Will ad agencies ever embrace content marketing?

The golden age of advertising. Remembrance of things past.

At Advertising Week in NYC last month, a panel of senior executives from some well-known agencies discussed the current state of affairs for the agency business. Their “big news” was the evolution of the traditional copywriter – art director team approach to ad development –  to a “tripod” approach that now includes a digital expert.

Similar statements from other traditional creative agency executives made it seem like they thought they were still in the “golden age” of advertising. This was back when a top agency would get paid a large sum of money to come up with a “killer” creative concept, executed by high production value ad campaigns in TV, print and then digital venues, supported by extensive media buys. 

The result?  Advertising campaigns created many memorable and iconic brands, and made clients and ad agencies rich in the process.

This "mad men" business model worked well when there were only three big TV networks, a few dozen prominent magazine and newspaper brands, with captive audiences willing to endure advertising in order to get to the entertainment and news content.

However, once disruptive technology in the form of  computers, the internet, social media, blogs and user-created content erupted, traditional audiences became their own programming directors and news editors, consuming exactly the content they wanted, where and when they wanted it, with the advent of Netflix, Hulu, DVRs and digital readers there was no need to tolerate intrusive advertising interruptions. 

Master of her own content realm.

Consequently, most of us today are looking for relevant content that offers a "fair value" exchange for our time and attention. In fact, we may go so far as engaging in conversation with content creators, and share “remarkable” content (as coined by Seth Godin) – that is, content worth remarking about, or at least sharing.

Savvy marketers now use content marketing to initiate a conversation, giving people a reason to come back for more relevant content. Simply blasting messages at a loud volume is no longer an effective nor motivational marketing tool, and the decreased value placed on ad creation reflects this. 

$ 90K per second just for production.

Brad Jakeman, President of The Global Beverages Group at Pepsico,  says his firm used to give agencies between four and six months to produce a single piece of marketing content (usually a :30 or :60 second TV ad) and would pay between $ 700,000 and $ 2million for each of them. “Now we need an agency that can produce content in days, with each piece costing $ 10-15,000."

Remember the 2002 Pepsi Superbowl extravaganza

 "For those who think young"  that featured Britney Spears (in her prime) and cost a whopping $ 8.1million to produce.

No wonder the agency business is suffering so badly, with shrinking margins and an inability to attract, retain or even afford the talent needed to effectively compete with the likes of Google and Facebook.

Yet, will content marketing be the saving formula for agencies?

Unfortunately it is unlikely because:

Most agencies still rely on creating the “big idea,” and have little interest in a conversation with consumers.

Agency execs respond to ROI question.

Creative agencies by and large are scared to death of accountability. Agencies like to sell “The Magic of Hollywood” and duck for cover when asked about marketing effectiveness, return on investment and use of big data mining. 

Content marketing is all about using engagement metrics (views / shares / comments / downloads / etc.) to help guide future content development, and optimize marketing spend.

Silos reign supreme: Many creative agencies disparage “direct marketing” and “digital” as a second-class tools, even sister agencies within the same holding companies like WPP and Omnicom rarely work across disciplines.

Agencies are also facing fierce competition from content marketing start-ups like Contently and NewsCred to traditional publishing companies like NY Times, Meredith and The Economist Group.

Was that a billable expense?

So it looks like the martini glass is still half full for most agency executives, though it is resting precariously on the edge of the table.

Pity, as advertising used to be such a fun, lucrative business. Then again, so was the trans-Atlantic cruise ship business before passenger airplanes came on the scene in the late 1950s.