We all recognize that the advertising business is all about the big idea. The big idea that breaks through the clutter and creates momentum for a brand -- that idea is what makes or breaks an agency. You could argue for ROI, strategy, and even scale is emerging as a key differentiator.   But the reality is regardless of what clients may admit – they want the magic sauce too. I often say “the prettiest girl in school does not exactly go for the most dependable guy” – the same thinking applies when clients pick agencies.

So if you work in or with a shop that is perceived as highly creative, you are probably nodding your head.  But don’t get too comfortable. You may be in trouble.

Here is the trick. The medium is changing fast and what may appear similar to the uninformed simply is not. For example, writing for TV is actually quite different than writing for film. Selling in a new tagline is not the same as selling in a new business model.  And, lastly, designing a multichannel, interactive brand experience that is driven by a complex technology back-end is simply outside the scope of what an art director/copywriter team can concept over a few lattes.

Conceptual ideas are cheap and meaningless unless realized. How many times have you walked down the street and caught a new product or new business or a new campaign and said to yourself I came up with that years ago?  Don’t be mistaken; we do not get credit for what we doodled in our sketchbooks, or concepts on the whiteboard. Clients only give us credit for what we have done. The big idea is “real”.

The downturn of many “once great” companies can be attributed to simple ignorance. This particular form of ignorance is a product of arrogance, the arrogance to think, “we make products or services that people want” when they never bothered to ask their customers if in fact the still wanted them.

Consider how the mighty have fallen. Not too long ago every corner Mom & Pop video rental shop was put out of business and replaced by a blue and yellow phenomenon called Blockbuster, there was one of these bad boys in every corner. Again not to long ago we can still picture these guys in their boardroom boasting about how they ruled the world. Then this little thing called NetFlix happened. They obviously did not see it coming, at least not until it was perhaps too late.

The point I want to make is that they should have. There is really no excuse. You don’t need a crystal ball for this, all you need to do is pay attention. Shifts in consumer behaviors don’t happen overnight, but you can always count on the fact people change.

Companies spend an ungodly amount of time and effort keeping tabs on what their competitors are up to. It’s amazing to me how little effort they actually spend understanding their customers.

This week was “bring you Son or Daughter to work” week. It occurred to me companies should institute a new holiday – and it should be scheduled everyday.

If I have not made my point here are a few more clues – The newspaper industry, the music industry, the airline industry, and buggy whips!

No more surprises  - declare today – “Take your customer to work day”

How many times in the past week have you heard the term “Mobile Media”, or “Mobile Advertising”? I have clients, analyst, and reporters ask me constantly. “Who’s your mobile media expert?”, “What percentage of my budget should go to mobile media?” – Silliness in my opinion.

Most marketers associate the term media with a medium to deliver or PUSH your advertising.  Basically if you see mobile as just another place for your ads, if you intend to include another line item in your media plan that says “mobile” – you have it all wrong.

Mobile is not media it is a point of interaction between a brand and a consumer. You may say well so is a TV spot, and that is media right? Not necessarily the key word here is interaction, and I mean the two-way kind.

Mobile, email, and even the good old telephone are amazing little tools to continue a conversation they should not be used as a medium to solicit one – that is called SPAM.

I can’t count how many times we are asked to “support our offline campaign online” – I get this, but my view (and maybe it is just semantics) it’s about driving an integrated brand experience. This week in a study conducted by Group M a subsidiary of WPP said online ad spending will surpass TV spend in the UK by next year. The forecast calls for UK Internet advertising revenues to hit £3.4bn this year. TV advertising, on the other hand, is expected to grow by less than 1 per cent to £3.56bn in 2008. And by 2009 the UK will see digital as the dominant channel.

Wait so does that mean finally the above the line agency will get that all to familiar call. “Guys we need you to come up with some of that TV and radio stuff to support our campaign” – never-say-never

I had my first ever glass of Johnny Walker Blue Scotch not long ago. Scotch is my drink of choice and I was excited at the prospect of trying what many have told me was going to be the best scotch I have ever had. And sure enough it was. The whole experience, from the feel of the weight of the glass in my hand to the warm flow of the scotch down my throat to the satisfying burn I felt as it passed into my system were all exactly what I had imagined. It was a great experience. And, it got me thinking. Mind you I only had one so it was definitely not alcohol induced thinking. I wondered whether it actually tasted that good because in fact it is that good or because I expected, and in fact my mind believed it was going to be that good. Of course, the answer is both. I was pre-conditioned toward a positive experience and the product delivered. So yes, the distillers, the packagers, and the distributors all did their job to create a positive experience for me. But of course so did the advertiser who pre-conditioned me for the experience. Advertising heightened my expectations and the product delivered. Exactly as it should be.

