Nerve Collective

Thoughts & Musings

Agency-Client Relations Hit All-Time Low

Such is the headline of this article, published yesterday in Adweek. The opener:

“Once upon a time, the agency was the most important outside relationship most clients had,” said Bill Duggan, group evp for the Association of National Advertisers. That is no longer the case.

No kidding.

“The industry really is at a breaking point,” said Crossmedia CEO Martin Albrecht, “because clients don’t see the value, period.”

What could be the reason? A piece like this would be a great opportunity for a little introspection on the part of big conventional ad agencies. What’s offered up instead is mostly a list of agency-side grievances about Fortune 500 procurement processes, big client RFPs, falling rates, and lengthening payment terms. Buried deep down in the article, however, is this interesting nugget:

Greg March, who launched Noble People after leading Wieden + Kennedy’s media team, said clients may just be “accurately valuing something that has become, in fact, a commodity—especially on the larger end of the agency services spectrum.” In other words, large brands and conglomerates can almost always grow profits by cutting costs, and marketing will inevitably be among the first on that chopping block.

In other, other words, a big part of the reason large clients aren’t recognizing — or paying for — big agency value is that they’re not seeing very much of it. Most traditional ad agencies have jettisoned many of their own high-value strategic and consultative services to focus on production and implementation, which earns them a lot more money. That in the end these big firms simply become carbon-copy executors of carbon-copy campaigns should come as a surprise to no one.

Seems to us that instead of spending time complaining that they don’t get no respect, the big firms ought to be focused on finding ways to earn that respect back.

When to Break the Iron Rules of Branding

If you were forced — say by some half-crazed, on-the-edge marketing executive — to boil down the rules of branding into a single word, that word would be “consistency”. Define the way you look, define the way you talk, define the way you act, and work it, work it, work it until the world understands who you are and what it can expect from you. Call these the Iron Rules of Branding. Break them and risk confusing the consumer, wasting resources, and frittering away hard-won brand equity.

There’s important wisdom there. But the time comes when strict adherence to The Brand Commandments brings risks of its own. Chief among them: allowing your clean, starched and ironed, tightly laced brand to become a straight jacket. For there comes a time when every organization needs to do something….wait for it…new. And it isn’t always easy to communicate “new” with an old brand, no matter how successful it is.

“New” is energetic. It’s inspiring. It’s attention-grabbing. Consumers love new. The trouble is, depending on just how new and different your company’s “new thing” is, your old brand banner might not be up to the task of conveying the proper excitement. The job may require a sub-brand, possibly even a separate brand.

New brand? Oh thank you, no, I really shouldn’t. Maybe in the fall, once we’ve had a chance for Research to look the whole thing over. And the executive team. And the CFO. Oh dear, is that the time? I really must be going. I’m late for a meeting. So good to see you, we must do this again sometime. Next year perhaps. Keep in touch!

The little brand manager inside us always starts to sweat at the thought of venturing outside the confines of a well-maintained parent brand. But try an experiment. Take your company’s new thing and imagine it next to your current logo. In an ad. On a press release. Is the excitement adequately conveyed? If it is you’re good to go (though it might be worth asking yourself at that point if this new thing doesn’t need a little more pizzazz). If not, it might be time to start planning a bust-out. God’s speed!

Brand Architecture: It’s Not an Org Chart

Had a lively discussion with a new customer the other day about the definition of a brand architecture. What exactly is it? Most companies conceive of a brand architecture as simply an externalized organizational chart.

Triple A Aeronautics has three divisions: Consumer Products, B2B Products and Government Products.

And that's the brand architecture. Although really it isn't. It's a structural description of Triple A, conceived for people working within the company as a tool to help them navigate it. As a concept it's of very little use to people outside of Triple A, some of whom might be considering purchasing some of Triple A's products. It tells them little of substance, for example, about the types of products Triple A sells or the market segments Triple A serves, and nothing at all about the value of those products or the types of customers Triple A hopes to attract. 

A good brand architecture can do that. Well maybe not all of that, but it can go a whole lot further than an org chart when it comes to making your company accessible and attractive to the people out there trying to understand and use you. 

How do you design a brand architecture? Start by putting yourself in the shoes of someone who's never encountered your company before, and try to anticipate the needs they might have as they seek to understand both you and your various product lines. You might be surprised at what your company structure looks like when viewed through the lens of customer needs — and shocked at what you aren't telling people about the high-value products you have to offer them.

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The Brand Compactor II: Taglines. Are They Possible Anymore?

