This issue of Research Matters contains a recap of the major themes presented at the 2009 4A’s Leadership Conference, held April 27–29, in San Francisco. The speakers brought their interpretations of the conference theme—The New Realities—and this Research Matters top-lines their views of: social media; insights into what marketers want; the past and future of mobile marketing; the diversity imperative; practical guide for smart environmental marketing; and useful tips for introducing the project management function in your agency.
The theme of this year’s 4A’s Leadership Conference was The New Realities. Nancy Hill
, 4A’s president and CEO, kicked off the Conference by announcing a few new realities for the American Association of Advertising Agencies, the first one being that the organization will now be known simply as the 4A’s. This change recognizes and symbolically eliminates the constraints imposed by “American” (we’ll soon be international) and “Advertising Agencies” (the moniker does a disservice to member firms specializing in public relations, promotions, media, direct marketing, etc.). Hill talked about spending the past year listening to members. She stated that the Association will be confronting the tough business issues head on, and she banished the organization’s pre-existing mission statement with the statement, “All you need to remember is this: The 4A’s statement of purpose is to provide leadership, advocacy and guidance to the advertising community. End of sentence.”
Continuing with The New Realities conference theme, Tom Carroll, president and CEO, TBWA Worldwide and 4A’s Chairman, pointed out that at last year’s conference, it was all about digital. This year it’s all digital, but not all of it matters. The new reality is that agencies need to scrutinize everything and determine what matters and what doesn’t matter. Agency leaders must ask if it matters to the business, the clients, the brands, and the future. And the inescapable topic threading throughout the conference—what currently seems to matter most—is social media.
While the economic realities of the agency business were amply addressed during the annual Executive Workshop for Small and Mid-Sized Agencies (SAMs), and diversity took the spotlight in a number of presentations, social media was the topic that bobbed to the surface in virtually every other session, regardless of the purported subject matter.
The focus on social media is evidenced by the following points made during various presentations:
- Online social media topped the list of 2009 growth areas reported by marketers (64 percent), followed by online search at 56 percent, online brand at 40 percent, and mobile at 38 percent. Social media was also seen as this year’s trend with greatest impact (47 percent) versus consolidation of retail (12 percent), user-generated content (10 percent), and mobile marketing (8 percent). (From New Business 3.0 founder Cleve Langton’s presentation, “Insights on Effectiveness.”)
- Two-way media (digital, mobile, PR, and events) are all increasing at the expense of traditional one-way media. (“Insights on Effectiveness,” Langton)
- A survey of Effie Award winners revealed that 90 percent of them used four or more media in their winning campaigns. Only 10 percent used three or fewer media, and the average number used was 6.8 media. Tellingly, 99 percent used the Internet. Even more tellingly, use of consumer involvement was up 67 percent over the previous year. (“Insights on Effectiveness,” Langton)
- “In the current environment, we look for the vast ripple effects made possible when consumers become your voice. Today’s new question when evaluating creative work has become, ‘Is it YouTube-able?’ ” (Amy Fuller of MasterCard, quoted by Langton)
- Mich Mathews, senior vice president, central marketing group, Microsoft Corporation, discussed crowdsourcing—outsourcing of idea generation to consumers. The “silent majority” wants to stand up and be counted if a brand gives them the opportunity to do so. To illustrate, Mathews reported that 17.5 million people are on the Xbox LIVE site. People were invited to create a game and the community of users voted off the least-liked ones. The program included the “requisite silly Facebook app.” Ultimately, the top-voted game on the site became the most downloaded online game for a full seven weeks.
- Mark Addicks, senior vice president and chief marketing officer, General Mills, talked about testing recipes online and allowing the online community to select photography for product packages. According to Addicks, in the food industry, online communities and community activists are very powerful. There is a great deal of sharing and commenting on recipes. A mommy blogger opinion can quickly go viral, and the marketer cannot control any of this.
