they’re going to quickly become more irrelevant and commoditized than they already are.

For fun I took a look at the web sites of five huge, history-rich and and very traditional ad agencies and evaluated them. (NOTE: The agencies I used to work for and with didn’t fit the huge size or the quintessential Madison Ave. shop in my mind so I'm not trying to push the peanut under the rug on that one.)

I call it my Agency Irrelevancy Scorecard®. It's a proprietary, top-secret system that takes a look at their theme/tagline, client industries, any proprietary trademarked processes, how they do on touting real business results, and what their core competency is.

Leo Burnett
Line: We’re idea-centric.
Clients: electronics, greeting cards, fast food, credit cards, cars, cigarettes, cereal
Trademark process:
Start clean – “we use exhaustive analysis to get to where a client’s brand can live and where a big idea can flourish.”
Amplify – “brand amplification is our media-neutral approach of taking a big idea and amplifying it so that it resonates with consumers.”
Stay restless – “we’re never quite satisfied. We believe the only way that our brands can become, and remain, leaders is by pushing ourselves and our work harder than the competition pushes us.” (This reminds me of a Chris Rock bit where he was talking about people wanting credit for things they should be doing, “I take care of my kids"- YOUR SUPPOSED TO YOU DUMB@$#%*!
"I've never been to jail"- WHAT YOU WANT, A COOKIE?”)
Results that are hokey: There is an entire section called “Delivering Results.” It consists of internal ratings of creative work and awards that have been won. Those aren’t results. Results are how much did your work contribute to sales, and how much are the sales.
Their core area of expertise (industry, medium, method): none listed

DDB
Line: “Before we describe "how we do it", it might be an idea to tell you what the "it" is. The "it" is the creative generation and execution of ideas that change the way people think about brands.”
Clients: beer, tourism, board games, jeans, grooming products, food, cars
Trademark process: None
Results that are hokey: Overall, they do a good job in most case studies to put some number to it, e.g. Unilever Marmite “command a 30 percent price premium and double digit growth.”

However, they also have this one for bud.tv, which as an initiative holds the record for loudest sound of a toilet flushing away money in an online space.

“created a video spot that reached a viral audience of 2.4 million viewers on video sharing websites, blogs and via email across the country. In two week period after its release 300% increase in traffic and 340% increase in online discussion.”

Now, let’s assume bud.tv were actually a successful product – 2.4 million viewers doesn’t mean sales. Remember Steven Heyer’s “Don’t mistake presence for impact.” And, since I doubt the goal of the campaign was to do something in a two-week period, I’d be curious why they ended the time period there.
Their core area of expertise (industry, medium, method): none listed

Y&R
Line: We energize business.
Clients: copiers, cars, tools, soup, airlines, professional services
Trademark process: BrandAsset® valuator – energy is a quantifiable value in a brand. “only Y&R can measure it”
Results that are hokey: Their work for Land Rover led to “1.4 million unique visitors to a site and 11,000 requests for the new LR2.”
Their core area of expertise (industry, medium, method): none listed

Ogilvy & Mather
Line: An agency defined by its devotion to brands. We believe our job is to help clients build enduring brands that live as part of consumers’ lives and command their loyalty and confidence.
Clients: professional services, hair and soap products, cellphones, routers, toys, food
Trademark process: proprietary way of thinking and working called 360 degree brand stewardship ®
Results that are hokey: I can’t find any specifics on their site, which is one way to avoid creating hokey results. In their Motorola work, they did say that their “360 Degree efforst have had a dramatic impact on the brand, increasing market share and making it top-of-mind with hip, tech-savvy consumers.”
Their core area of expertise (industry, medium, method): none listed

J. Walter Thompson
Line: We create ideas for our clients that people want to spend time with.
Clients: liquor, oil & gas, apparel, television, cars
Trademark process: none, I can barely navigate the web site
Results that are hokey: Not even a description of the campaign, just some posted work
Their core area of expertise (industry, medium, method): none listed, which, like the others, likely means they'll do it all, if you just pay them

Again, most agencies simply don’t stand for anything. They can't claim to be the best at this type of marketing, or the expert in this particular industry, or to have found a great way to tie what they do to real business results. If you work for an ad agency and are reading this, think about where you work. Does it honestly stand for something that in the mind of the customer makes it more remarkable than the others? If so, let me know. I can think of less than a half-dozen agencies that are nationally known that have created a unique, relevant space for themselves. The rest are rearranging the deck chairs on the Titanic.

