Is "Agency" a bad word?

There was a nice roundup in yesterday's New York Times on the various agency start-ups in the Big Apple these days.

Wait. Did I say "agency"? That might have been a bad word.

The article quotes NY adman Brett Shevack as saying: "What's important is to lose the mentality of 'agency of record' and adopt the mentality of 'catalyst of record'." The article helpfully clarifies that this means "serve marketers as a force for change rather than as a supplier of the status quo".

Here we see the pervasive stereotype of today's ad agencies as backward, traditional, almost Luddite institutions, robotically producing 30-second TV commercials. (Sadly, there are some people and places in the industry where this stereotype is true.)

The word "agency" seems to be out of fashion. Last year a university professor told a large conference that the word "agency" means "the state of serving as an official and authorized delegate or agent". He helpfully clarified that "all agencies did was place the media for a commission and then provide the creative for free." This is factual, but incomplete.

If you check this definition of the word "agency", you will see not only the professor's definition but this one: "a business that serves other businesses". I like this definition better because it applies to agency models old, new and evolving.

To live up to this particular definition -- and Shevack's "catalyst of record" -- an agency of any model must learn the client's business, identify the consumer insight, set a clear business objective, and then help the client achieve it with strong creative in a channel-neutral plan.

If we all do that, "agency" will be a good word again.

Three lawyers walk into a blog about advertising...

It seems lawyers and the law kept popping up in my world this week. Yes, lawyers. Those people who water down our claims and tone down our prose.

Carla Michelotti and the CAF. Carla (pictured here) is the general counsel at Leo Burnett and an effective, tireless advocate for commercial speech. She's a key player in the AAAA, ABA, IAA and other industry groups. She is also one of the most ethical people in business today. For all this and more, the Chicago Advertising Federation yesterday gave her the Silver Medal Award for outstanding contribution to the industry. The event was a fitting tribute with speeches by industry leaders past and present. On a personal note, Carla also saved my Super Bowl spot from a legal technicality. Thank you, Carla, for saving our spot and giving many other people the means of saving theirs.

Trademarks and IMC. Regular readers know that we've been working on a multi-agency IMC project. As part of the process we make sure our selling language is accurate and ownable. One of the lawyers we work with observed that messages in one channel may have a slightly different legal interpretation in another so we should be careful to compare notes with our partners in other disciplines.

Argentina's new law governing media. As a former Argentine resident, I follow all news about my former home, especially when it concerns our industry. The current government passed a law restricting media ownership and airing of foreign-made advertising. Two Argentine journalists explained on AdAge.com this week how these aren't just legislative developments; they force advertisers to rethink media strategy.

The rule of law is important and in the United States we often take it for granted. Lawyers remind us what we have and how to use it.

If you can't stand the heat...

McDonald's pulls out of Iceland, closing their three restaurants in the economically beleaguered country, according to this report from Financial Times. The collapsed economy is only part of the story -- the other part is that most ingredients must be imported from Germany, driving up the retail prices to unaffordable levels. This is not consistent with the "V" in McDonald's strategy of QSCV. On that point alone maybe this was an overdue decision.

UPDATED 28 OCTOBER 2009: The McDonald's pullout from Iceland inspired this WSJ editorial about the dangers of currency devaluation.

The power of the shelf

Much has been written about the rise and rise of retailers: the slotting fees they charge manufacturers, their influence over marketing of CPG products, and more recently the budgets devoted to Shopper Marketing.

Over the years I’ve watched this trend and appreciated the power of the shelf. On two previous CPG assignments I helped develop really powerful TV advertising that fell flat in the market because my client’s product wasn’t adequately distributed or merchandised (their version of the story, not mine).

Some of you manage only advertising, some only retail, some both and some neither. But all of you must keep in touch with what happens “on the street”.

Yesterday I spent the day with my clients checking stores in a medium-sized Midwestern city. Three things struck me.

The Reality of the shelf. Strategy back at the office means little if your product is not placed or merchandised well. This is very obvious, but admit it – how often do you really get out of that office and make a point of seeing what shoppers really see? My client and I had been discussing a portfolio management issue and based on what we saw in a dozen Food, Mass and DIY stores, both of us had our perspective changed at least a little.

The Clarity if the shelf. Many marketing questions are hard to answer from a spreadsheet. Under the luminescence of 400-watt halide lighting, however, it all becomes so clear. Yesterday I realized our pricing might be backwards and a contemplated new product launch has two existing products in its frame of reference I really hadn’t considered thoroughly enough.

The Power of Collaboration. Our traveling team was a mix of marketers, salespeople, data analysts, a researcher and yours truly. Discussing issues in the store and away from the office really drove new thinking.

I'll write a lot more about retail and shopper marketing in future posts. For now, see the above photo -- a cold and flu program at Kroger that offered real value to consumers. An excellent example of shopper marketing -- nicely done.

Get out on the street and see the power of the shelf.

A peek inside Draftfcb

Today on DRAFTFCBlog, my thoughts on the essential departments any agency needs.

Who provides social media?

The other day's question about who "owns" social media* leads to a related question.

Who provides social media?

This question came to mind upon reading an article in this morning's Adweek. The reporter describes a pitch for VSP, the eye-care insurer, where the client sought "social media" services from a range of public relations and digital agencies. VSP ended up hiring the Lewis PR agency and the EVB digital agency, who worked together. "There wasn't one agency or partner that satisfied all our needs," explained the client.

My favorite part of the article was the head of another digital agency describing the overlap of many agencies in the social media space: "It's like this gigantic Venn diagram where you can't make out the circles anymore."

Is that bad? I don't think so. In the same way that a world with three TV networks was served by traditional ad agencies, a world with a billion eyes reporting a billion things through a billion sources to a billion readers can be served by... a lot of different kinds of agencies.

In other words, technology has democratized not only the media business, but the agency business. In the old days an agency needed sufficient technological resources to actually make a TV commercial. The technology isn't as expensive in social media, so we wind up with many more providers.

A big caution here: We must not confuse technology with strategy. In the old days some agencies who had the technology made some really bad advertising. In the same way some modern agencies have the technology but don't necessarily have the smarts to use them effectively, i.e. to build their clients' businesses.

Conversely, some agencies and individuals have the smarts without the technology. They are capable of directing those who have the technology in a very strategic way.

These dynamics benefit clients because they can choose among many providers. The key is to choose provider(s) who understand the client's business and can fashion an effective social media strategy.

* Answer: Users, not any one agency.

Who "owns" Social Media -- ad agencies, PR firms, or digital shops?

This week the PRinciples blog featured an incredibly smart social media play by Draftfcb Vienna. (The agency needed to hire a new accountant). The blogger, a grad student, wondered if "PR or advertising should 'own' social media." This is not a new question; many in the industry are asking it.

My answer: all marketing firms should utilize social media when it makes sense for their clients' business. Would you ever confine the use of television to a single type of marketing firm? No -- ad agencies make TV commercials and PR firms make VNRs and B-roll. The same applies to social media. Different firms will use them in different ways. Writing as a mild-mannered executive for a great metropolitan ad agency, I'm happy to say I've worked on projects with most of the major PR firms in town and almost always find them to be creative, smart and professional.

The only quibble I have with the post on PRinciples is the assertion that ad agencies refer to social media as "digital media". No; we call it social media. I suppose it is a subset of digital media but these categorizations miss the point.

The strength of our ideas is limited only by the channels we imagine can carry them.

Lastly, none of us in the industry "owns" social media. More than any other channel, social media is driven by the people who use it. And that ain't us.