- Consumer engagement is the new reality. Yes, there are people who just want to eat Cheerios and don’t want to interact in the community, but you don’t need to market differently to them. (Addicks)
- In describing mobile as a new medium, Cyriac Roeding, entrepreneur-in-residence at venture capital firm Kleiner Perkins Caulfield & Byers, pointed out what makes it unique as a medium—it is context-based, personalized, and (social media watchers, please note) very viral. Users’ friends are already listed in their phone books, ready for peer-to-peer transmissions.
- David Pogue, personal technology columnist at the New York Times, proffered some wisdom and advice about marketing through social media. He contends that many marketers have avoided social media due to fear, lack of know-how, and the burden of allocating the staff time required to monitor it.
- Pogue succinctly illustrated the definition of Twitter using a simple equation on a Keynote slide: “Speed + ego – privacy = Twitter.”
- Unfortunately, public relations and advertising are perceived to be inauthentic, while the “real people” antics on YouTube are seen as genuine, according to Pogue. For example, “Will It Blend?” a Letterman-like unpolished online reality program at www.willitblend.com, has caused sales of Total Blender on Amazon to quintuple. (Pogue)
- Pogue’s advice to advertisers is not to stress over social media. Each one is a huge drain of time and money; geeks and media are the groups primarily infatuated with the trend, and there is no need to embrace the entire array of social media types. Nevertheless, marketers should assess them and stay alert to opportunities.
- Jason Kilar, CEO, Hulu, said he checks Twitter about 20 times a day to learn “what his brand is.” He declared that the brand is “what people say it is when you are not in the room.” Twitter postings enable brand stewards to learn quickly what’s working and what’s not working.
According to Ning co-founder Gina Bianchini, social communities are the killer app of the Internet. There are currently 23 million people participating in Ning networks, which give people a mechanism for forming their own social networks around interests and passions. The social network “Ask a Ninja” was created because e-mail was too limited a medium to reply to all the questions received by the group’s founders, and it has become a successful fansite. Entrepreneur T. Boone Pickens launched his PickensPlan site as an organizing tool. Ultimately, it mobilized an army of 200,000 wind-energy advocates. Policy makers in Washington have taken notice.
What Marketers Want
Cleve Langton, founder of consultancy New Business 3.0, presented results from several recently conducted studies among marketers, most notably:
- The current mindset of most marketing organizations is “innovation mode” (63 percent). “Reorganization/consolidation mode” was the second highest answer (21 percent). Trailing far behind were the responses “status quo” and “survival mode” (6 percent each), and “reduction mode” (3 percent).
- Agency capabilities ranked by importance:
- Non-traditional media capabilities
- Understanding of the category and client’s business
- Ability to work cost efficiently
- Strategic development capability.
- Sixty-two percent of marketers do not expect to change agencies this year; 19 percent said they will; 19 percent are not sure.
What effectiveness means in 2009:
- Cost control
- Master the media mix
- Be agile and flexible
- Deliver actionable insights versus observations (insights and behavioral targeting capabilities beat out brand strategy in importance)
- Be innovative
- Embrace metrics
- Collaborate (integrated marketing is primary concern of ANA members)
- Have a sense of urgency.
The Past and Future of Mobile Marketing
This was a lively presentation by Cyriac Roeding, entrepreneur-in-residence at venture capital firm Kleiner Perkins Caulfield & Byers.
A little recent history:
- 1994: pre-Amazon, and e-mail was only for geeks
- 1999: Google was one year old
- Mobile has been hailed as “Next year’s revolution” for the past eight years
- 2001: Mobile started as push ads with a message from a church in Singapore: “Thank me it’s Friday. God.” This was fun, but it wouldn’t be if you got messages from 10 brands a day
- 2002–2004: On-pack; offline pull. In the United Kingdom, consumers could text a code found on McDonald’s packaging and win something. A great but limited idea. There was a six-to-nine-month lead time to get the code on the package and integrated with the promotion; if the brand didn’t have a package on which to print the code, the idea was worthless.
- 2005: TV integrations; classic media pull. Viewers could affect the plot twists in an episode of “CSI: NY.”
According to Roeding, the evolution of mobile went from annoying to limited to scalable applications.