Of course this mental rambling got me thinking about brands in general. I thought about chocolate and then instantly of Hershey, I thought about high performance cars and then of BMW. Of family entertainment and then Disney. Of soft drink and then Coke. You get my drift. Think of the power of this. In the famous book “Positioning The Battle for the Mind of the Consumer” Al Reis and Jack Trout talked about the power of occupying space in the consumers mind. Owning a word, a concept, basically a brand. And as my stream of consciousness reminded me, once that brand sits in that space in ones mind it is very difficult to replace. Clearly a combination of factors contribute to my positive association with the brands I mention above, but advertising has to be top of the list. Multiple impressions served over a long period of time with great impact and I was hooked. In fact, I started thinking, all driven by that glass of scotch, that this was exactly why I got into advertising in the first place. To build brands and help clients own the hearts and minds of their consumers.

But then I was struck by the sobering thought (to carry the drinking analogy further) that at present I was not really in the advertising business. I am in the interactive advertising business and today there is a clear difference. Interactive agencies don’t own the brands, or more specifically are not chiefly tasked by brand managers to be the primary voice of the brand in the marketplace. Sure we get to express the brand in a given channel. But its kind of like the difference between leasing and buying. Traditional agencies own the car outright, it sits in the driveway fully paid for. Interactive shops may get to play with the car ,but it’s a short term lease and eventually you need to give it back. Interactive shops are experts. Need a web site built you go to an interactive shop. A banner campaign, we’re your guys. Need analytics work to better understand consumer behavior and our phones ring. Don’t get me wrong it’s great. As technology has advanced our industry has quite literally boomed. The things you can do now to target and then acquire and retain customers is absolutely staggering. In fact our industry is booming for good reason, our brand of advertising is highly effective and highly measureable. We can clearly tell clients that for every dollar paid this is what was returned. It is very satisfying, and I am proud of the work we do. But is it memorable? 

Ok so WPP did not say that, but rather their actions proved it. WPP had a great week by winning a $4.5 billion dollar deal with Dell. A deal of that magnitude is not easy to come by, and certainly not easy to win so I want to congratulate them.

One would assume that the very best minds and top talent at WPP spent countless hours in a conference room somewhere lined with whiteboards, Starbucks paraphernalia, pizza boxes, etc. working their asses off to win this. The product of which was a plan for how to best service the Dell account. No doubt the answer is to put together a multidisciplinary team made up of creative (both traditional and digital), media experts, strategist, analyst. Planners, industry experts, and this is only a partial list – effectively a new agency.

This “think tank” and the horsepower and tools to make their ideas and plans a reality for the Dell client would have to share focus, incentives, and account responsibilities. This makes all kinds of sense to me, and obviously so did Dell.

Why create a “new agency”? The irony here (if you have not picked up on it yet), is that this whole thing flies in the face of the promise of what the holding company model was supposed to deliver. These guys have been pushing the “benefits of the network”  - how many times did they tell a client the tale that their collection of agencies would work together in concert to support your brand, yet all they got was bickering about who got the revenue, the credit, or the earn out. Funny that now after the dust has settled, and all the double dipping has been exposed the client’s have learned their lesson. The smart winner in all of this was Michael Dell.

From a trends perspective I see the continual embracement of better design experiences. In the early 2000s we were seeing technology trump design. Brands were happy enough with giving customers functionality and customers were happy enough to stay loyal to the brands that gave it to them. Consumers don’t choose a bank because it has online banking anymore. They choose a bank that can do online banking better. Look around at all the lack luster sites out there maintained by big brands. There is a global effort going on to clean up these sites. As designers we were hearing a lot of people say “good enough”. Not anymore. Now technology is the price of entry, and the experiences are driving the functionality rather than the other way around. It was like we were building epic movies with state of the art special effects. They were cool, but the plots were lost. Brands are now looking to build better sites that listen to their customers, deliver on their expectations and give them what they are looking for more intuitively. Brands are attempting to know what their customers want before they themselves know what they want. The evolution has mashed technological enablement with creative design experiences built on a foundation of customer insight and brand.

Many marketers who were early adopters of online advertising had become accustomed to being the heroes of their respective organizations for consistently wining the battle with that elusive monster called ROI. You brought home 5,000 new customers in one month for less than anyone else on your team and you were a “genius” , your boss was very impressed and consequently handed you a few more bucks and said “can you do 10,000” – you did it without breaking a sweat. You can guess what came next, a new goal 20,000. This time it was different, the most you were able to do no matter what was 12,000 – what happened? You did everything right, you applied everything you had learned; rigorous testing, constant optimization, and your go-to media placements and keywords were all covered.

