Lets start by killing the word user. User is a term IT guys have chosen it’s perfectly impersonal just like IT likes it. A “user” is actually a real person, they have souls, they have feelings, they have hopes and dreams and yes they have needs. A marketer would never refer to a customer or a prospect as a “user”.

File this under “I couldn’t make it up if I tried.”

I sat in on a panel today with so called top marketers in the financial services space who kept referring to banner ads, search etc. as “new media.”

I guess they didn’t get the memo in 1999.

All three CMOs acknowledged they clearly understand how their customers consume media today. They even rattled off all the relevant stats to the crowd. Then someone asked if they had actually changed their marketing spend to match media consumption.

The answer: no. They admitted that they still feel a bit more comfortable with media like TV since it’s still hard to prove out the ROI on “New Media.” Wish I had asked them to explain exactly how they know old media works.

The talk of new media is a tell tale sign someone has no clue about the world we live in and market to. Media is media. It evolves as consumer behavior and media consumption evolve. There has been neither an official date set nor official line drawn that denotes new vs. old. In fact TV, radio, print, search, online ads, and even out of home media have changed and will continue to evolve.

Based on this panel experience I predict a couple of new CMO gigs will soon be open at some major US banks.

I’m a big fan of using personas to influence experience design – to a point.

Personas have become a religion for some folks, the most dominant and often the singular driver for making design choices.

My rub is not with personas themselves, my rub is with people that use personas as the only influence to drive their designs. Information architects and UE designers have become experts at deciding what content should get what share of voice based on who MAY be coming to your web site..

The fact is that technology has evolved quite a bit since the persona driven design methodologies were first introduced. Which means information architects don’t need to guess who is on your site. They know who is coming. Which changes the persona game.

To ignore the real customer needs in favor of their made up persona is silliness. It’s like ignoring what the GPS tells you because you paid so much for that compass.

Did I say silliness?

It’s getting rough out there for clients looking for interactive agencies. No one is talking about it but size is starting to matter a lot in agency decisions. Within 18 months I predict the holding companies will begin consolidating their small shops to at least to create the illusion of scale.

Why?

-- Clients want big; they don’t want to manage multiple interactive shops on top of already managing traditional advertising agencies, PR firms and specialty players.

-- The war for interactive talent is fierce. Smaller shops don't have the right "farm system" to train young talent or the management infrastructure, methodologies, and systems to drive quality delivery. Great creatives want to work in firms where they can do just that – and not have to wear multiple hats.

-- Smaller shops can’t handle the volumes. A few years ago we stumbled into an account that required hundreds of rich media assets per week just to "feed the media" - about two to three billion impressions per month. The company, Citi, had used many of the "major" shops, but none of them could keep up with sheer volume of work without making stupid mistakes.

As more money continues to shift from the analog to digital there are more and more massive accounts popping up with no real large interactive agency players to handle them.
Consider the drop-off in head count from the top three -- AvenueA/Razorfish, Sapient, Digitas, each with a few thousand folks – to the next tier where interactive agencies have a few hundred people. More than half of the top 100 interactive agencies have less than 100 people on staff.

So while creativity and insights are still high on client's criteria, size is starting to matter more than ever.

BTW Citi is still a great client.

In a recent interview with a potential Creative Director in Miami, the guy made a statement that at first took me by surprise and still has me thinking. He said that “personalization was counterproductive to building a brand”, he claimed “how could you possibly build a consistent brand experience if it changes for everyone”. My instinct was to disagree, but frankly I could not muster a flawless rebuttal. I’m very interested to hear what you (the reader) have to say. Go ahead don’t be scared post something! After a couple of days, the Monday morning quarterback in me came up with a response. Actually an example of where personalization has supported and driven a brand. We did some work for Celebrity Cruises the premium brand in the Royal Caribbean family. The brand promise revolved around “being treated famously”. We leveraged technology to deliver an unparalleled level of personalization into the online experience. The idea was to mimic the kind of personal attention you would receive onboard. The results were impressive we not only dramatically increased revenue, when we surveyed their customers they were impressed with their entire experience. I would argue that builds their brand.

I was recently invited to participate in an all day brainstorming session. The objective was to work through ideas on how a prominent travel brand could leverage “personalization” to create a great customer experience that would also drive their key business objectives.

I was very exited to be part of this team for the day, especially given the talent in the room. To kick of the day one of the groups prepared a 30 slide best practices deck. The idea was to refresh the group on who is effectively using personalization and who is not, as well as the pitfalls. Has your Tivo ever turned on you? Long story short we never made it past the second slide. That infamous second slide naively tried to offer a simple definition for the term Personalization, and distinction from it’s cousin segmentation. We debated the nuances between segmentation, personalization, and even customization for over five hours. I felt compelled to share my definition, even though I truly believe it doesn’t matter what you call it just as long as you deliver the goods.

Segmentation: This is the term most commonly used by traditional direct marketers to describe how they break down customers into logical groups or “segments” they aim to target. The level of sophistication used to determine the make up of these groups varies greatly. You can work with a simple segment like “past customer” or end up with hundreds of cluster codes and attributes “young Midwest family with kids that has shown interest in the past 30 days and has a value score of X and above” To drive content on you site based on simple segments like “young family with kids” is still considered segmentation driven experience. Think of looking at history to drive content.

