What can advertising agencies learn from giant insects and characters from literature to help kick-start business in 2011?
Mountain stone weta are a group of insects that look like giant crickets and can survive being frozen for months at a time. They go into suspended animation (I know you love it when I go all esoteric on you) and resume their lives when they have thawed out.
Similarly, many agencies hunkered down and just tried to survive during the last three years as the frigid temperatures of a worldwide recession made it all but impossible to grow and thrive. Now, with the news the recession is over, they are busy trying to develop growth plans for 2011.
With industry analysts predicting 3 percent growth in the sector, the first order of business seems to be figuring out what lessons can be taken away from the recession, followed by trying to understand the impact of the new media and its attendant devices (smartphones, tablets, et al) on the future of advertising messaging.
In the Washington Irving story "Rip Van Winkle," Rip falls to sleep after overindulging and wakes up 20 years later to find the world has changed and almost no one remembers him. When advertising agencies plunged head-first into the recession, Twitter and Facebook had running starts but no one could have predicted that by 2011 there would be 50 million tweets a day or that Facebook would have connected nearly 10 percent of the world's population.
Millions are now carrying so-called smartphones able to access the Internet and each other. Google, Microsoft and Apple, with the introduction of software and set-top boxes, have their sights set on the TV industry. And with a quarter of broadband households already Internet-TV connected, 2011 promises to signal a major reset in the way advertising agencies approach their craft.
So what have ad agencies learned? First and foremost that it's hard to consider lessons learned when you're trying to survive. The talk has been about integrating a better understanding of digital media and new technologies, and recruiting a more diverse workforce.
The challenge is that during the recession, clients were forced to look for cheaper ways to do things -- and the experimentation led to the realization that there are younger, smaller and fleeter-of-foot organizations that can launch campaigns and reach consumers less expensively. Plus, the Internet has yielded a concept called "crowdsourcing" that allows clients to name their own price and have creative groups compete for an assignment by actually doing the work.
The reality is that advertising is an industry and the value of a good advertising agency has not been replaced by a Facebook page, an app and a creative geek working around the clock in his underwear.
Good advertising agencies have access to proprietary data and well-paid and educated staffers who know what to do with that information. Before a client bets the farm on an app, he needs to know the number of people, in his target group, who own a device that can use it.
Before a company settles on a clever message, it might be nice to have an organization that knows how to test the messages to improve the likelihood of success. Agencies have structure and processes -- the type of rigor that not only protects a client, but can be a serious factor in the success of their product or service.
For more than 60 years, the advertising agency J. Walter Thompson was as critical to the success of Kodak as any of their manufacturing processes or patents. The relationship between Ogilvy and IBM has spelled success for both for more than 16 years now. A major part of IBM's strategy is to be able to explain what it is they do and Ogilvy does a masterful job of fitting complex ideas into simple TV spots and print ads.
So the question to be answered is: Will the advertising business take the 3 percent and use it to focus on making the necessary changes and adjustments to be viable for decades to come, or will it try to hold on to old ideas like the record industry and be bypassed by new ways to reach consumers?
In Irving's story, Van Winkle found some family members and pretty much carried on as before. I predict that agencies, like the weta, awakened after a long, forced sleep, are hungry -- and those who have survived are eager to make the changes necessary to thrive.
Larry Woodard is a director on the Advertising Week board and chairman of the American Association of Advertising Agencies' New York Council.