Tagline. Slogan. The words are essentially interchangeable. When most new companies think about developing an identity, they think about a logo, then usually a tagline or slogan to go with it: a few catchy words that will cement the brand in the minds of consumers (and maybe, just maybe, if the tag is clever enough, it will ascend into the firmament of the all-time most memorable, up with the just-do-its and think-differents, where it will shine like a star in the marketing sky...forever).

Yet the trouble with taglines in the 21st Century is that there aren't many of them around anymore. Most of today's biggest brands have either dropped theirs (Microsoft's "Be What's Next", for example) or never had one to begin with (Google, Starbucks, Facebook). A few brands soldier on in the genre. Twitter has "It's What's Happening" and McDonald's is still using "I'm Lovin' It", yet tags are almost totally absent among today's up-and-comers. One exception, "Shave Time, Shave Money" used by Harry's Shave Club, has gotten some attention, but few would deny that it's more an ironic joke than a serious attempt at a tag. 

So what's behind the death of the tagline? Some blame technological changes like tiny smartphone screens and social media character limits. Others point to trends like the rise of niche marketing, where brands need the flexibility to push different value messages to different audiences. Still others talk about the pace of economic change and the need for brands to be able to turn on a dime to chase a new opportunities or demographics. 

All have merit as far as they go. Yet the ultimate truth lies in deeper shifts in the way we consume messages and view brands. The first of these is all about attention. If you've read the first in this series of posts, you know that brands are becoming increasingly compact items. To keep up with today's fast-moving consumers, they need to be small, aerodynamic and densely packed. In a day and age when audiences will barely slow down to read your company name, who's going to stop to absorb a tagline? At least a few of your key attributes had better be reflected in your name, or you're already behind in the race for brand recognition. 

A second and probably even deeper shift has to do with power. There's been a change in consumer attitudes over the last two decades. Traditional workaday suspicion of marketing claims has hardened into profound, deep-seated skepticism. Amplified mightily by social media, that skepticism has created a fundamental power shift, away from the brand and toward the consumer. Today's brands are no longer in the driver's seat when it comes to telling consumers who they are. Today, it's consumers who tell the brands who they are. Taglines, what are those? I'll decide who's delivering on what brand promise, thank you very much!

Does this mean tags are totally useless? Not necessarily. For a newly minted brand, the right tag can act as a clarifier, an elaboration on a name, a product feature or a benefit. For an established brand, a tag can serve as a reminder of what's always made it great. But be warned, tags don't carry the weight they once did. Good ones can still prop a brand up. Bad ones on the other hand can make a brand look stodgy, insincere and out of touch. So write wisely. And when in doubt, don't. Today a tag is what you might call an optional extra.

New Transmission, Runs Good

We hate to beat up on traditional agencies too much. After all, a lot of our good friends still work in them. But you know how it is, sometimes a perfect metaphor pops into view, and you just can't help yourself. 

Like this afternoon. I was stopped at a traffic light fiddling with my mirrors, when I happened to glance up at the car in front of me. What a beater! Cracked window, rust around the keyholes and emblems, smoky tailpipe bouncing to the beat of the ragged engine. After a moment I noticed a peeling sticker sitting slightly askew in the corner of the rear window. It was the logo of what used to be one of the hippest boutique ad agencies in town. And no, I'm not making this up. 

I imagined the thing sliding up to a curb to pick up a well-dressed CMO. "Hop on in!" says the account exec behind the wheel. "She runs great!"

And gets almost nine miles to the gallon too.

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The Brand Compactor I: Naming

There’s nothing new in the observation that time and attention are in short supply among today's audiences. However it’s interesting to reflect on exactly what the Great Audience Attention Deficit has done to the structure of brands themselves. Naming is an interesting case study. Once, a new company could feel fairly confident in giving itself a rather generic name, trusting that later marketing efforts would generate excitement about the brand. 

It didn’t matter so much if you were called Acme Industries, so long as your marketing message was strong. Customers would notice a good headline, or so it was assumed, then follow the breadcrumb trail from the headline to the copy, then on to the website, to the product information — interest and trust building all the way — and finally to the point of purchase.  

Can you imagine a consumer with that much time on his or her hands these days? Not really. Which is why brands are under ever-greater pressure to squeeze themselves into ever smaller, tighter packages. Little calorie-loaded morsels that audiences can consume on the go, like a long distance runner gulping down a glucose packet: received, digested, now run run run! 

The ideal name in the age of the compacted brand? One that packs a fistful of brand attributes — maybe even a whole story — into one, two, or three words. Big Ass Fans does that, whether you love the name or hate it. The Boring Company does it, so does Bitcoin, Brandless, Misty Robotics and many others. All manage to communicate something unique and memorable in their names, along with a concrete description, and maybe even a little something about their company attitude. 