We are in the middle of a frenzy created simply by a few dollars shifting from traditional media to interactive. We are seeing acquisitions with silly valuations, talent wars, agency consolidations and more importantly agency transformations galore among the service companies, media outlets, and technology vendors that stand to gain from this shift. You all have heard reports of agencies refusing to participate in RFPs or even turning down real work because they don’t have the folks to staff the projects.

I predict an unexpected tsunami of work is on the way which the Interactive industry and infrastructure will not be prepared o handle.

Consider this, over the past three years a popular retailer that I’m close to (but wont divulge) who’s annual media budget has hovered around $200MM dollars had shifted from 2% to 4.5% to interactive. For him “this digital thing“ has come of age, and today he and his team are debating whether it should represent 11-13% of their total spend as they do their planning for 2008.

For those of you doing the math that means one marketers contribution to the digital pot has a bit more than doubled in the past three years. At their conservative estimate they will more than double that in 2008 alone. In this marketers’ mind it’s not such a big deal “so I’m shifting 5% of my budget to something that’s proven now”. To the marketer its’ only 5 points, to the interactive industry it’s 100 points which is BIG.

This bodes well for all of us in the industry right? My thinking is when the tidal wave hits two things can happen you may drown, or float and rise with the tide. Are you ready?

Excerpt form (Part 1) I predict an unexpected tsunami of work is on the way which the Interactive industry and infrastructure will not be prepared to handle.

I believe almost every agency today, which is fully committed to or just starting to dabble in digital media is struggling with delivering mistake free work on time with any consistency. I can’t tell you how many complaints I hear from clients about their respective agencies on this subject. One example of a woman who recently said to me about a small shop she was working with in Boston. “We loved those guys, they were very creative but they kept screwing things up and could not get the work out of the door”

Whoever can figure out how to scale efficiently, but still continue to evolve and improve the level of creativity and technical skills that the client is demanding will be in a great position to take market share from others. The traditional creative agency playing interactive, or the “creative only” digital shops will be the least likely to succeed in this scenario. To be successful agencies not only will have to fair well in the talent wars, they will have to perfect and automate the operational aspects of online marketing. This means they will need technology skills, delivery process expertise, and global distributed delivery capabilities and experience that they simply don’t have. In an earlier post “Can Interactive Agencies Scale?” I explored this subject in more detail, and one of the conclusions was that whether they could or not clients are demanding it.

The moment of truth is coming for many agencies, and it starts the second the client asks:

1. “Those are very creative ideas, but could you show me what you have actually produced?”
2. “Did you do that yourself?”
3. “How long did it take, and how much did it cost”
4. “Have you handled 20 or more of those projects per month for any one client, and can I talk to them to see if they are happy with your agency?”

I guess the point I’m trying to make is that at some point the bullshit runs out, and you need to show your client that you know how to do the work. Ideas are cheap, realizing those ideas is where the real magic happens.

Let's examine focus group research, this so called qualitative research tool places paid constituents in a laboratory setting and asks/observes their attitude towards a product, service, concept, advertisement, idea, or packaging. It's meant to replicate what these so called consumers would do in a natural habitat as opposed to the lab rats that they are. More often than not, people will just try not to sound stupid, string together a few coherent sentences, collect their check and be on their way.

Most importantly --- what people say they'll do and what they actually do are very often two completely different things. Offline marketers have to rely on "asking vs. observing," online marketers have the opportunity to observe more often than asking. For Interactive Marketers, observing what people do on the web in their natural habitat with firms such as comScore, provides more meaningful insights, rather then observing through one-way glass.

It’s official; the old agency formula of the genius and his thousand helpers does not work. Today’s advertising strategies, and brand experiences are infinitely more complex and therefore need to be informed and influenced from many dimensions. This requires a hell of a team, a “think tank” who can create, execute and evolve the big idea every time. No one dimension; creative, planning, media, research, analytics, or technology can be ignored.

Tales of “we are doing it anyways cause the hot shot says so” are for the most part distant memories. It does not matter if you work in traditional above the line, direct, interactive, or even PR. We are all now required to justify the business impact of our craft.

I was trying to think of who was still out there playing the role of the iconic creative leader and very few names come to mind. I can remember a time not to long ago when I could name the key creative person at every major shop. What happened? The heroes today are teams, not individuals. Sure today there are a few very visible charismatic agency leads like Bob Greenberg at RGA. I don’t know him, but I would venture he does not touch the actual work.

One exception that does come to mind is Alex Bogusky at CPB. He definitely is the creative nucleus at Crispin. (I’m actually a fan since he’s another Miami boy) That said can his model be scalable or even sustainable. Luckily for them Alex is a young guy and still seems to love what he does. You do wonder what would happen to that agency if he decided to hang it up? Would it fall apart? Would it not miss a beat?

As a creative, I’ve been responsible for some great ideas, and definitely some bad ones. What I can attest to is that the best work I have ever been involved with was enlightened by the collective genius of my team. My bet is on the team.

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.

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.

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.

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”.