The Burden of Undifferentiated Advertising Agencies.

Standard

I have met with a many advertising agencies both as an agency search consultant and as a New Business Development person.  I have attended numerous conferences and have heard a variety of client and agency speakers all say the same thing.  Most advertising agencies are all alike.  Agencies listen and nod but nothing changes.  Agencies go back to their same Old Normal when the world is changing rapidly under their feet and the trap door is about to open.

I have sat in numerous meetings at agencies with client prospects or new clients.  Often the clients have parity products with no differentiating product benefits from their competition in a cluttered category where the consumer has plenty of choice. They don’t engineer anything of their own and have no proprietary advantages.  They say things like we are currently sold on price but want to take it another way.  There is nothing to take anywhere.  There is no point of difference. It’s a fruitless journey but if they have a budget the train will leave the agency station.  The Choo Choo of revenue.

The agencies all say the same thing.  We’d love to help you.  This could be an interesting opportunity or our agency thrives on challenges. Lots of smiles and bobbing heads on both side of the table.  That’s great the client says. The monkey dances for peanuts. It is the burden of an undifferentiated agency. The agency smiles and walks the client to the door.

When the client leaves the agency gathers around for the debrief. What are we going to do with this?  They’ve got no point of difference, they have nothing to sell. Let’s see what we come up with is the conclusion of delusion. The agency will go away and launch a campaign that has very limited chance of success.

Agencies attract those types of clients because they are those types of companies as well.  They do not have a unique positioning because they don’t spend time marketing themselves. They are the same commodity only in different categories. Since they have nothing unique to sell they often just differentiate on price.   They also drop their drawers often and give away their ideas for free because they have no choice.

They are on a path to extinction because this strategy isn’t sustainable in the New Normal.

I remember visiting an agency in Lincoln Nebraska when the world was melting in 2009.  I was speaking to the local AMA Chapter but stopped in for a visit.  I met one of the agency principals and I asked him how many people work here?  120 he said and we haven’t had to let another go. That was a great achievement in those days when almost 3 million people lost their jobs in 2008.

So what do you attribute your success I asked?  We have expertise in these four categories and that is all we chase.  I had read his Linkedin profile and pointed out that he had experience in the healthcare vertical I said.  Do you chase that?  No is what he said.  We focus on our differentiated four verticals of expertise.  Nothing else.

I didn’t think that focusing on vertical expertise was the top tier of uniqueness but it was enough to make them a success. Most agencies just focus on nothing and just let things ride.  It is going to be a short journey.

Advertisements

5 thoughts on “The Burden of Undifferentiated Advertising Agencies.

  1. Hi Hank,
    I suspect we all agree that having a USP allows one agency (or client) to stand out. But I think your article is a bit harsh and demeaning to ad agencies–as in, “the monkey dances for peanuts.” I would suggest that your blog article is itself an old/tired “normal” consultant’s story that has been told for years as a pitch for new business consulting. No uniqueness in that approach! Perhaps discussing the dramatic changes that agencies have been adapting to, some faster than others, would give some credit to agencies. Perhaps recognizing that some full service agencies, that serve a wide variety of needs, might be the “unique” positioning itself if that diversification serves a wide need. After all your years of experience, I’m surpried that you took so long to recognized that vertical expertise might be the unique difference for some agencies in their market. My point, there are lots of things that demonstrate differences. It might be something as basic as the personalities, location, client history, vertical marketing, etc. Some show their difference by providing spec work, others do not. Guess what? Doing spec might be the positioning strategy for those agencies, especially young ones…and sometimes it wins the client! With nearly 40 years under our belt, our agency rarely does spec creative. But I wouldn’t demean those that choose to spec in order to demonstrate their creative differences and/or show their “unique desire” to work for that client.

  2. I think this same article was equally as accurate 20+ years ago as today… And my comment then would probably have been the same as it is now — if only client-prospects made decisions the way you suggest the agencies should be pitching themselves…

    Not really taking issue with the point that an agency should have and leverage some point of differentiation — anybody in marketing, and therefore by definition a marketing agency, should appreciate that. The challenge being to appear similar enough to be included in the consideration set and yet unique enough to stand out from the others.

    Unfortunately, what resonates with clients differs by client. Some larger clients might appreciate a branded process and strong track record but have the idea in mind that they do not want to be more than 20% of your billings (or whatever). Some clients might find value in your being an expert in a particular vertical while others actually hold that against you (this has happened to me). And price matters no matter what any of us thinks — interestingly, the amount it matters doesn’t necessarily correlate to the size of the client as I’ve had at least one with sales nearing $1 billion who spent money like it was $100,000.

    In my opinion, it’s the responsibility of the new business team to figure out the ideal point(s) of uniqueness to emphasize — and occasionally what to de-emphasize…

    This may sound as though I’m against the idea of marketing some unique aspect of an agency but that’s not true — I’m actually an advocate for purposes of marketing and selling the agency’s services. A story to tell, or maybe even a few different stories to tell, is all good — never, ever, never should be in the mode of asking the prospect “what do you need” or simply claiming “I can do XXX better than your current resource.”

    But I am not sure you can really connect the dots from that to eventual sales based on everything else that factors into the client’s decision process, so some practical expectations are appropriate…

  3. Thanks Bill. Yes there are many complexities to the puzzle. I am coming off a recent Think LA Mirren New Business conference where the lack of a point of difference seemed to come up again and again.

  4. In my opinion, it is not the undifferentiated ad agency but the lack of clear guidance by the client.
    When meeting with clients the first thing we always asked was,
    ” what is the communication objective ? ” You would be surprised at how many ” Uhhhs ??? ” we got back from the clients.

    Most of the time the client is very knowledgeable about his product, They just don’t have a clear vision of the category they are competing in, and what makes his product or does not make his product a “me too”.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s