The Real Deal

The quality of work that a client gets is completely dependent on the people working on their business. Hence, the right way to measure an agency is by the quality and experience of the people they put on a client’s business. And the best person to answer that question would be a recruiter.

Just like people, agencies come in all shapes & states. There’s one agency that’s lost it’s entire regional management team last year. Another that’s just a nameplate on the door. And a third that’s not large but super-profitable. A fourth that swings at anything that moves. And a fifth that just can’t seem to retain it’s people thanks to a bad client. A sixth that’s still wondering why it’s in business in this part of the world…

How are people supposed to make decisions on which is the agency of the year? How is a client supposed to decide who to call into a pitch?

Ask a recruiter.

A recruiter knows which agencies are  hiring, what kinds of people are being hired, the pay levels, and whether the work will be organic (existing clients), or new business. They will also know which agencies/managers/clients have perennial problems, and those that have people who never leave. They are also well aware of agencies who’ve grown aggressively in the recent years but staffed it with part-timers.  And those that manage to retain all their average people as the stars keep coming in and jumping out.

Recruiters also have insight into the agencies dynamics and politics as they keep talking to those employees who are looking out.

In short, ignore the agency rankings, the PR spin, the hype over work done on other clients, and in other countries. Focus on the people who will work on your business.

There’s no such thing as the best agency. It’s all about being the ‘right’ agency.

Oh! And a Nielsen AdEx listing of top 100 advertisers will help.

If the media agencies, as a business, went through the process of evaluating the year gone by, what would we find? Decreasing client revenues, increasing staff costs, ‘talent’ retention, and a competitive set extending beyond the traditional media agencies. The #1 challenge, as all CEOs put it, is to attract & retain ‘talent’ even as most of them don’t invest in proper talent management systems or resources (SMG an exception of course).

Why don’t we have enough good people working on the business? Well, the standard and valid response is that we don’t get paid enough to attract the best. The fees have gone down, the media world has proliferated, client expectations have changed, consumers have become more complex, information is available almost real-time….a media agency today has to do more work, even as revenue decreases.

The evolution of the Indian agency talent is quite revealing. This business used to attract MBAs from IIMs. A lot of the agency professionals in their mid-40s are IIM grads. By late-nineties, the IIMs went to lucrative pastures. And the specialist MICA(ns) flooded in. By mid-2000, even MICA graduates weren’t joining the agencies, and older ones were leaving it. A lot of my fellow MICA grads are completely out of the agency business, leaving a big gap in the mid-senior level talent available to the industry. Now, it’s anybody with an MBA who gets into the business. Soon, it’s going to be anybody who can count. As our workforce turns more Gen Yish, attracting and retaining good people will continue to be a challenge.

The other way of looking at this is to realize that our way of doing business doesn’t allow us to hire good (expensive) people. The agencies have 80% of the cost invested in the fast-diminishing 2% part of our business. This can’t continue. Clients aren’t going to pay-more. Specialist/diversified services are healthy new revenue streams but aren’t going to prop-up the cost of getting the media plans out.

In the last decade, software codes, complex financial analysis, medical diagnostics, & even aircrafts are designed off-shore, in numerous locations. Why not media plans?

Media is such a dynamic and exciting area. But our way of doing things hasn’t really changed in the last decade. A lot of this can be attributed to the slow-moving nature of the quasi-monopolistic media owners. Why not move to an auction-based pricing system powered by Google for their inventory? There’ll always be demand given their market position. Media owners apart, it’s also our mind-set as media agencies that have put us in a spot.

The displacement of geography will not be made by the larger agencies. Their very size & legacy works against them. Larger rumbling elephants will be over-taken by the peanut-eating monkeys when it comes to productivity & profitability. And that’s a prediction for 2011.

Big buzz in a small market – Singapore’s Land Transport Authority (LTA) has put out a tender for the city’s bus shelters. The incumbents are JCD & Clear Channel. I wouldn’t be too surprised if SPH & Mediacorp go for it too. If they win, that would be too bad.

I can’t fault Mediacorp or SPH in going for this tender. The commercial imperative is clear. OOH is vibrant & growing in this mass-transit city. And in recent years, OOH advertisers have taken share away from TV & Press. If I were a stake-holder in either SPH or Mediacorp, I would love for them to bid.

But their success in this tender could end up hurting the medium, and collapse the market.