My next post will be thoughts I have on a few possible remedies that could help pull agencies out of the commodity business and try to ensure relevancy in coming years.

Denmark is rockin' along

I apologize for this little overview of Denmark but I can't help myself, it's showing up everywhere.

My mother is Danish so I grew up speaking the language, spending summers there, attending summer camp, hanging out with my family and learning to have a great appreciation for the Danish pace of life, humor, beer and the emphasis they place on design(here and here).

Needless to say, I've been super jazzed to see little Denmark, with a population of just 5 million, pop up quite often recently. A method we learned in our Observing Users class was developed by Danes. Jakob Nielsen was here last week to speak during a lunchtime lecturette. A team of ID students recently got back from a research trip to Copenhagen. And I just found out another student has a Danish mother.

In the last two issues of BusinessWeek there have been stories involving Denmark – designers' power at Bang & Olufsen and the growth of small businesses in the Nordic countries.

I recently finished reading Clyde Prestowitz’s book, Three Billion New Capitalists (which is fantastic, eye-opening, and a call for arming yourself with unique skills), and in it he writes, “In view of American disdain for the welfare state, it is fascinating that in the World Economic Forum’s 2004 ranking of the most competitive countries, four were the Nordic countries of Europe, the ones with the biggest welfare states.”

And finally, according to various reports the last couple of years (here and here), Danes are generally super happy.

They happen to also have some great design strategy and innovation firms such as ReD Associates and Kontrapunkt.

I didn't even mention that great contribution to childhood, Lego. Overall Denmark is a pretty rockin' place. Fun to see it showing up. To paraphrase Field of Dreams, "Is this heaven? No, it's Denmark."

Jørn Utzon's little building in Australia

A Poul Henningsen lamp

Toolkits

I keep a running document of great quotes that I’m constantly adding to (31 pages so far). It includes quotes on everything from business to life. I recently re-read this one from Roger Martin:

I see creativity as central to design strategy. For me, design is centrally about creating options or possibilities that do not currently exist, not choosing between or among options that currently do. So at its heart, it is about the creation of something new. This highlights the difference between business administration and business design. Business administration entails the intelligent selection from among existing known options and the taking of action on the selection in question. Business design entails the creative production of a new option that is superior to the existing options.

- Roger Martin, Dean of the Rotman School of Management, University of Toronto

It got me thinking about a traditional business administration toolkit and a business design toolkit. I realize these aren’t absolutes, that there are MBAs taking design classes at places like Kellogg, and that designers use hard data as well. But, building off the above quote, I thought it would be an interesting exercise in the different approaches to uncovering problems and finding solutions.

Business Administration Toolkit vs. Business Design Toolkit
Focus groups vs. Ethnography
Statistically-valid surveys of hundreds of customers vs. Interviews of a handful of extreme non-customers
Free-for-all, unfocused brainstorms vs. Focused, calculated ideation sessions
Benchmarking your industry vs. Benchmarking unrelated industries
High-fidelity, functional prototypes shared with management vs. Down-and-dirty, iterative prototypes shared with end users
Mining of hard facts/data vs. Observation and uncovering of emotions and unarticulated needs

This is just a first pass but I’d love to build a thorough list of tools. What else do you think should be added or deleted?

More Keeley-isms

We had another Design Planning class with Larry Keeley this past Monday where we discussed convergence, frameworks from Michael Porter, some keys to being innovative and more.

There are always great quotes from him that I find myself trying to quickly write down. Since I’ve shared a few in an earlier post and have a couple more from this class to list, I figure I’ll start posting Keeley-isms that strike me. There’s no way I can try to capture the energy, knowledge and excitement of a lecture, so these are just short snippets and quotes that I think are informative.