Never heard of one or two of these companies? Try a little thought experienment: make up your own story about what they do based on the name alone, then Google them. You'll probably be right. 

More on the subject of compact brands in the days and weeks ahead. Next time: tags!

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Warts-and-All Marketing or Just Good Old-Fashioned Mysticism?

A series of print ads for Guillow’s balsa wood toy airplanes by The Johnson Group in Chattanooga, Tennessee has been getting some attention lately. The ads appeared in the most recent Communication Arts advertising annual, and they're pretty darn good looking things. They sport lovely photo/illustrations of Guillow's planes in various states of distress, with the thin wooden wings and tail falling off, or the fuselage broken. "Built to last. An afternoon." is one headline. "Some assembly required. Plus, even more re-assembly." is another. They're a lot of fun in other words, mostly because they ring so true. A kid gets about a dozen throws out of a Guillow's plane before the wings and tail start to splinter, crack and break.

Which raises a question: how much business sense does it really make to call out Guillow's planes' break-ability so boldly? We've heard it argued that headlines like these — that fearlessly proclaim negatives — are part of the brave new world of advertising, the one where manufacturers don't hesitate to talk about their own product's drawbacks. Age of transparency, getting real with the consumer and all that.

No doubt consumers both want and deserve more transparency. But let's be honest: how far can transparency really be taken as a strategy? Imagine a totally transparent car insurance ad. "We'll pay to fix your car if you get into an accident. Unless we total it. In which case you'll have neither a car nor enough money to buy a new one." How about a wireless provider? "Crystal clear, low-cost calling throughout the continental USA. But then there's the 2-year contract. Also if you ever have a problem that requires talking to an actual person, well, good luck with that."  

We'd argue that there really is no such thing as warts-and-all marketing. Even in the case of this toy campaign. We'd simply call it good mysticism. And by mysticism we mean the ability to see to the heart of matters and perceive deeper truths (altered state of consciousness optional). The deeper truth here is that a broken Guillow's plane isn't really broken, it's just a different kind of toy, one that opens a door to a different kind of play.

Ask any kid. Cobbling one of these planes back together and trying to get it to fly straight after a tail wing splits is actually part of the fun. The whole thing becomes an exercise in experimental aviation until you've mixed, matched, swapped out, pared down and trimmed every piece seven or eight times, until there's virtually nothing left. The play finally ends when you can't get more than a few feet's worth of float out of it. All that's left to do at that point is attach a lit firecracker to the fuselage and re-enact the final aircraft carrier sequence from the movie Midway

Or so we've been told.

All of which is to say that what The Johnson Group has achieved here has very little to do with transparency, and much more to do with identifying and illustrating a deeper dimension of value. Three bucks buys you one darn good afternoon's worth of play, whatever shape the plane may be in. It's terrific insight and skillful writing. We salute it!

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Strategies for the Story-less

Marketers have been in a mad scramble the last decade or so, trying to keep up with the pace of change in the industry. One thing we can all take comfort in though, is that for all the churn, one key fundamental hasn't changed: marketing is still all about the story.  

That story can be either real or concocted. The former is immeasurably better than the latter. Made up stories have no resonance, and because they don't, they haven't got any power to move any sense of the word. 

But what if you haven't got a good story to tell? Not every product or company has one. For every pickle company whose owner has a grandma with a secret state fair-winning recipe, there's another that was founded by two guys who simply thought there was money to be made in the craft pickle market. 

So what do you do when you know you need a story but the client can't or won't supply one? Here are a couple of strategies that might help:

Focus on the process. Odds are your pickle guys entered the business because they felt like they had a special angle on the product. Artisan processes? Higher quality? Flavor combinations no one else ever thought of before? Get in there and drill baby, drill. 

Co-opt someone else’s story. No I don't mean steal a story. I mean literally use someone else's. The pickle makers may just be in it for the money, but odds are that at some point they've been inspired by someone else who came from nowhere, was a true innovator, or exemplified a cardinal virtue. Hero worship is itself a compelling story line. It shows humility and humanity. 

Tell a fairy tale. This may appear to be a concocted a story, but there's a difference between a made up narrative and a fairy tale. A fairy tale is transparently fictional for one, it's also a.) entertaining and b.) there to make a point. "Once upon a time" isn't a half-bad opener for a block of copy. "There's an old folk tale that says..." is another. You could do worse!

Those are just a few. With a little thought you can probably come up with a few more. The story lines these strategies generate may not be Dickens, but they have the virtue of being real, and that counts for a lot in the days of the inauthenticity-sniffing consumer.

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Why is the Traditional Agency Model in Trouble?