The reason OOH has grown is because the market is competitive, with multiple players offering their specialist expertise to advertisers. In OOH, we have bus shelters & bus-stop posters with two players in the space. In public transit, we have two other players. And they are all trying to get share not just from their immediate competition, but from the larger OOH & other media budget. This means that  In any given week , an average media planner will meet at least four, if not five, OOH owners – each pushing their case, and growing the medium as a result.

All of this will go away if either Mediacorp or SPH win the tender (assuming they are even bidding in the first place).  Their track record in diversifying outside their core-media and making a success of integrating it to advertisers is sketchy.

Let’s see if from an advertiser’s POV.

On one hand, there’s this established, globally integrated specialist OOH agency that can bring best-in-class ideas that can be executed flawlessly. These guys know what they are doing. And we have relationships with them regionally/globally.

On the other hand, there’s a dominant traditional media player with whom I already have an existing relationship. But there’s no group-media deal across their current media platforms. And they’r not really into OOH. They are going to lose buckets of money on their new venture, and squeeze me on their strong incumbent media.

hmm… tough choice isn’t it?

One could argue that Media Prima in Malaysia is making Big Tree work.  Yes. But Media Prima is far more innovative with their business models vs. either SPH or Mediacorp.

Mediacorp hit a home-run with their Xin-MSN model. Perhaps that’s a better approach to follow.

An even cooler thing would be for the telcos to bid for this. But I guess they are too busy with other stuff.

There. I have said it. Now I better get my kevlar suit on.

#usual fine-print stuff like these are completely my personal views etc etc.#

One of my most enduring beliefs in digital is the ability to track and optimize campaigns in real-time. Quite in contrast to say, TV, where spots need to be booked four to eight weeks ahead and most changes can only impact future campaigns.

In theory, on-the-fly optimization allows the advertiser to change the media formats, creative messaging, & media placements within sites & across sites rapidly in response to real-time data.

Well, two out of three ain’t so bad.

The reality is that advertisers can’t get out of a campaign or budget commitment made on a website without pretty much losing their budgets. Maybe, just maybe, the advertiser can postpone the budgets to the next campaign.

I want to get out of a site. I can’t. And with it goes the promise of being able to really optimize the advertisers  budgets online. And since I am getting out of a site because it’s not working, why would I want to come back and run another campaign on the same site?

Since when did the cool-new media start acting like my friendly neighbourhood monopolistic TV station?

It’s interesting to see the amount of buzz over digital OOH in the last few months. There are three conferences being held in recent weeks on this topic.  I am kicking off the key-note on Tue at Digital Signage World Asia (http://www.terrapinn.com/2010/digitalasia/index.stm). So I am obviously looking for great examples of OOH that integrates digital. What I am realizing though, is the appalling manner in which advertisers ignore the digital component of the OOH medium.

Case in point; I am stuck in one of these Interminable traffic jobs that afflict rush hour traffic into the business district in a key regional capital city. My attention is drawn to four large billboards of an advertiser, placed strategically across the four intersections of the stop-light. Bright colours. Brand Name. Nice picture. And even a web address (though different from the brand name). Fantastic. Until I noticed (the lack of) mobile.

Where was mobile? Especially since the advertiser was in the business of generating leads & building customer relationships.

It was a perfect opportunity – large amount of traffic, most of it stuck in a slow jam,  cut-through creative, prime location, even a web address. But the opportunity loss of not including a mobile response component was mind-boggling in a lead-generating business.

How many people truly remember the website address when the log-in to work? How easy is it to just punch in a sms to a listed number and start a dialogue? How about an app? Just why isn’ t there a mobile response mechanism?

Could it be the brief itself? One that emphasized visibility & not leads?

The creative agency most likely provided the strategic thinking, and maybe even the media plan. But it’s thinking analog media. The bulk of the media budget is in analog media. Getting it right is their focus. Adding in a web address is to be expected. And then we’ll let the boys from the digital side take over with their flash banners & social media strategy. They’ll drive the digital metrics.

This brings us to the media agencies – OOH planning is done by the traditional media planner, with little concept of digital media. Perhaps putting in the web address reassured everyone that ‘digital’ was integrated into the plan. But who connects the analog media to the digital world? Who turns awareness/visibility into lead-generating results? This’s the opportunity for the media agency. And every time one of us fails to take advantage of this and let the message dictate the medium, we do a dis-service to the advertiser.

I have no doubt that this campaign will win many awards. There’ll even be data that shows how the millions of dollars increased awareness, preferences, and even sales. But I do wonder…

Everybody agrees that mobile is the single biggest digital opportunity in the region. Getting it into our plans doesn’t require Four-Square strategies. Just a simple SMS mechanism.