Roeding described the incredible penetration of mobile elsewhere in the world (e.g., monks texting in Bhutan, where there is 40 percent cell phone penetration; mobile use in remote parts of the Brazilian jungle, etc.). Just two years ago, the United States was a laggard in texting, but we’ve caught up at an unbelievable rate: Americans now text four times more than the British. The country has witnessed exponential growth in adoption of the medium:
- 2003: 2 billion texts/month
- 2004: 5 billion texts/month
- 2005: 10 billion texts/month
- 2006: 19 billion texts/month
- 2007: 48 billion texts/month
- 2008: 110 billion texts/month.
Current state of affairs:
- In a fundamental shift, the United States is about to take leadership in mobile innovation. The current debate is whether Apple or Google is more innovative; two years ago, neither company was in the space at all.
- With the advent of the iPhone, mobile phones began to turn into mobile computers. Apple is funding software developers creating applications for the new device.
- Most people use cell phones for talking and texting. iPhone users do all sorts of activities―reading news, searching, watching video, participating in social networking, listening to music, playing games, etc.—10 times more than people using other mobile devices.
- 2001 launch of the iPod. One million iPods were sold in the first two years; 30 million downloads from iTunes store in its first two years. Compare this to ...
- 2007 launch of the iPhone. 20 million iPhones sold in two years; one billion applications downloaded in its first nine months of existence.
- Roeding emphasized that mobile is not a small PC or a tiny TV screen; it’s a completely new medium, unique in that it is context-based, personalized, and extremely viral.
What is required in order to unlock mobile’s full potential as an advertising medium?
- Simplicity: should be able to buy mobile media with one phone call
- Scale: reach 20 to 50 million unique users
- Score: need a couple of trusted currencies to provide metrics (a Nielsen for mobile)
- The future of online is offline: Online media will drive offline retail. With a 19 percent/year growth rate, $1 trillion in retail sales (40 percent of retail sales) will be influenced by online activities by 2011. Mobile is the missing link that will drive foot traffic in stores, drive basket size and margin, drive the quality and efficiency of the in-store experience, and build frequency with behavior-based offers.
- “Mobile is social. It is the glue between the physical and interactive worlds. It is the missing link between the brand and point-of-sale. The future of online is offline,” Roeding said.
A Few Words About Metrics
- Metrics help to minimize budget cuts: “If you can measure it and prove ROI, marketers will spend behind it.” (Mary Miller, PetSmart CMO, quoted by Langton)
- “Torture the data and it will confess.” (Paul Price, Rapp, quoted by Langton)
- “Data can’t make the decisions; it’s a guide to making the decisions.” (Tom Carroll)
- According to Mich Mathews, senior vice president, central marketing group, Microsoft Corporation, Microsoft tracks online activities and kibitzing among users online, downloads of white papers, etc. Four million people participate in the conversation online. 900,000 consumers view a video, but is that a good number or not a good number? And what is the implication about how they feel about your brand? They’ve engaged, so maybe they’re feeling better about the brand, but does that mean they’re further along the purchase funnel?
- Three percent of Microsoft’s media spend is allocated to new media and digital channels, such as RSS. A mistake the company made was putting experimentation in one place, with the campaign separate; they should have been together. The problem is demanding metrics from experimental efforts. (Mich Mathews, Microsoft)
- Research and analytics will eventually lead to a tipping point where marketers/agencies can document that YouTube leads to sales, and that will lead to more adoption and comfort with it. (Mark Addicks, General Mills)
The SAMs Workshop hosted a panel on project management comprising both agency representatives and consultants with extensive experience in the discipline. Moderator Catherine McIntyre-Velky, director of radical efficiency at Persuasion Companies, defined project management as the discipline of organizing and managing resources in such a way that these resources deliver all the work required to complete a project within defined scope, quality, time, and cost constraints.
The project manager is not necessarily a new hire, but could be an incremental cost; as an agency can shift existing staff to the position and train and adapt his or her skills to cover this function. Having good project management capabilities can position an agency to grow. It avoids reinventing how the group works when already knee-deep in client work.
A benefit is consistency in managing work, so people can shift seamlessly among accounts, since the processes are the same for all.
It is critical that there is a clear delineation of responsibilities between junior account people and project managers. For example, an account person is client-facing, but the project manager typically is not.
