Are Big Ad Agencies So Clueless That Corporations Should Avoid Them?

I’ve been spending much time with ad agencies and focus groups lately and can only conclude that—with some exceptions—they are mostly clueless. Three years ago they had a traditional knowledge about consumers but didn’t know much about social networking and web 2.0 technology. Today, most of them don’t know about consumers and don’t know much about social networking and web 2.0 technology either. Mainstream ad agencies have one refrain—one message to their corporate clients—do social networking, do social networking, do social networking.

David Armano and I have been yakking about this all day on his blog as he explains why creators of social media are enjoying growing power. Check out the thread of comments on his post.

My take on this is the following: The 20 and 30-year olds in the agencies are sending their corporate clients to online spaces that they and their friends play in—MySpace, Second Life, you know the list. Or they are telling their clients to create social media that attracts their friends. Same thing.

The middle aged folks in the agencies are sending their corporate clients to the social media spaces that their teenage and 20-year old children spend time in. Some social networking spaces. Same thing.

Bottom line here is that many big ad agencies are making a huge mistake. They are pushing their corporate clients to chase technology, not their consumers. And if there is anything we know about the world we live in today, you must be one with your customers because your customers demand to be participants in your product/service/experience/brand. For example, sending big b2b companies who sell to 45-year-old men and women to FaceBook or Second Life is just nutty.

Our last issue of Inside Innovation has this great chart on the INdata page showing that different demographic groups participate in vastly different ways across the spectrum of social media. And they are constantly moving through it as they age, change careers, have families, etc. You just can’t send everyone to “social networking sites.” Companies and their ad agencies have to identify their consumers and locate their communities. Then they have to understand the culture and rules of these communities because differ dramatically.

We have two major forces at work today—globalization and social networking. Both have to do with community, connection and conversation. Globalization opens up a whole new panoply of consumers in their own communities with their own cultures. Web 2.0 is doing the same—it is growing new communties with their own cultures. THESE ARE WHERE CONSUMERS LIVE! And they want to actively participate in the products and services that make up their lives. That’s the new stuff.

But traditional ad agencies still don’t get it. You can’t just

send every client to the same five social media sites or have them create five similar kinds of social networking vehicles. What you have to do is get to know their customer culture.

That's why Continuum, IDEO, ZIBA and other design/innovation consultancies and being drawn into the brand business (IDEO just opened in New York, the land of the brand). With their deep roots in design tools and methodologies that are ethnographic and anthropological, they have a different way of connecting to the consumer. These design/innovation consultancies know how to observe and understand customer cultures--they have dozens and dozens of anthropolgists and social psychologists working for them. They can get to the magic of "unment" needs better than focus groups and marketing research which cannot.

What ad agencies need to learn is how to do this. They have to connect their clients to their customers, not the latest technology. And if they do their job right, they might even discover, heaven help us, that some of them belong in print. Because that is where most 40 and 50 year old managers in the US, Europe and Asia spend their time. Still.

And when ad agencies do put their clients in the social media space, or create new ones, it's got to be where their customers reside, not where their friends or kids communicate.

To be frank, I thought everyone kind of knew this by now. CEOs and top managers really have to get control of the ad budgets and make sure they are consumer-focussed, not tech-centric.

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