Well there is a HUGE difference between demand generation and demand harvesting. Harvesting existing demand for your products or services is a hell of a lot easier than creating demand for them. That said I’ve learned that the magic sauce for scaling your business is doing both well and in concert with each other.

Very few marketers do this, in fact there seems to be some silly unwritten law in the marketing world that states you should choose a side - you are either a brand marketer or a direct marketer and these are mutually exclusive. Like being a Republican or Democrat, a sailor or a power boater. Even marketing organizations and agencies seem to come in two flavors. I say this is ridiculous. Why would you create demand for your product and not do a good job of capturing it, or conversely why would you expect to harvest more business than your brand commands.

I would attribute most early success in the online space to the inherent transparency and efficiency of the channel for harvesting demand. It suddenly became easier than ever to be a great direct marketer. You now had all the data and tools to be at the right place at the right time to capture demand. What could be more elegant than buying the keyword “purple couch” when you have a line of purple couches for sale this season? The beauty of the web is you now had the ability to reach “everyone” who had that want or need.

I’ll continue with the silly couch example. Sure before you started marketing online you typically sold 10-12 purple couches every month, and now you sell 100  - that’s real growth right? Yes, but you cant mistake that for creating demand. There were always 100 people out there (with very bad taste I may add) who wanted a purple couch; you just were simply not reaching them. Reality check - If you want to sell 100,000 of those purple suckers you’re going to need to get Opra or Martha to tell the world they have to have one before the holidays…that my friends is demand generation.

All right let’s start with the obvious, if I worked at a different agency I would get fired for even talking about this subject. Performance based comp has become a huge topic of debate in the industry. Let me quickly end that debate… it makes a hell of a lot of sense for both sides period. In my opinion it protects clients from hiring stupid or complacent agencies, and protects agencies from wasting their time with stupid clients. Let me try to give you some examples of what I mean. At Sapient we are simply manic about “client success” it’s in our language, we measure the hell out of it, it’s even tied to our bonuses. Why not get paid for it?

Here is some food for thought. Two years ago we managed to hit our client’s yearly customer acquisitions goals in just two and a half months. Literally by early March we were done for the year. I would attribute that success mostly to the agency’s ideas. A performance clause would have been nice.

 This year again we helped raise over $14 Billion dollars in deposits for a leading financial services firm in less than six months. This one I would attribute partly to the offer, partly to a very media savvy client who was not afraid to take a chance, and lastly to our team who cranked out an unbelievable amount of work is such a short period of time. Clearly it would have been nice to partake in some of that bounty too.

In both of these cases we were on the phone with the client almost everyday (on big media days almost every hour) and the first words spoken on every call were “how are we doing?” “What are the results” – that’s a hell of a better lens to be aligned with than “I hope they like this creative as much as we do?” In these scenarios the client would be happy that the agency got a few extra bucks regardless of where the biggest contribution came from.

It’s a very different situation when things aren’t going so well, and here is where I hope to make my point that performance based compensation schemes drive all the right behaviors on both sided, and actually grease the wheels for client success.

A performance deal actually empowers the agency to be a true partner. It facilitates tough conversations that have to happen to change the course of the campaign. I now know better, but I can recall when in a previous life we would just  throw our hands in the air and say “well if that’s what they want” when we knew it was not what they needed. It gives the agency a voice at the table, which is sorely needed. “your pricing is wrong” “the call center process is broken” etc. there are many factors outside of creative and media that can effect success.

One major pitfall that is avoided though performance compensation is Agency complacency, meaning that after banging their heads against the political walls on the client side, the agency just stops thinking and does exactly what they are told. This creates little value for the client and completely squashes any appetite to innovate at the agency.

I also protect good agencies from bad clients, and bad clients from themselves.

 Not to long ago we were running a campaign (again an FS client) where they offered a competitive rate. The campaign was doing very well and then “the powers that be” decided to change the rate significantly for the worse. You can imagine what happened to the results, but the client insisted we come up with more compelling creative to get the numbers back up.  The right thing to do would be to kill the campaign altogether and focus on other initiatives. Imagine if you had a gas station as a client who decided they would sell their fuel for $1.00 per gallon more than the station across the street. Not too bright right? Well when they realize no one is buying fuel from them anymore – they decide to spring for a bigger sign in hopes of better results. Imagine this scenario when you are being paid on performance. Many agencies say this is why performance comp cant work, I say nonsense it would drive the right behaviors. In this situation the agency would fell more compelled (and financially motivated) to help the client change tactics, if that failed they get the hell out of that account. Both- better outcomes.