I have a lot of ‘duh!’ moments on Facebook when I see the number of people (..cousin of a friend of my friend on FB) who leave their pages & photos wide-open for the world to view.

Yes, Facebook should do more to inform users about their data privacy, and they have come a long way since they started. But about a dozen years into the digital revolution, it’s time we stop cribbing about privacy and learn to deal with the nature of free media. After all, Google’s coming to our TV sets shortly.

I see privacy & data in the following manner:

More consumer information -> better targetting -> more relevant advertising -> more value to consumer. Repeat virtuous cycle.

If media is free , then the user pays for it with their time. That’s the golden trade-off consumers have made since the advent of free media. With targeted advertising, people pay for media with their personal information.

Media has always been subsidized, if not fully paid-for by advertising. With mass-media, targeting was based on demographics, which leads to massive spill-over & inefficiencies (the broadcast model).

Digital media is now mass – with the ability to better target users

FB just improves upon the idea – personalized targeting based on demography, geography & interests.

So, what’s wrong with it?

- It’s a free medium. Someone (i.e. advertisers) have to pay for the service

- It’s a free medium. What’s true of Governments is true of media (No taxes = no accountability)

- It’s a free medium. If they shut it down tomorrow, we have no recourse (not even publicly listed to sue)

- Users will see ads. But targetted advertising delivers more value (bald men get sun-block ads vs. shampoo ads). Enables brands to have ‘conversations’.

- Users are becoming web-literate. They recognize spam, don’t click-through for most banners, and in general, don’t divulge personal data. They will get there with Facebook too.

- The market place decides. If enough users get sick of this, they’ll leave. Anyone remember MySpace or Orkut?

PS: I also wonder if WSJ’s jihad on web-privacy (and Facebook) is Murdoch’s revenge for the MySpace killer.

The short history of web advertising is littered with the unmarked graves of discarded brand websites (to paraphrase a memorable quote).  Spurred on by eager agencies & well-intention KPIs, Marketers decided to go digital, created a site (or a micro-site), ran the campaign, and then promptly forgot all about it once the campaign got over. Along the way, they also realized that going digital involved a ton of work. The Marketer had to sort out the PR, activation, creative execution, media placement, tracking….

And now, here’s Social. Where the campaign never ends. So, who owns it?

The creative agency has a great idea that has Social at it’s core. The media agency, apart from grousing that it had a better idea,  can set-up the page and drive people ‘to be a fan’   But what happens after that? Who’s uploading the content, refreshing it, and managing the page?  Is that something PR should do? Should the BTL agency get involved in sharing the news about price offers & activation? Should the creative agency generate new creative material and upload it? Should the CRM agency start a dialogue with the Fans? Should the media agency continue with an always-on campaign that keeps driving traffic to the page? Who is analyzing the Fans interaction with the brand on the page? Link to e-commerce?

And is this all In-scope or Out-of-Scope? Who’s scope is it?

The truth is that all these agencies & some more, have a role to play in a really well thought-out social campaign that is hopefully part of a larger digital strategy. None of these agencies are tasked with thinking this through either. There are also many more wheels within the Marketers organization that need to turn for Social to fully bloom.  Unfortunately, in the rush to go Social, we are all veering dangerously into repeating Web redux. The result will be Marketers over-whelmed with loads of work because of Social Media, refereeing agency skirmishes on who does what, and finally, realizing that all this’s not worth the hassle. They do have other things to do, and there’s the rest of digital to sort out.

This will not help the Marketer or the agencies exploit the medium to it’s full potential. The fastest way to kill Social is to set up a Facebook page. And then do nothing after that.

KPI on doing social media: Check. How about doing it again? hmmm.

Wanted: Social Media Strategist.  On the client side.

Great news! Yesterday, at an industry function marking the establishment of the Digital Advertising Alliance, a Singapore Govt. minister committed to spending over $30m SGD to support the Alliance’s goal of growing the Singapore’s digital adex to 20% share by 2020 (it’s currently at 5%). You can read the official release here (http://snipurl.com/125tov).

But how significant is this move to 20% share by 2020?  Not much. Because it brings to fore The Singapore Paradox – Singapore’s digital spend is abysmal when compared to it’s internet penetration. Whether benchmarked against the U.S., the U.K., Australia or Taiwan – countries with similar or lower levels of digital penetration actually have higher share of digital adex (HK excluded but that’s for another day).