There are separate career paths for each of these positions. Account managers are stewards of the brand and the client’s business. Project managers are the internal stewards of the agency: its work, budget, new business pitches. Project managers make sure that agency staff members have the information they need to do their jobs properly.
In some agencies, project management has replaced old traffic models. Other points are:
- One agency reported having both traffic and project management roles. Since many of its clients also have the project management function, the counterparts can interface. Project managers do it all until production starts, at which point traffic people step in, but the project manager stays involved to facilitate.
- The PM may be involved with the estimating process, serving as a “gatekeeper.” The PM also may take part in the creative resources management function, including estimating creative hours needed for a project. In those agencies, the project manager reports in to a neutral senior management person, so as not to be perceived as biased to one side or another. Another agency has the PM reporting to the president and CFO.
- In some cases, the project manager is involved with estimates but not responsible for them. PMs typically report to a senior managing director level, and are often responsible for creative resource allocation. There was consensus that reporting to senior management is vital, as the project manager needs to be empowered to enforce.
- In some instances, the creative resource manager and project manager work together as peers, and in others, both roles are filled by the same person.
Characteristics of good project managers:
- PMs should have the ability to remain calm in a storm
- Be detail-oriented but also able to see the big picture
- They must be proactive and foresee issues coming down the pike
- They need knowledge of agency workings and must speak the language of each discipline, since each department doesn’t necessarily communicate well with other departments.
How many project managers does an agency need? There is no formula and a lot of variables determine if a project manager will be dedicated to a single client or will handle several accounts. One agency reported a ratio of six or seven project managers to their agency staff of 150 people.
The project manager is a generalist across disciplines but a specialist in getting things done. Their role is to facilitate communication, not to be a go-between for warring factions of creatives and account people. Ideally, the project manager will get them together and tell them to resolve their issues themselves.
Project managers free up senior account people to focus on the client’s business instead of worrying where a printing job is.
Panelists agreed that best way to introduce project management into the agency is to bring in a senior project manager from outside to work with a particular account. That person can then groom a junior account person to gradually assume project management skills and responsibilities. It’s an evolutionary process. There needs to be top-down implementation or else the skills won’t be there, and the agency culture won’t be responsive, won’t embrace it, and won’t respect it.
But will clients pay for this? The biggest barrier may be fear of initiating the conversation with the client. Panelists said clients are often fine with the concept once it’s presented properly: as a benefit to more efficiently manage the work. There can be cost savings for the client with this new role. Present it as enhanced traffic, but make it clear that it’s a significantly deeper change than a mere title change.
Diversity and Environmental
The 4A’s thanks WARC.com for permission to include the next two articles, by Geoffrey Precourt, U.S. Editor, www.WARC.com.
Boosting Diversity in US Agencies
Tom Carroll, president and CEO, TBWA Worldwide, and chairman of the American Association of Advertising Agencies (4A’s) Board of Directors, was blunt and honest as he introduced a panel discussion on “The New Realities of Hiring and Inclusion,” at the organization’s 2009 annual Leadership Conference: “We’re not intentionally not diverse. But we suck at it.”
Nancy Hill, president and CEO, 4A’s was more diplomatic in her explanation of the problem: “So what are we doing wrong? And how can we get people excited about advertising again … or at least excited for the first time? [An answer] lies in the concerted efforts by the 4A’s and the entire industry to provide a greater level of transparency and diligence in the way that we recruit, train and develop our talent, particularly diverse talent.
“It seems to me that a real, tangible commitment to diversity and inclusion—coming straight from the top—is our most powerful tool to win the hearts and minds of the next generation of agency leaders, and at the same time become more inclusive, and more relevant.”
In fact, since 1968, the 4A’s has sponsored a Multicultural Advertising Intern Program (MAIP) whose alumni network includes more than 1,600 members. And the 4A’s Foundation has distributed more than $2.5 million in scholarship funds to students who have pursued studies in creativity and the media arts.
