May
31
Why Your Big Agency Won’t Get Social Media
Allow me to play Umair Haque for a moment and extend some of the thoughts jumpstarted by Mike Manuel’s excellent discussion of what he termed the ‘social media services gap‘ and the ‘social media services billing gap‘. I am in complete agreement with Mike, John Wagner, Jeremy Pepper and David Parmet when they note that it’s not about technology displacing solid approaches to PR.
I have decided this morning that I’m not going along with the idea that this is simply an evolutionary movement. I think there is a radical shift coming in outsourced communications services brought on by
- new tools and dispersed, on-the-fly team building processes
- new consumer expectations about attention and how companies should talk with them
- decreasing influence and strategy decay of the mass media that power the traditional agency model
- disappearance of the ‘gatekeeper’ value traditionally merchandised by PR shops
- the incongruence of the agency model with the need to meld strategy with tactics in the form of nimble teams that quickly work across a host of edges
- the inertia that must be overcome to retool large organizations to meet these new environmental challenges, and finally
- the increasing ease-of-use of media creation tools for video, audio, playlist creation, tagging, etc.
Umair, Jeff Jarvis, Scott Karp, Chris Anderson, Om Malik, Rafat Ali and many others are charting the strategy decay and subsequent contortions of tradtional media. What has not been as effectively mapped is the impact that decay has on other industries that are attached, remora-like, to newspapers, broadcast tv, publishing, and so on. Whenever we see a ‘new’ media approach from an advertising, media buying or PR shop, it typically involves shoe-horning some sort of branded message into a novel, tech-enabled channel.
“Let’s repurpose our ads for mobile phones.”
“Why don’t we make extreme ads to play inside video games?”
“Let’s make it easy to tag our press releases with delicious.”
“Let’s put out our releases via RSS.”
“How can we get our stuff into wikipedia?”
“Let’s do that wild posting thing with these mass produced flyers and our ’street teams’.”
“Let’s get all the bloggers to talk about our new product launch.”
“Let’s do a blog for our [consumer product] using [some brand mascot].”
Not all bad ideas, but all misdirected and a bit ham-fisted because these organizations are built to be in the content business. They exist to develop and distribute messages. In the world of social media, content isn’t king. Connection is king. We are all bringing our own share of content to the party now, and companies have to play a much different role in the coming conversations about their products and services.
Note specifically that I’m mentioning the outsourcing of the services as undergoing this sea change. PR will be more important than ever. How you interact with the multiple conversational edges that impact your business will be huge. I think PR has the odd mix of analysis, synthesis and quick response skills to thrive in this new environment. But not agencies as they are currently constructed.
Here are my observations from being around all sizes of ad & PR shops for the past nine years:
- Agencies are economically rewarding for those who own them; most use their agency experience for training until they can’t ignore the opportunity cost to go client side or start their own consulting practice.
- However large the agency, there is almost always a small bomb-squad of talent that creates value across the agency accounts. Yes, you need resources for large production, etc, but when it comes to the core, creative things agencies do, it’s pretty much my ten against your ten.
- The profitibility of PR shops is built on charging you three times the amount they pay staffers; If I run an agency, I’m incented to sell off-the-shelf media relations programs that I can largely staff with junior workers, paying them roughly $30/hour and billing you from $100/hr and up. I also make money on the senior staffers I charge you a crazy amount for ($175 to $300/hour for), but it’s harder for me to keep those folks around, given their opportunity cost. Plus, the margins aren’t as great for me.
- Lots of shops also make money on upcharging you for services they sub out that you can much more easily source and manage yourself now.
- Agencies have always been self-conscious about how to demonstrate value for their outsized fees, which will only get more difficult as the business becomes less about creating content. They have less of a black box from which to pull ‘proprietary’ stuff.
- The beasts need feeding. This could be a whole post, but at some point, the boutique firm you loved as nimble and innovative gets a certain mass and has to start acting just like all the other large shops — taking on shlocky work, underpaying staffers, mailing it in on certain accounts, etc. It’s not the people, it’s the model. (No, I don’t ultimately think Crispin will be different. God love em.)
“No, way,” you are saying. “Edelman has a blog. They hired Phil Gomes and Steve Rubel. Weber hired Jeremy. MMW has Tom Biro. Constantin Basturea went to a big shop, too.”
