Advertising Agencies Must Re-Focus on Strategy
by Chad Rueffert

“Traditional marketing is not dying – it’s dead.”  That’s what world renowned marketer and former Chief Marketing Officer for the Coca-Cola Company Sergio Zyman concludes in his book, “The End of Marketing as We Know It.”

He goes on to say, “Old style marketing is dead.  It is as dead as Elvis.  Perhaps its handlers have propped it up in a chair.  Maybe those who depend on old-style marketing the most – the big advertising agencies and the major television networks – have wired up the cadaver to massive marketing budgets, so they get a flinch or kick out of it every once in a while.  But there is no more singing and dancing.  The music has died.  Marketing as we have known it is over.”

If traditional marketing is dead, then what killed it and what took its place?  In one word:  Strategy.  In the past decades, most marketing was centered around media.  Marketing oriented companies were asking their advertising agencies questions like:  “Should we buy radio or television?  How many gross rating points will we get with that schedule?  If we buy a million dollars in media will you discount your commissions?”  The primary role of agencies was to manage media budgets, maximize reach and frequency, and push for larger expenditures in order to increase commissions. 

The role of advertising agencies has to change in order for them to continue to prosper.  And it is changing.  A new breed of agency is springing up around the world with a focus that has changed from media to strategy.  Craig Cheyne, CEO of Decker, Glastonbury, Conn has termed them “Microagencies.”

Cheyne says, “While many in the business say traditional agencies have lost their strategic role, microagencies lead with that discipline…Microagencies, unlike traditional agencies hooked on media commissions and 30-second TV spots, use consumer insights to develop full and integrated strategic marketing communications programs.  And microagencies, unlike marketing consultants that leave their clients wondering what to do with all of that strategic thinking, actually make things that move consumers to act.  And unlike those creative boutiques, microagencies are as devoted to nailing a compelling brand strategy as they are to doing creative with true stopping power.”

Cheyne has identified the new role agencies need to be playing in one phrase:  integrated strategic marketing communications programs.  An integrated marketing communications program differs from traditional advertising in several ways.  First, it leads with strategy.  No creative work, no media buying and no marketing tactics are implemented until the agency has sat down with the clients for many hours, completed all the necessary research, and identified the appropriate marketing strategies for achieving the company’s goals within their budget. 

Once that strategy is set, the process of determining a market position and identifying a brand identity can begin.  Still, no graphic design or copy writing has been done and no media has been purchased.  Only after the marketing strategies have been set, and the positioning and branding strategies have been approved, does the traditional role of agencies begin and advertising tactics are implemented.  Even then, every tactic should be measured against the approved strategies and must further the positioning and brand image in order to leave the concept stage and reach the buying audience.

Madison Avenue advertising agencies have accepted the need for this change as well.  They’ve begun creating smaller, strategy oriented teams to complement their massive media and creative departments in order to compete with the up-and-coming microagencies.  This change is a necessity in order to help clients remain competitive in today’s marketplace.  Marketing must change because the business world has changed.  Every company now has the threat of global competitors because of the advances in Internet technology and the availability of world-wide overnight shipping and delivery.  Competition has increased in almost every area of commerce.  And marketing vehicles have changed as well.  In the not so distant past, your choices were limited to television, radio, newspapers, magazines and billboards.   Today’s integrated marketing communications plan will probably include strategies and tactics for those traditional media plus e-commerce solutions, Internet and email marketing, direct mail marketing, public relations, tradeshow marketing, guerilla marketing tactics, product packaging, strategic partnering, franchising or licensing, cooperative marketing programs, investor relations, governmental relations, and a variety of other non-traditional approaches that fall within your overall strategies. 

Marketing has become the most important part of the business plan in today’s world.  Because there is little differentiation between competitor’s products in the areas of price and quality, marketing is the only thing that can influence the opinions of the target market and create a reason to buy.  This is the reason the marketing umbrella has expanded to include nearly every aspect of the company.  Businesses are selling their brand and positioning even more than they are selling their product features and benefits.  Therefore, it is essential that all of your marketing communications be consistent with each other and further the strategies that were put in place to accomplish your goals.

Because strategic consistency is so necessary, the advertising industry will be  forced to take what used to be separate disciplines of marketing consultants, creative boutiques, media placement and public relations and combine them into integrated marketing communications agencies. 

Marketing as we knew it may be dead, but what has grown up in its place is a new approach to business that is more customer focused, and will produce more results for a smaller investment.  The agencies and clients who recognize this shift first will retain a competitive advantage for years to come.