Art & Commerce: Strategic Retreat

Agencies were once a fountain of marketing ideas, says Kevin J. Clancy. Not anymore Time to face facts. Advertising agencies don't offer branding strategy. They did in the 1960s and 1970s. But during the lean economic times in the 1980s, agencies stripped their research departments to a bare minimum and never rebuilt as the economy recovered. So let's stop fooling ourselves into thinking that agencies are "branding strategists"--as many a new-business pitch implies. Agencies offer communications strategy. Branding strategy is their Achilles' heel, account planning but a Band-Aid. Consider BBDO. In real dollars, the agency quadrupled its worth over the past decade. Yet 30 years ago, the agency had 100 people in its research department; today, there are 35. Grey Advertising, McCann-Erickson and J. Walter Thompson were also powerful research machines, creating incisive brand strategies that spawned brilliant creative work. Where are the branding strategists today? Most either work for marketing consulting firms or, increasingly, management consulting firms, like Bain and McKinsey. While many independent subsidiaries of the advertising conglomerates own branding firms, those companies usually have their own clients and do not necessarily work for the ad agency's clients. This strategy void means some enormously critical marketing decisions are being based on qualitative research--such as focus groups and trend analysis--all of which the agency masquerades as being useful data for multimillion-dollar branding decisions. Just as a company would not invest in building two new semiconductor plants in China based on the opinion of eight vendors during a two-hour informal discussion, they should not trust their marketing investments to ad agencies that base branding decisions on subjective information. Strategy cannot be strategy without broad and deep quantitative and analytical analysis. More and more, CEOs have expressed their need to me for reliable, quantitative marketing strategy expertise--from somewhere other than their ad agencies. Why? CEOs face fiercer competition. Margins are slimmer. Shareholder pressure is enormous. Most important, marketing decisions--such as targeting, positioning and pricing--are increasingly tied to huge corporate investments in nonmarketing areas, including complex information technologies, sophisticated distribution agreements, and demand and supply chain partnerships. These are major corporate decisions that cannot be based on superficial analysis. Thus, CEOs are turning to sources other than their ad agencies. Top executives believe agencies are pushing their own objectives, like selling a new campaign. To add real value to their clients, agencies have two options: partner with true marketing strategists or rebuild their own internal strategy and research groups to what they once were. Good agencies counsel clients that they must deliver on their brand promises. Now it's time for agencies to deliver on their promises of providing a true marketing strategy. Kevin J. Clancy is chairman and chief executive officer of Copernicus, a Newton, Mass.-based marketing strategy firm. A former vice president of research services at BBDO Worldwide, he co-founded Yankelovich Clancy Shulman.

Brand Marketing

Art & Commerce: Strategic Retreat

Kevin J. Clancy

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Kevin J. Clancy