Great. I think the world of all these folks and their chops, but they are still isolated specialists within much larger organizations. People don’t scale, and, as I’ve said, the economic model of these agencies precludes them from searching out and hiring 20 Phil Gomes. Much more likely that a Phil Gomes will go off and find five folks like himself and trade on his big brand knowledge to help a smaller client roster find its footing when it comes to social media. (I’m just speaking hypothetically here. As far I know, Phil loves his new digs.) He can also do that faster and more effectively outside the firm, even than if he operated as a startup within the agency structure. As Edelman left Syndicate the other day, he noted that he was on his way to a meeting to stir things up. Only about 15% of his staffers were into social media, he said, and that was just too few. I liked what he had to say. I just think he has an uphill battle to remake his company.
It will become increasingly difficult to sell ‘access’ services. Access to media buyers & publishers, access to journalists and analysts, access to company spokespeople. (You know how agencies tremble when the clients ask for their media lists?) In our new world, people are increasingly accessible. Already, savvy startups are doing DIY PR via blogs and direct communications that is effective for their early stage needs. There is a whole other post to do on community marketing, and I’m not trying to touch that here.
Instead, communication people will come to be valued by how they improve conversations. Not start or manage them. Improve them. Plus them up. That will take a more seasoned practitioner working in closer concert with internal folks. Thus, I think the tendency will be towards smarter communication directors and managers rolling their own teams to form ad hoc social media bomb squads, and outsourcing very specific ad creation skills (and not strategy & messaging) to ad shops. (This is the Sergio Zyman approach.) Already the market for making elaborate :30 films and holding on to the expensive talent this archaic activity requires must be seeing strains. If not, it will.
In a YouTube world, speed, savvy and responsiveness of our communications (video included) will trump high-production values and the fantasy of a tightly integrated campaign.
Even scarier, imagine trying to salvage a business based on delivering content and allocating attention through a proprietary channel:
- Bacon’s
- PR Newswire
- BusinessWire
- Satellite Media Tour Companies
These guys are doomed in a hyperconnected, niched world, the same way that trade media are unless they remake themselves. That world isn’t here today, but it will be. What are you doing to get ready?
[...] Weblogs Work: Why Your Big Agency Won’t Get Social Media A long, long dissertation on why the large agencies are not understanding or fully embracing new, social media. And, many valid points that agencies try to shoe-horn old world solutions into new world media. That isn’t going to work – you need new thinkers that can think differently to do new media in a smart way. And that doesn’t mean knee-jerk “start a blog” mentality. It’s better to do nothing than do something bad – like launch a blog that isn’t necessary. [...]
Pingback by Blog Run » Blog Archive » Conversations, PR 3.0, Press Releases Live On! — June 1, 2006 @ 2:50 am
[...] Weblogs Work: Why Your Big Agency Won’t Get Social Media A long, long dissertation on why the large agencies are not understanding or fully embracing new, social media. And, many valid points that agencies try to shoe-horn old world solutions into new world media. That isn’t going to work – you need new thinkers that can think differently to do new media in a smart way. And that doesn’t mean knee-jerk “start a blog” mentality. It’s better to do nothing than do something bad – like launch a blog that isn’t necessary. [...]
Pingback by Blog Run » Blog Archive » Conversations, PR 3.0, Press Releases Live On! — June 1, 2006 @ 2:50 am
Big agency, small agency… why do you (plural) assume that broad external “conversation� is a universal good thing? That’s the weak link. It’s just not.
Social Media is a select service that’s good for a controlled audience in special situations. That’s why only 15 percent of Edelman staffers are into it. Hello!? Edelman is the lead evangelist and internally, they aren’t buying it.
- Amanda
Comment by Amanda Chapel — June 1, 2006 @ 5:45 am
Big agency, small agency… why do you (plural) assume that broad external “conversation� is a universal good thing? That’s the weak link. It’s just not.
Social Media is a select service that’s good for a controlled audience in special situations. That’s why only 15 percent of Edelman staffers are into it. Hello!? Edelman is the lead evangelist and internally, they aren’t buying it.
- Amanda
Comment by Amanda Chapel — June 1, 2006 @ 5:45 am
Great post. Big pr agencies should be very nervous. Customers and influencers want to talk directly with people in a company, hashing out ideas, beliefs, opinions, not “on message” intermediaties. PR people in general need to flip their thinking — it’s no longer about producing the “stuff.”
