It Sounds sooooo good - They'll do the work...and even better than you could because that's their expertise. But does it work?
Introduction to SignalsFromTheOP
Guide to episode
- Agencies are in trouble and consultancies are surging.
- This is true at the enterprise, middle market and SMB levels.
- Anyone can complete a list of activities. Talented creatives can complete them with more aesthetic flair. But engineers and industrial buyers have different criteria.
- Marketing activities which aren't built on solid strategy are ineffective.
- Driving results takes different skills than in the early days of content marketing.
Transcript follows
Hi, I'm Ed Marsh. Welcome to this episode of Signals from the OP. On Signals, I talk about issues related to revenue, growth, and strategy that are going to impact industrial manufacturers more and more in the coming years. Today, I'm going to veer off the rails. Having just said industrial manufacturing, now, I'm going to talk Madison Avenue. It may not have appeared on radar of many folks watching this, but yesterday Ad Age released their 2018 state of the agency report. There are some interesting points in there that I think pertain. First, one of the main things I noted is that the majority of marketing and advertising work that is done now is digital. That's not a big surprise. We've talked about these kinds of issues on these videos before, I write about, and many of the industrial manufacturing companies I speak to are well aware of it. They're shifting, they're reprioritizing budget, but it's an important validation of these trends everybody is seeing.
Secondly, agency revenue has stagnated. But in contrast to that, consultancy revenue has, what Ad Age calls, rocketed. These are companies that are actually coming in and advise on digital marketing, and sales, and revenue growth strategies. The trials and tribulations of agencies on Madison Ave may not be important to the folks in the industrial manufacturing world, but here's a couple of ways that I think it does directly pertain. I hear many of the same kinds of conversations happening with the middle marketing industrial manufacturers and S&Ps that I talk to. Now, these companies may not be talking about slashing billions of dollars from their marketing budgets like P&Gs, CMO that just got disgusted with wasting billions, literally billions of dollars on crap. But, they're asking, can we do it more economically in-house? What happens if we get rid of this agency? What happens if we realign the agencies that we're working with? Maybe if we build it in-house, do we hire a consultant to come in and advise and coach on how to do it for optimized results?
You see, when digital marketing was new, say, five years ago, you could follow a very formulaic approach. Three mediocre blog posts a week written around important key tunes in your industry might have actually rocketed you to the top of the results. You could hire an agency to get that done for you, and that would save you having to bring in the social media, and the web programming, and the video, and other kinds of talent in-house that you might need. That's changed.
First of all, that kind of talent is far more accessible. But secondly, today, you need a really authoritative voice of your content. You have to have deep expertise, and a lot of rigor in understanding the buyers, and their challenges, and the outcomes that they're looking for, and how you help achieve them, not just talking about the features and benefits of your product. Of course, a few agencies have morals where they find, they source some freelance editorial contributors to industry trade journals that are conversant in the language, can speak the industry lingo, but that doesn't solve for all the rest of what needs to happen besides content.
Also, the agency staffing, a profit model, really it is contradictory to, in many cases, achieving best results for clients. Their model is really built on bringing in inexpensive, energetic, inexperienced talent, throwing them at budgets that earn the high retainers, trying to wring out as much inefficiency, which there's a ton of it, trying to wring as much of the inefficiency as possible, and pocket the difference as profits. It's not a model that's really conducive for manufacturers that like to build stuff themselves, and figure out continuously how to make the process more efficient.
But the biggest commonality, why does Ad Age report, I think it's important to industrial manufacturers, is this fundamental reality that marketing and sales fail without solid strategy. That's just the reality. Agencies don't have business and strategy chops. In fact, many agencies, unfortunately, don't have sales and marketing strategy chops. They're very tactical, and in some cases, efficient and knowledgeable about tactics, but it doesn't work in the absence of and in the context and framework of an important strategy.
So, that's why the five big consultancies are running enterprise business away from Madison Avenue agencies. It's the same reason why S&Ps and the manufacturing and industrial space find themselves increasingly having this discussion, do we in-source or do we outsource to an agency? If we do in-source, and we want to in-source, then what kind of a resource can we find as a consultant, or advisor, or a coach to help us make sure we're doing it well?
You may be having the same kind of a conversation yourself internally or debating how you might proceed in the future. I'd be happy to have a conversation with you about my experience of what I've seen works and doesn't work for industrial manufacturers. If you like this kind of unorthodox look at key issues facing industrial manufacturing firms, then I'd welcome you to subscribe to these period video blog posts. You can do that at signalsfromtheop.com. I'm Ed Marsh. Thanks very much for joining.
