General Motors has asked its team of advertising agencies to take a 20% cut in fees this year and next. This article in the Wall Street Journal yesterday is just the start of more to come.
And guess what? Even though GM may cite economic and business model reasons for the marketing cutbacks, the money may not come back to the agencies…ever again. At least not like it was.
But now it’s front and center and things will never be the same. My article in Folio: this week talked about what’s happening with media companies adjusting to this change. Ad agencies are also seeing their business models begin to crumble. Of course, this is nothing new.
Scary part is, ad agencies and media companies, for the most part, are looking for the next great tool or next great piece of measurement that will make everything okay again.
One quick stroll down the exhibit row at Digital Hollywood in San Jose yesterday is all the proof one needs. Apps providers talking to Agencies about the next big thing. Tools companies talking to other tools companies about creating amazing new technology that will continually interrupt consumers, whether they like it or not.
The world wide web is all about the democratization of content that hands the power to the consumer. At the same time, literally hundreds of companies are creating "helpful" tools that brands can use to "control" their message and brand, and try to regain the power.
News to all of us: the power is gone and will never come back. Why do we keep trying to take the mass media model from years ago (that worked very well by the way) and try to place the same methodology to the web? Can’t be done.
What To Do
Nobody likes being the bearer of bad news. The point of all this is that, all evidence aside, this may be the greatest opportunity that agencies and media companies have ever seen. For those that choose to accept it.
In order to be relevant with consumers, brands need to be part of the conversation. The only way to be part of this conversation is to bring something valuable to the table. Think about your one-on-one conversations. Why would you talk to someone that has nothing valuable to say?
Information is the key. Brands must provide valuable information to their customer segments in order to create and sustain long-term, loyal relationships. Advertising of the past will be replaced by information in the future.
They need help doing it.
Media companies are best positioned for this because they understand the value of targeted, editorial content (regardless of channel). Ad agencies can fill this role as well, but the culture shock may be too much for them to handle.
Some media companies and agencies are starting to get this. They will be the new marketing leadership. Many won’t. It will be fun and sad to watch all at the same time. Hang on!