Comment by Lois Kelly — June 1, 2006 @ 8:35 am
Great post. Big pr agencies should be very nervous. Customers and influencers want to talk directly with people in a company, hashing out ideas, beliefs, opinions, not “on message” intermediaties. PR people in general need to flip their thinking — it’s no longer about producing the “stuff.”
Comment by Lois Kelly — June 1, 2006 @ 8:35 am
Brian,
I think your observations about the agency model are spot-on. It’s been coming for quite awhile. As far back as 2000, The Council of PR Firms commissioned IMT Strategies to do a report on how the Internet will change the Communications Model. The 800+ page report was terrific, although largely unread by those that needed to read it most…agencies.
As a vendor of technology to PR and marketing professionals within companies and agencies, I see the “rate” of change everyday. It is very slow. Until the client start demanding change from their agencies, the agency will continue to be relevant, if only from a service perspective…
I don’t see much clear leadership coming from the agency at all….more…it comes from the client and the agency executes it. As you say, that ain’t gonna continue at current markups.
The entire “other” post I’d like to see is how IT professionals within companies and agencies have the creative folks by the short hairs. “Oh no…you can’t do that blog thing…it doesn’t fit within our web policy.” IT might be a greater roadblock than anything. The “gatekeeper” mentality is very much alive in this area.
Comment by Dee Rambeau — June 1, 2006 @ 11:41 am
Brian,
I think your observations about the agency model are spot-on. It’s been coming for quite awhile. As far back as 2000, The Council of PR Firms commissioned IMT Strategies to do a report on how the Internet will change the Communications Model. The 800+ page report was terrific, although largely unread by those that needed to read it most…agencies.
As a vendor of technology to PR and marketing professionals within companies and agencies, I see the “rate” of change everyday. It is very slow. Until the client start demanding change from their agencies, the agency will continue to be relevant, if only from a service perspective…
I don’t see much clear leadership coming from the agency at all….more…it comes from the client and the agency executes it. As you say, that ain’t gonna continue at current markups.
The entire “other” post I’d like to see is how IT professionals within companies and agencies have the creative folks by the short hairs. “Oh no…you can’t do that blog thing…it doesn’t fit within our web policy.” IT might be a greater roadblock than anything. The “gatekeeper” mentality is very much alive in this area.
Comment by Dee Rambeau — June 1, 2006 @ 11:41 am
Hi Brian,
Great, thought-provoking post. While you makes some excellent points, I think it is still way to early to count big agencies out.
Most people know I’m more prone to point out dinosaurs than defend the old guard, so this might come as a surprise. But those who ignore their strenght do so at their own peril. Here are a few things large agencies have on their side:
* Contacts: It might be an old-school paper Rolodex, but it is full of contacts and relationships.
* Money: They’ve got the cash to aquire talented individuals … or entire shops. Competition getting a bit too rough? Buy ‘em.
* TV: Social Networks are huge and internet advertising is booming, but TV is still a cash cow, and that’s not going to change for quite some time. You claim that “the market for making elaborate :30 films and holding on to the expensive talent this archaic activity requires must be seeing strains,” but I think Sorrell and co. would disagree. (I have no numbers, btw. Do you?)
* Full service: It isn’t just about the internet. Agencies which cannot deliver (or facilitate the delivery of) comprehensive, measurable, integrated campaigns across multiple platforms might as well hang it up. Big or small: They’re dead.
* Scale: Your blogging business might be great, but I doubt it can handle a company wth hundreds of products in 34 countries and languages. This is why big international agency networks exist.
More here:
http://www.i-boy.com/weblog/2006/06/can-big-agencies-compete.html
Keep hitting the coffee,
~G~
Comment by George Nimeh — June 1, 2006 @ 12:13 pm
Hi Brian,
Great, thought-provoking post. While you makes some excellent points, I think it is still way to early to count big agencies out.
Most people know I’m more prone to point out dinosaurs than defend the old guard, so this might come as a surprise. But those who ignore their strenght do so at their own peril. Here are a few things large agencies have on their side:
* Contacts: It might be an old-school paper Rolodex, but it is full of contacts and relationships.
* Money: They’ve got the cash to aquire talented individuals … or entire shops. Competition getting a bit too rough? Buy ‘em.
* TV: Social Networks are huge and internet advertising is booming, but TV is still a cash cow, and that’s not going to change for quite some time. You claim that “the market for making elaborate :30 films and holding on to the expensive talent this archaic activity requires must be seeing strains,” but I think Sorrell and co. would disagree. (I have no numbers, btw. Do you?)
