Pick up any advertising publication (including this one) and you'll get a reassuring sense of deja vu. For what seems like forever, ad agencies have won applause for "strong creative," "sound business strategy" and "commitment to quality."
Fine qualities, all of them. It's just that, unknown to most agencies, there's a giant wrecking ball approaching their doors.
The problem is there's a growing disconnect between what agencies provide and what clients need. Just about every client has a program or strategy in place to improve customer retention. How many agencies offer customer retention consulting as one of their main services?
That leaves clients either creating retention programs themselves or finding companies to help them develop the relationship-building programs they need to compete in today's interactive age.
ONE OF A NEW BREED
Baltimore's Sky Alland Marketing is one of a new breed that's moved in to provide the dialogue management services ad agencies shun. It contracts with clients not to manage the media of their interactions (as an agency would) but the content of their interactions. This means operating in a wide range of interactive media: from telephone to fax to EDI to Internet.
Sky Alland does everything from calling a customer after the purchase to be sure he is satisfied to phoning prospects to better understand their concerns. Everything but overt selling. Which isn't to say its relationship-building approach doesn't make sales. One auto importer had a 50% improvement rate in prospects returning to make a purchase after Sky Alland called them to ask if they were satisfied.
Advertising has traditionally been a one-way process, from advertiser to user, and, in most cases, the information is delivered the same way to every user. "Big deal," you may be saying. "That's the way advertising has always been done." But that's exactly the problem. In this age of smart TV set-top boxes and Web sites that sort and store real-time video, where goes one-size-fits-all advertising?
For starters, it's safe to bet on an early, well-deserved death to irritating ads. At a time when consumers yearn for control and interaction, advertisers won't get far talking at consumers. They will succeed by talking with customers.
Secondly, we expect three forms of advertising to dominate-you already see signs of them:
Invitational Advertising. Unlike traditional ads that roar their message to the turned-off as well as the turned-on, these "invite" the user to hear or to exchange a message. Users may require an incentive in exchange for their time and information. Consider Web site "billboard" ads. A user can click on an ad and be whisked to the advertiser's site or, alternatively, ignore it. The advertiser may offer an explicit bargain to begin the dialogue with an interested user.
Solicited Advertising. This type allows customers to seek out advertising whenever they wish to buy something, or want to compare prices, features or services. Two forms predominate today: classified ads and the Yellow Pages. Interestingly, these are the two largest and fastest-growing ad vehicles. And the Web is accelerating the trend . . . creating a virtual bonanza for solicited advertising and putting the customer in charge.
Integral Advertising. This is a natural evolution of today's mass advertising-a kind of surround-sound primal push that fuses publicity, advertising and product placement. A good example: See the movie, buy the T-shirt, send for a set of the characters and converse with the stars online. Ironically, the success of the other two types of advertising will help spur this type. Now that customers can opt out of seeing ads, advertisers will need more entertaining ways to reach more mass audiences.
WILL ADVERTISING DISAPPEAR?
Does this mean advertising as we know it will disappear? No. But it will be a smaller part of every company's budget. Ironically, the continuing role for mass advertising will be to talk to everybody, including people who aren't interested in buying the product-especially when advertising "badge products." It's no fun to spend $100 on athletic shoes to wear to high school if your friends don't know how cool your shoes are.
Ad agencies, if they are to remain relevant in the 1990s, will need to begin managing dialogues between their clients and their clients' customers. This isn't done simply by setting up interactive shops. What's necessary is a philosophical turnabout: A recognition that winning the marketing battle means making the customer relationship an integral part of any advertising program.
Until now the role of the ad agency was to manage a monologue with segments and target markets. From now on, it will be someone's role to manage the dialogue that will support individual, one-to-one relationships.
Can agencies afford not to change? Let's answer it this way. What agency wants to wake up one day and say, "I have seen the past. And it is me."
Mr. Peppers is founder and president of management consulting firm marketing