I think the 20 by 2020 number is too low, and is perhaps constrained by how digital is defined by the Alliance.

Is it Internet as we know it today? Maybe mobile thrown in. What about TV watched through the iPad? Or, interactive TV via your Hubstation or the Mio box? How about the ubiquitous Focus Media screens that serve real-time ads depending on the time, day, location, & the gender of the audience in front of the screen? Augmented reality linking magazine ads to your iPhone app?  If these forms of digital have indeed been considered, then 20 by 2020 is a very low number. In fact, I would posit that 80% of all ad spends by 2020 will be digital. And I have no idea of what’s coming down the pipe a few years from now that could redefine digital again.

We are in the new decade. And it’s about Addressable Advertising. The biggest opportunity for a small, diverse, affluent & a highly wired nation is to wring inefficiencies out of mass-media and generate higher value from targeted conversations. That’s what digital can do in Singapore. It’s also the only way for Singapore’s above-the-line advertising to grow given the high costs of media relative to other countries in the region, and the dominance of retailers.

What the Govt. can do is to push the telcos to open-up their systems for addressable advertising. the hardware exists today.  That single act will transform the industry. Singapore has the ability to be the World leader in addressable advertising. Very quickly.

But in a market where advertisers can’t even get a complete view of TV viewing, that’s perhaps too much to ask.

Have a great break.

It’s not uncommon to find a few Singapore media owners on the ‘blink & you miss it’ commuter flight to KL. After all, quite a few large TV advertisers have moved their decision-making hub to KL, and treat Singapore as an extension of Malaysia (I know this is grating for Singaporeans, particularly right on the heels of the spectacular NDP).

The logic is remorseless – Singapore is an expensive market to operate in. Clients everywhere are revamping their marketing structures for Singapore, sometimes keeping just a sales force in SG and the brand managers in KL. If China can be managed out of Shanghai or Beijing, and India managed out of Mumbai or Delhi – why not Singapore from Malaysia?

Singapore is a small market with a few dominant retailers, a simple market with monopolistic media ownership structures (though I would say that these media owners are quite flexible and accountable), & high CPRPs/CPMs. An appreciating SGD doesn’t help either.

Increasingly, given the high digital penetration & the transit-friendly nature of the market, TV budget shares have started to decline. Eventually, the print ads will migrate to Online. There will not be a need to do some many spot-plans. Digital can be done out of anywhere, and OOH doesn’t require the number-crunching that accompanies a TV or Press plan.

A dollar in Singapore yields far more media & market share growth in other parts of ASEAN. Some advertisers have already started supporting their smaller brands with just BTL and use ATL only for their larger brands.

This erosion of above-the-line spends, particularly on TV, will take a few years to play out. But barring something dramatic (like addressable TV or tighter integration of ATL spends with BTL accountability), it is inevitable.

When this happens, clients will inevitably ask their agencies to beef up KL and reduce support from SG. This will pose it’s own challenges on staffing, remuneration & operational efficiencies.

And Singapore media owners should start keeping an eye out on Media Prima CPRPs.

I was having lunch the other day with a media owner. He was asking me for some people he could hire for starting an in-house creative department. A few things emerged from that conversation:

1. Clients just don’t seem to have the budgets to pay for new creatives or a medium specific execution (say a print ad that needs to be reworked for OOH). They are the ones asking if the media owner could do the production too.

2. A lot of his clients are new to advertising, and to the medium. He’s growing the long-tail.

3. He wants to move beyond media budgets i.e. Increase wallet share from the client (media+creative).

4. Consolidate the media budget & throw in the creative execution for free – particularly for large MNC clients who don’t have in-market specific creatives.

5. Media agencies are increasingly coming to him with content/integration/production ideas as part of the media buy.

5. The media owner has most of the production talent in-house, though they are mostly involved in putting out his product into the market.

6. Other media owners already have established in-house creative teams/agencies. So this model clearly works.

When I asked him about the consumer strategy, brand-fit, execution details etc – he was fairly confident that it could be worked out. He wasn’t really seeing spectacular commercials coming out into the market anyway.

My recommendation to him was to just have a roster of freelance creative talent whom his company can tap upon, depending on the projects. Saves the media owner from the hassles of managing a department & the associated costs. I did refer him to a friend of mine, a suit, working in a creative agency, for being the go-to person he could hire on a full-time basis to do project management.

And I left the lunch thinking that we media agencies haven’t quite leveraged the media owners fully enough yet.

PS: There’s no such thing as a creative agency & non-creative agency.