“The unique thing about designers is you can actually make stuff. That ability is increasingly rare…to be able to see the artifacts in the world as fungible and not fixed. It’s a really rare skill and unavailable, unthinkable to most”

On convergence, “From time to time and not very often, fields retread themselves and they smash together. Think of it as tectonic shifts. When there is a really big convergence, in their wake new conditions come along that have different degrees of hostility, mostly for incumbents, and opportunity, mostly for new entrants.”

“If you want to be great at innovation, notice things before others, commit to them before others, and know the consequences down the road. It’s about courage.”

More Interruption-based Advertising Thoughts

Seth Godin just wrote a post on Facebook’s new advertising strategy, where he addresses one of the problems I also wrote about in my Google Interruption Media post – essentially that just because interruption-based ads are hyper-targeted they’re still interruption ads.

He writes, “Any platform that makes ads a distraction or a cost is always going to fail compared to a site where the ads are a welcome part of the deal.”

Permission-based marketing (coined by Seth Godin in his book…drumroll please…Permission Marketing) is one of the few options companies have to be relevant to customers (the main one being the creation of meaningful product/service offerings).

I’m going to wait a bit to see what the shopping element of Facebook looks like. As Sam said in a comment to my Google post, “I think (as a non-professional marketer) that the future is continium advertising, ads that extend the experience of the audience.” And there’s where the shopping element could be more seamless and a game-changing opportunity for Facebook, or someone else innovative, down the road.

The person/company that solves the ad relevance issue will receive riches beyond their imagination and, more importantly, the eternal gratitude of the rest of the world, which is tired of seeing hokey TV spots, copy-heavy print ads and giant inflatable coffee cups on the roof of their local Dunkin’ Donuts.

Class projects at ID this semester

I apologize for not writing much in the last week. We’ve been crazy busy. Partly as an excuse but mostly because I think you might find it interesting, I’ve outlined the cool projects my teammates and I are working on. It shows the breadth, the real-world application and the problem-solving ability of design.

Design Planning Workshop
As I mentioned before, the DPW team of eight students is working on a project to help a major retailer better understand Generation Y and their shopping/retail habits. We were lucky enough to visit their headquarters last week where my teammates put together a killer presentation, we got a tour of the offices and were able to meet with members of various departments. This project is a full semester, starting with ethnographic research and ending with design concepts and broad strategic recommendations to the client.

Observing Users
For this class, our team of four chose car-sharing services, specifically IGO. We spent the first part of this semester-long class on learning and practicing the tools and methods of observation. The last ten weeks of the semester are focused on doing user-centered research for our project, gleaning insights and translating those into meaningful concepts.

Design Planning
For Design Planning, we broke into groups and were tasked with choosing a topic related to 19.20.21 – an initiative to address issues surrounding the 19 cities that will have 20 million residents in the 21st century, such as health, food, water, infrastructure, information flow, and more. My team of three is focusing on talent, specifically the migration of knowledge workers across cities and how a platform for tracking these knowledge workers will help cities cultivate, attract and retain talent. Attracting talent is the bedrock of a city, providing a solid tax base, new businesses and industries, culture and more.

Service Design
For this class our group of four students chose FedEx Kinko’s as our topic. We have two professors for this class, one is the vice president of innovation and concept development at McDonald’s, and the other is head of the service design practice at IDEO. They asked the class to find an opportunity to innovate an area within a service business and build that out. We feel FedEx Kinko’s has some great strengths to leverage and areas for improvement.

Of these projects, only the Design Planning Workshop is sponsored by a client. The others we selected. It’s great to apply what’s learned in the classroom and in the readings to the real world. Obviously in some cases we have to make assumptions but it allows us to put methods into practice, learn more, and also create portfolio pieces to share with prospective employers. I'm really getting a lot out of this and my appreciation for the power of design continues to grow. After all, what's great about these projects is the breadth. We're using design to understand Gen Y for a brick-and-mortar retailer; explore services with IGO and FedEx Kinko's; and how to improve the quality of life for people in megacities.