At the 2008 Leadership Conference, Hill announced the 4A’s role as founding partner of Howard University’s Center for Excellence in Advertising, an institution “designed to recruit and train diverse mid-career and senior executives from within advertising and from other industries with transferable skill sets, and to help identify opportunities for them in this business.”
Yet, Hill allowed, “I know a common criticism that gets tossed at the 4A’s—and at your agencies—is that the pipeline for entry-level, diverse candidates has existed for some time, and has yet to resolve the dearth of African Americans in middle and senior ranks. Clearly, an open door is not enough. And it isn’t.”
Back at the “New Realities of Hiring and Inclusion” panel session at the 2009 Leadership Conference, Chris Surrey, executive director and founder, Project54Tour, PaintBox Laboratories, BuzzBOX Digital@ The Buzz International Group, recalled, “After 15 years in the business, I discovered that I had no ladder I could climb. It hurt. I had no place to turn, no one who could help me see beyond the dreams … I had to go out and reinvent myself.”
Fellow panelist Malcolm Gillian, vice president, music & entertainment, Momentum Worldwide, came to advertising after business school, law school and employment at Morgan Stanley, Ford, and American Express. “I always wanted to be a banker. At American Express, however, I began to work with agencies. And I discovered that that was where my passion point was. It was in music and entertainment … My initial thoughts of ‘money, money, money’ turned to ‘passion, passion, passion.’ ”
Allowing that he came to the agency business through in an unconventional manner (“If I had gone through human resources, I would have been a finance guy interviewed by finance people”), Gillian offered that the advertising business needs to make a “sustained commitment” to inclusion. Programs start, but they go away. Some of it is in economic and market factors. It’s not willful or intentional. But the programs need to be sustained. They need to start at the top and drive down through the organization, through training programs and to hiring.
“If people have a passion—if they are seeking out our industry—we need to hear them,” added Cheryl D’Cruz-Young, managing director in the New York office of Diversified Search Ray & Berndtson. “The market keeps you real. What do your clients look like? The same as they did five years ago? And what do your customers look like? And what will they look like in five years’ time?
“If you’re going to be forward looking, you must be mindful of massive changes in demographics. If you ignore them—or if you’re simply unprepared for them—you’re going to be less relevant.”
The marketplace assumption, D’Cruz-Young continued, “is that the lack of minority talent is due to a shortage of qualified candidates. We do not believe that is the case. At all levels, we’ve demonstrated there is extensive diverse talent.”
“Once candidates become employees,” she added, “the levels within an organization can constrain people.” If the “right core skill set” is not identified, advancement becomes difficult. “Look for people with a passion,” D’Cruz-Young advised. “Be more proactive and broader in your thinking.”
Surrey added that mentors can help “navigate the business and navigate career paths … My first mentor was Ron Berger [principal at Messner Vetere Berger McNamee Schmetterer/Euro RSCG]. He changed my life. He never looked at my résumé. He wanted to find people with a passion. He wanted to give his people what they wanted.”
“ ‘Diversity’ is a word that we need to address,” Surrey added. “It feels like it has a negative connotation. But we need to embrace it as a positive thing, a beautiful thing that allows us to address the problems of inclusion. And that’s a very positive thing. We need to be advocates for change in a positive way: Let people tell stories about what they want and need.”
“There always are new ways of looking at culture,” said Lincoln C. Stephens, founder and chairman of Dallas-based Marcus Graham Project, which he said was “a network with the intent [to] strategically focus on building the next generation of diverse male leadership in the advertising, media, marketing and entertainment industry through mentorship, training and career development.” Stephens, who previously worked in account management at Carol H Williams, Martin Retail and TracyLocke, advised, “Be creative in your thinking about how you want to reinvent yourself … Balance your choices as to how you move your career forward.”
Tiffany R. Warren, chief diversity officer, Omnicom Group, and founder of both ADCOLOR and The ADCOLOR Awards, at the age of 25 was the youngest manager of Diversity Programs at the 4A’s. For six years, she ran the association’s diversity initiatives, including the MAIP internship program.