Money, obviously. Traditional ad agencies are running out of it. Profits are down, which seems counterintuitive in an age where there are more products than ever competing for mindshare, more (and more varied) types of media that can be enlisted to disperse messages, and most importantly plenty of consumers around with money to spend. Considering all that, why are traditional ad agencies suffering?

It has to do with the way traditional agencies make money. They don't do it by selling creative services, that's for sure. Services are low margin affairs, no matter what industry you're in. No, when it comes to making a margin, it's much better to be selling goods. Ad men have always understood this, which is why every successful agency is a media brokerage first, a creative shop second. Being cost centers, creative departments barely cover their own expenses with their billings. All too often, they're loss leaders. 

So if ad agencies don't make money with creative, where do they make it? The answer is: by marking up goods, i.e. photography, TV and radio production, (in the old days) print production, but mostly media. The standard commission on media runs 15%, meaning that for every $100 a client sees on their media bill, $15 goes to the agency. It's not much compared retail markups which can be 100% or more, but it adds up quickly. McDonald's, the world's biggest advertiser, spends about $1 billion on advertising every year. Under the old scheme that would have meant $150 million in commissions to the lucky agencies placing the TV, radio, outdoor and print. 

But then things don't work quite like they used to in the modern digital age. Up until quite recently, tracking ad results was an inexact science at best, total guesswork at worst. In 1990, McDonald's could more or less determine, based on sales figures, whether their new national ad campaign was working. The problem was that they had very little direct evidence as to which tactics were pulling the most weight. Was it the TV, the billboards, the print or the radio? Because they couldn't really tell, McDonald's had to spend in all directions in hopes of keeping sales up. 

That of course was great news for ad agencies. Some of the media tactics they sold to their clients were total losers and they knew it. But because the losers couldn't easily be distinguished from the winners without hiring (even more expensive) researchers, clients had little choice but to keep the spend going, and of course paying the commissions. 

With the advent of the internet that all started to change. The internet was not only a great ad deployment medium, it was a great ad tracking medium. Unlike a billboard or a TV ad, a Google AdWords ad can be clicked. Those clicks can all be tracked, and that tracking can be used to identify failing ads, which very rapidly go poof (and with them the commissions). Even TV and radio have become more or less trackable based on the numbers of consumers who actually do go to (CLIENT NAME).com for more information. 

Accountability. Oh horrible, horrible accountability. It's blown a hole in the ad agency revenue model you can drive a BMW 7-Series through. Which is why we're seeing epic shifts in the traditional agency landscape right now. Among them an historically unprecedented consolidation as mega-firms like Publicis and Omnicom try to buy profits and market share because they can't earn either one the old fashioned way (they even tried to buy each other in 2014). What happens when there's no profit left to buy is anyone's guess.

New-fashioned methods will have to be invented, clearly. As to what some of those might be, we'll talk about them in the next post.

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A Few Thoughts on McDonald's

Remember a year ago when McDonald's was over? The stock was tanking, management seemed out of ideas, and chin-stroking experts predicted the company's death at the hands of burger-hating, kale-loving Millennials. Funny the difference a year makes. Just last week McDonald's stock price hit its all-time high, and even some of the brand's harshest critics are expressing grudging respect for the scaled-down menu and the company's recent experiments with fresh beef.

Me, I never doubted the resilience of the brand. I watched the company from the inside for almost a decade as a reporter for its internal news publications, and I had every confidence in a comeback. Mind you, I'd seen mistakes. I was there for the now legendary Arch Deluxe disaster, by far the most dramatic of the two cycles of menu expansion and contraction I witnessed. There were other less noteworthy flubs along the line too, garden-variety missteps that every business makes, but which, because McDonald's operates entirely in the public eye, seemed magnified. 

One thing I never failed to be impressed by was the fierceness of their love for their customers — their obsession not only with pleasing them, but with keeping them safe (their food safety program, which goes entirely unnoticed by the public, achieves the food service equivalent of a moon shot every single year). I also saw the boundless creativity and willingness to try-try-again that we're all observing right now. Yes, the updated "we're not fast food" store architecture and rough-around-the-edges product photography seemed forced at first, but there's no denying they both work, don't they?

As for the menu, let's just say that if their customers want it, McDonald's will find a way to deliver it. Including kale. Right now a kale salad is being tested in California, along with garlic fries and Greek yogurt, sweet potato fries in Texas, and in Oregon new McNuggets that contain no artificial colors or flavors. Don't be surprised if many of these are adopted system-wide this year, and one or two become permanent additions to the lineup. 

Determined critics of the brand will continue howl about fat and calories and the "fake"-ness of the food. Expect McDonald's to keep right on changing and innovating in an attempt to satisfy even them. That right there is a brand lesson for everyone.