* Full service: It isn’t just about the internet. Agencies which cannot deliver (or facilitate the delivery of) comprehensive, measurable, integrated campaigns across multiple platforms might as well hang it up. Big or small: They’re dead.
* Scale: Your blogging business might be great, but I doubt it can handle a company wth hundreds of products in 34 countries and languages. This is why big international agency networks exist.
More here:
http://www.i-boy.com/weblog/2006/06/can-big-agencies-compete.html
Keep hitting the coffee,
~G~
Comment by George Nimeh — June 1, 2006 @ 12:13 pm
George: great points. And I’m not counting big companies out. As you say, they have the cash, contacts, etc. to keep going for some time. I’m arguing that there is a fundamental shift that will have to be responded to, including restructuring the ways agencies hire, train & bill, given a lot of factors.
It’s way more than ‘we need a blogging guy.’
Comment by Brian Oberkirch — June 1, 2006 @ 1:41 pm
George: great points. And I’m not counting big companies out. As you say, they have the cash, contacts, etc. to keep going for some time. I’m arguing that there is a fundamental shift that will have to be responded to, including restructuring the ways agencies hire, train & bill, given a lot of factors.
It’s way more than ‘we need a blogging guy.’
Comment by Brian Oberkirch — June 1, 2006 @ 1:41 pm
Brian: Bravo!
Today I presented to 40+ PR people about “PR 2.0″ – and I think I saw heads exploding. Intrigued? – yes, they were. Nervous as all hell about the time and energy it will take to learn about all this “new stuff”? – yes, they were.
Multiply the experience I had today by a factor of 20X for a large agency. Daunting.
As an agency principal myself (“economically rewarding”? when?), I am daunted not only by the amount of time my staff will require to get up to speed but by the amount of time it takes to make/sustain “connectedness” that’s of on-going value. Frankly, it could easily be 3X the workload, but try to convince clients to up their budgets to accommodate this brave new world… ?? Well, that’s another post.
Comment by Todd Defren — June 1, 2006 @ 4:09 pm
Brian: Bravo!
Today I presented to 40+ PR people about “PR 2.0″ – and I think I saw heads exploding. Intrigued? – yes, they were. Nervous as all hell about the time and energy it will take to learn about all this “new stuff”? – yes, they were.
Multiply the experience I had today by a factor of 20X for a large agency. Daunting.
As an agency principal myself (“economically rewarding”? when?), I am daunted not only by the amount of time my staff will require to get up to speed but by the amount of time it takes to make/sustain “connectedness” that’s of on-going value. Frankly, it could easily be 3X the workload, but try to convince clients to up their budgets to accommodate this brave new world… ?? Well, that’s another post.
Comment by Todd Defren — June 1, 2006 @ 4:09 pm
Todd: dead on. That is exactly the new reality we have to start communicating. You are also bearing out my assumption about the inertia that will have to be overcome at bigger shops. As George correctly states above, it’s not like they are hurting for clients, so the incentive might not be there.
Comment by Brian Oberkirch — June 1, 2006 @ 4:13 pm
Todd: dead on. That is exactly the new reality we have to start communicating. You are also bearing out my assumption about the inertia that will have to be overcome at bigger shops. As George correctly states above, it’s not like they are hurting for clients, so the incentive might not be there.
Comment by Brian Oberkirch — June 1, 2006 @ 4:13 pm
I hope I am not being baited into a trap here. I work for what you might consider a big agency – Ogilvy Public Relations Worldwide. I have worked for start-ups and big co.s. You make some valid points but like many generalizations it just isn’t true of everyone. We have been evangelizing the changes in digital influence within the company and within our clients. We have a pretty sophisticated view about how we can engage in these conversations (vs. foisting more messages over the transom). I believe our approach and pov is more sophisticated than most boutiques or freelance consultants. I have been exploring the changes within Ogilvy PR, Ogilvy One, and Ogilvy. That means a lot of smart people figuring out how to engage in the new new media.
Sure, we have a core team. But that’s true of any initiative within a large company. It’ s this breeding ground for entrenepeurial pursuit that makes Ogilvy a great company and a great brand. We go well beyond shoehorning old PR into new tech buckets. I agree that these changes may transform PR and marketing in radical ways. and not everyone in my company agrees with me. On the other hand we are well beyond doing “Blogging 101″ presos within the company to get staff up to speed.