Being a mentor, she explained, involves advocacy in a protégé that “goes above and beyond to make sure you succeed.” Such commitment, Warren said, “makes people unafraid to reach up, across and all over the agency to create a network of support.” An agency, in turn, needs to be “completely transparent to capitalize on what’s going on and to get a competitive edge,” Warren added. “They need to continue recruitment programs if they’re already in place. And, if not, they need to begin them.”
[Note from Marsha Appel, 4A’s: In an unexpected, but beautifully complementary presentation the next day, Dan Wieden, co-founder of Wieden+Kennedy, took the stage and echoed the sentiments expressed by Nancy Hill and the entire diversity panel. Wieden noted that his agency (the agency for Nike) pays enormous sums of money to white, middle-class kids, to create messages targeted to inner-city kids who create the culture the white kids are trying to emulate. He talked about how his agency is trying to increase its minority staff representation, but admitted they’ve got a long way to go. Wieden’s comments couldn’t have been a better choreographed coda to the previous day’s panel.]
Why Smart Environmental Marketing Is Good for Business and the Planet
The new realities of green—of environmentally smart and sensitive marketing—has moved from “just being good for the planet to making money and being good for the planet,” David Jones, global chief executive of Havas Worldwide, told attendees.
“The reason we’re in the current economic crisis is that we were driven in the 80s by a Gordon Gekko pursuit of another kind of green,” he added. “And the presence of a new president with a new green agenda stands in sharp contrast to an administration that was mocked for its lack of attention to environmental issues.
“We’ve had any number of reminders from nature in the form of tsunamis and hurricanes,” said Jones. “And we’ve seen how powerful the environment can be as a reinventor of brands. Al Gore, a failed also-ran presidential candidate, became one of the most respected citizens of the world—and a winner of the Noble Peace Prize—all because of his work on behalf of the environment.”
Jones offered “six tips” for smart environmental marketing:
- Be relevant: Jones advised against “greenwashing”—jumping onto a green platform simply for the sake of engaging in a popular movement with no real brand connection. “There’s been a rash of green messages. But consumers know who’s genuine and who’s there to exploit a quick buck.”
- Be real: “Customers can see through you when you’re not.” Case in point: A “great ad” in 2008 for a Chevy Volt—a car that won’t be available until 2010. “It’s just not authentic until the car is here,” Jones said.
- Put CSR at the heart of your business strategy: Socially responsible behavior doesn’t exist in silos. It runs throughout an organization, as it did last year at British retailer Marks & Spencer, whose Plan A (“because there is no Plan B”) permeated the entire marketing program.
- Be differentiated: “Because so many people are talking about issues, standing out is a challenge. There are two winners, according to Jones.
- Give people a clear role to play: On March 28, Earth Hour gave one billion people all over the planet a chance to become active environmental activists, Jones said. And, he added, much of the participation was driven by social networks such as Facebook and Twitter.
- Act before somebody acts on your behalf: “Forty percent of all lead in landfill is created by consumer electronics,” Jones said. Greenpeace’s global “Green My Apple” campaign is driving Apple—and other marketers—to re-evaluate their environmental programs.
The story, according to Jones, quickly is becoming, “Who’s getting greener? Who’s going to get there first? Ten years ago “only niche companies” were focusing on the environment. Today, Jones said, enterprises are “making money” with a strong green emphasis.
Jones’ roster of other environmentally smart companies includes Reckitt Benckiser (the environment and profitability “are not mutually exclusive”); General Electric (“imagination at work”); Virgin (Richard Branson “is not in this as charity; he wants to make money”); Project Red, Toyota (“our planet doesn’t come with a spare”); and Walmart (a company for which “sustainability is not an option,” has started marketing t-shirts made from recycled plastic Coca-Cola bottles).
More importantly, the green agenda seems to resonate with consumers: Jones reported that 82 percent of US consumers expect companies to focus on the environment even in the middle of the recession and 67 percent said that a friendly, green perspective would influence their purchase of a product.
And, more practically, Jones noted, “there’s no business to be made on a dead planet. But there’s no reason you can’t be wildly profitable as well.”
[This was a just a sampling of what attendees experienced at this year’s Leadership Conference. You won’t want to miss next year’s combined Leadership and Media Conference, so look out for announcements.]