ANA Annual Meeting 2016

Verizon's Scotti: Agency Model Isn't Broken, But Lazy Marketers Are Screwing It Up

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ANA Masters of Marketing: The Power of Collaboration with Diego Scotti, Verizon
ANA Masters of Marketing: The Power of Collaboration with Diego Scotti, Verizon Credit: Clarion Pictures
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The ad agency model isn't broken, but many marketers are doing their best to screw it up, and they often make their agencies more dysfunctional by forcing integration or constantly pitting them against each other.

Those are among key takeaways from Diego Scotti, chief marketing officer of Verizon, in a Thursday presentation to the Association of National Advertisers Masters of Marketing Conference in Orlando in a sometimes scathing rebuke of his fellow marketers.

Mr. Scotti's speech was in part a rebuttal of the agency-model-is-breaking theme of PepsiCo's Brad Jakeman at last year's ANA, and other times a vehement departure from the single-agency models embraced by some marketers and holding companies. His focus was collaboration, responsibility for which he put squarely on the shoulders of chief marketers in a 10-point outline of how he does it at his $131 billion telecom behemoth.

"As an industry we are increasingly consolidating and outsourcing in ways that tie our own hands and make us frankly less interesting and creative," Mr. Scotti said. "I hear people blame the agency model, saying it's broken. I think that's frankly a lazy way of thinking about it. The current model requires more creativity and more diligence from us marketers because it's messy and involves so many voices."

His own organization has many ambitious people who "think they would be good at someone else's job," he said. But he said most marketing jobs in an increasingly fragmented and diverse world require specialized expertise, people who "know this topic so well that they can push the boundaries."

He takes a particularly dim view of the idea of developing a "great concept," then pushing it down through the system.

"The goal of this latest wave of agency streamlining we're seeing right now is obviously greater integration," Mr. Scotti said. "It's supposed to make it easier for those of us hiring the agencies. But the reality is that we get greater uniformity and more risk-averse middle managers, fewer new ideas and more redrafts. The voices and perspectives of true experts and innovative thinkers are buried deeper in the bowels of corporate giants, shielded from the light and sanded down before they ever reach our customers. And all because the agencies think that their clients are just too lazy to handle the best talent. I see some of our competitors going all in on single agencies, and I find it very hard to believe they are getting high quality work out of that."

Mr. Scotti's alternative is collaboration, led by marketers and designed to get agencies to put forth the best ideas without the pressure of a constant series of pitches.

He said he looks for "creative unicorns, humble enough to work with the other voices," including not just agencies, but also current pitchman and artist-in-residence Jamie Foxx, whose role goes well beyond the TV spots, and documentary filmmaker Rory Kennedy, he said.

Mr. Scotti brings leaders of all creative agencies together to talk strategy in monthly cabinet meetings and asks them to be transparent about what they're working on in early stages to help foster alignment. But he also has a separate "challenger board" of contrarian thinkers whose "only job it so tell us why our ideas are stupid," he said. "They keep me from believing my own hype, and they make sure we're staying on the bleeding edge."

Verizon tries to foster "healthy competition" among agencies, he said, but refraining from "putting everyone in constant pitch mode," and instead creating cross-agency teams whose success depends on making their ideas fit together.

Mr. Scotti said he also tries to reward performance and squelch politics in his organization to avoid a culture often found in marketing where "the people getting the rewards are the ones who happen to be in the right place at happy hours rather than the ones that come up with the best ideas."

And Mr. Scotti said he also tries to incorporate outside perspective by studying far smaller enterprises, such as Yeti coolers, for whom collaboration comes more easily because they don't have the money to waste doing it any other way.

In question and answer, Mr. Scotti acknowledged that competitive barbs, such as Sprint repurposing Verizon's former pitchman for its own message of data quality near-equivalence at a discount price, can make it hard at times to maintain focus. "It's an emotional category," he said. "It seems we have a lot of very highly charged CMOs that love talking to each other."

But he said, "We know we are the premium brand, and we have to behave like the leader," though he added, "we're going to throw some punches when sometimes our competitors are not telling the truth."