A Core Research Competence Must Ground Leadership

At a Loss: Agencies Must Improve the Strategic Direction They Offer -- or More Clients Will Walk

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Since the mid-1980s, the advertising business has gone to a model that removes from account service the necessity to think strategically. Instead this is now outsourced to a newly defined role: strategic planning. The result: Account service is relegated to the position of account project manager. Don't tell account service this -- they will balk at this concept every time.
Core Research Competence
Illustration: Noah Woods
But they can't run from the truth. Having worked with more than 450 agencies around the globe, that's the model I have witnessed in almost all cases.

Advertisers have seen the same thing. According to agency-search consultancy Bedford Group, one of the top reasons that clients terminate agency relationships is the lack of strategy and creative linkage.

Louws Management recently commissioned a study to understand both the advertiser and agency sides of this issue. More than 700 people responded, representing two-thirds of the top 50 advertising agencies, as well as numerous Fortune 500 companies, such as Burger King, Cingular, Schwab and Disney -- with nearly 85% identifying themselves as senior management and half of those as executive management.

'A lost art'
The results support the decline in agencies' leadership role in marketing and advertising strategy: Nearly 42% strongly agree or agree that "strategic thinking is a lost art," yet 89% strongly agree or agree that their agency provides "proactive strategic brand and marketing leadership."

This is not to say there is no strategic thinking. Outstanding campaigns include those of Apple, Bud, Toyota and Sonic.

Unfortunately, such campaigns number only dozens out of the thousands of campaigns produced.

So why the disparity?

The answer, according to respondents in the strategic leadership survey: The focus is on "getting it done," not "getting it done right."

Backwards thinking
So often we collectively hear the following words from both new-business pitches and current clients: "We believe this is the right strategy to follow. Go out and get the research to support it."

Few agencies claim to not have a strategic process. But behind the scenes, few use the strategic process to the level they claim. Often agencies use the documentation of a process as evidence that one actually exists -- and a way of landing new business. However, once the strategy is created, it soon falls out of favor because of overcomplex methodology, time-consuming downtime, the necessity to invest in research, and because it's only practiced by a stoic few who refuse to train everyone else. As a result, rather than use the strategy, a group of people sit in a room and hash out ideas on how to get the job done.

I've sat in hundreds of these meetings, scratching my head at the extraordinary disregard given to research. It's like a physician who says: "Who needs an X-ray? I've been operating long enough that I know how to fix the problem."

But experience does not give anyone the right to assume an answer.

Fall from grace
It's just too easy to fall in love with one's own past brilliance and assume it will resolve future issues. This might well explain the recent agency movement of major accounts such as Fox Entertainment, Burger King, VW, Prudential, Scotts and Ford.

Are we really the strategic powerhouses we once were?

Here's another interesting insight gleaned from the survey: We may have conditioned ourselves to follow, even though we call ourselves leaders.

Consider that more than 90% of respondents strongly agree or agree that their employees need to improve how they arrive at "innovative, high-impact advertising, marketing and sales-generating ideas." Yet about a third strongly agree and 58% agree that "My agency provides proactive strategic brand and marketing leadership."

Who's fooling whom?

Improving follow-through
And if you need more evidence that agencies need to do something about the lack of strategic leadership in the business, consider these additional findings: 85% of respondents "have a strategic brief/process for their marketing assignments." However, 50% say they sometimes or never "use the brief/process throughout their company" and 75% of these briefs/processes sometimes, rarely or never "result in measurable outcomes."

Need more proof? Nearly 90% of respondents have a creative brief for assignments. But when asked if this creative brief was used consistently throughout the agency, 37% of them responded with "sometimes," "rarely" or "never."

Meanwhile, 40% of respondents do not use media briefs for media buying and planning assignments. However, of the other 60% who do use briefs, 66% sometimes, rarely or never use them.

Deceiving perceptions
The survey also examined brand positioning and branding status -- to determine if agencies and the corporations they service really are using their marketing skills. Responding to the statement "I am aware of my company's brand positioning," an overwhelming majority (80%) said they are strongly aware. The interpretation could be that brand positions are well entrenched -- but nothing could be further from the truth.

Responding to another statement, "I can clearly articulate my company's brand position to my clients, customers or prospective clients," more than a quarter of respondents said they could only somewhat articulate, or found it very difficult to articulate, their company's brand position -- and 30% of those respondents had identified themselves as senior management.
Tony Louw is CEO of Louws Management, a consulting firm specializing in business skills enhancement and brand and marketing consulting. In the agency arena, Louws has counseled on new-business development, selling creative and strategic planning.
Tony Louw is CEO of Louws Management, a consulting firm specializing in business skills enhancement and brand and marketing consulting. In the agency arena, Louws has counseled on new-business development, selling creative and strategic planning.

Look at these additional stats from the survey: An overwhelming 80% of respondents answered "no" when asked "Does your agency offer formal training on how to write a media brief?" And 45% of respondents said their company does not offer any formal strategic planning and development training.

Of the 55% that said "yes" to the previous question, half train only once a year, and a quarter do so occasionally or sporadically.

Recognizing the problem
So what's the upshot? We need to acknowledge the industry has a problem with walking the walk of its strategic talk, and we need to commit the resources and disciplines to train people to think strategically. In short, we must examine how we run the business of advertising.

Should we return to a model with a core research competence and expect all account managers, directors and supervisors to take ownership of each client's customer and competitive understanding -- seeking new ways of helping clients with these challenges? Or should we keep this role separate? It's time do both.

Return to the organizational and business model, making and holding all account personnel responsible for providing strategic insight and direction to clients on all matters concerning a brand's customers, channels and competition.

Separate research and make it responsible for providing data and analysis to all others -- while also seeking out the latest tools, models and predictive methods to keep the agency on the cutting edge of trends, market fluctuations and solution-based methodologies.

Sharing expertise
After all, if it's true that data drive decision, why shouldn't this area be made available as a common resource? In some instances, it might make sense to invest in specialized research facilities specific to vertical industries, such as pharmaceutical or high tech, which require specialized attention. It also could make sense to have the leader of this research facility be a real analytical and strategic genius. If so, he or she should make it a priority to teach all who touch a client's business to partake in solutions that make money for the client.

Let's not continue down the path where only the strategic-planning group is given the right to own brilliant thinking and strategy. Without brilliant strategic solutions applied to media, creative, interactive and public relations, all we do is perpetuate the ivory-tower mentality that only a few can think. It's time for everyone in marketing to acknowledge that we are in the thinking and idea business first, followed closely by the business of flawless execution.

By concentrating on execution alone, and leaving the thinking to the privileged few, we essentially negate our business value to the marketing community every time these few leave the agency or are otherwise unavailable. No wonder, according to a recent American Association of Advertising Agencies study, the average tenure of agency-client relationships is around 4.5 years. I still remember looking at Leo Burnett's client tenure list in the late 1970s and seeing more than 80% had been with the agency for at least 15 years.

Sure, we can blame clients for changing how they work, but I have always found that true leaders have a propensity for self-examination before blame.
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