Big vs. small? That’s an irrelevant argument in my book. Who gets it? Who is actually doing something in this space and producing client value? That matters more.
Comment by John Bell — June 1, 2006 @ 6:38 pm
I hope I am not being baited into a trap here. I work for what you might consider a big agency – Ogilvy Public Relations Worldwide. I have worked for start-ups and big co.s. You make some valid points but like many generalizations it just isn’t true of everyone. We have been evangelizing the changes in digital influence within the company and within our clients. We have a pretty sophisticated view about how we can engage in these conversations (vs. foisting more messages over the transom). I believe our approach and pov is more sophisticated than most boutiques or freelance consultants. I have been exploring the changes within Ogilvy PR, Ogilvy One, and Ogilvy. That means a lot of smart people figuring out how to engage in the new new media.
Sure, we have a core team. But that’s true of any initiative within a large company. It’ s this breeding ground for entrenepeurial pursuit that makes Ogilvy a great company and a great brand. We go well beyond shoehorning old PR into new tech buckets. I agree that these changes may transform PR and marketing in radical ways. and not everyone in my company agrees with me. On the other hand we are well beyond doing “Blogging 101″ presos within the company to get staff up to speed.
Big vs. small? That’s an irrelevant argument in my book. Who gets it? Who is actually doing something in this space and producing client value? That matters more.
Comment by John Bell — June 1, 2006 @ 6:38 pm
John: thanks for your input. I’ll look into some of the things Ogilvy is doing. Or, feel free to highlight some links you’d like us to look at. No baiting, just a freewheeling conversation. Thanks.
Comment by Brian Oberkirch — June 1, 2006 @ 7:53 pm
John: thanks for your input. I’ll look into some of the things Ogilvy is doing. Or, feel free to highlight some links you’d like us to look at. No baiting, just a freewheeling conversation. Thanks.
Comment by Brian Oberkirch — June 1, 2006 @ 7:53 pm
Brian – you raise some good points that are worthy of more detailed discussion, but if it’s “your ten against my ten” what exactly is the difference – the business models? Most probably, but I’m not sure that has much to do with who gets it and who doesn’t.
I agree that most traditionally-trained PR people don’t get it (and I include ourselves in that), which is why agencies need people like you and me who concentrate on how to use technology to communicate.
Comment by Niall Cook — June 1, 2006 @ 10:44 pm
Brian – you raise some good points that are worthy of more detailed discussion, but if it’s “your ten against my ten” what exactly is the difference – the business models? Most probably, but I’m not sure that has much to do with who gets it and who doesn’t.
I agree that most traditionally-trained PR people don’t get it (and I include ourselves in that), which is why agencies need people like you and me who concentrate on how to use technology to communicate.
Comment by Niall Cook — June 1, 2006 @ 10:44 pm
Niall: so, more accurately, the points I raise have less to do with getting it than with doing something about it. That is, agency structure will have to realign to meet new market conditions. Social media are the visible tip of that iceberg.
Comment by Brian Oberkirch — June 2, 2006 @ 3:04 am
Niall: so, more accurately, the points I raise have less to do with getting it than with doing something about it. That is, agency structure will have to realign to meet new market conditions. Social media are the visible tip of that iceberg.
Comment by Brian Oberkirch — June 2, 2006 @ 3:04 am
I wouldn’t go writing-off content just yet. Connection and conversation are all very well – but once we are all connected we have got to have something to converse about (unless we are all PR bloggers in which case we can witter on about very little for a long time!). Brands and their agencies have just got to crack what type of content people are going to want or accept from them.
Comment by Blue Sky — June 2, 2006 @ 3:47 am
I wouldn’t go writing-off content just yet. Connection and conversation are all very well – but once we are all connected we have got to have something to converse about (unless we are all PR bloggers in which case we can witter on about very little for a long time!). Brands and their agencies have just got to crack what type of content people are going to want or accept from them.
Comment by Blue Sky — June 2, 2006 @ 3:47 am
Brian: I was inspired by this conversation and posted this morning. Hope you have a chance to check it out.
http://pr-squared.blogspot.com/2006/06/pr-20-learning-curves.html
Comment by Todd Defren — June 2, 2006 @ 7:57 am
Brian: I was inspired by this conversation and posted this morning. Hope you have a chance to check it out.
http://pr-squared.blogspot.com/2006/06/pr-20-learning-curves.html
Comment by Todd Defren — June 2, 2006 @ 7:57 am