Gavenraj,

As a former agency exec now on the client side, there are more barriers to the issue of how/when to use social media than agencies not embracing.

The tentativeness with using the social media space is due to many factors, A re-occuring theme I hear, both as an agency person and now a client, is that with the fragmentation of the social media space, how does a brand/corporate sponsored site stand out - in essence, why would a consumer want to visit & join a branded site vs. the several thousand non-branded sites that exist.

While this a valid question, it fly's in the face of what the web is. Fragmentation means that you will likely never be able to speak to everyone. There will always be other communities on the same topics that some folks will gravitate to for whatever reasons. Big brands tend not to think this way, mass media (TV) has trained them differently. They are use to reaching 80 - 90% of the pop with a :30s spot (a non-achievable stat these days even in tv).

In order to move ahead, clients & agencies need to embrace this framenting of consumer behavior. We can't continue looking for the next shot gun approach - the scale of tv - b/c that's not what consumers want or how they behave. We also have to realize that we're no longer in control, push marketing doesn't work as consumer select when, where and how they want to be spoken to. It's much more fluid then the current process of bringing brands & products to market.

posted February 29, 2008

The situation is very similar than in the beginning of web advertising. It would be too easy to say that the advertisers and media agencies are too old-fashioned. Very often the reason is as well that the social networking sites don't know what to sell, what is their product. The lack of experience in media marketing may also mean, that it is not so well understood how is their service positioned in the market amongst the others. There should be metrics, clear data that would make it easier for the advertisers to compare reach. No matter what the medium is, the advertiser is interested in contacts that can be potential customers.

posted February 29, 2008

Traditional agencies are funny creatures. I definitely would not call them early adopters. They have built so much process around what they are good at, it’s very difficult for them to change.

My company has tried selling our solutions through the agency channel. Overall, we’ve been met with enthusiasm for our solutions. But then everything stalls. While the decision makers get excited about the value, process friction makes it difficult for anything to happen.

In three years, I have seen very little revenue come through agencies. We’ve found it is better to go right to the client, make the sale there and have them back their agency into the deal. This has been a much more successful strategy for us.

I suspect, this is also the best path to get agencies to take a serious look at the social media space. If you have enough clients bringing social media to in the back door – and the agencies aren’t in control, or getting their cut – they will start to look at it. Remember, when web development came along?

The appeal of the agency channel, with all of those client relationships in place, is very compelling. Unfortunately, in the real world, you will probably spend a lot of time and energy educating and holding their hands for an unknown return.

posted February 29, 2008

Brehnen Knight from Brickfish may have some profound thoughts on the topic....

posted February 29, 2008

When the traditional agencies see their clients reallocating budgets historically designated for traditional media to social media/marketing

posted February 29, 2008

My two cents....

Traditional advertising agencies can continue their business model by remaining highly unaccountable.

The beauty of marketing on the web is that it creates and forces accountability of all marketing programs.

There is one word which very quickly summarizes what the eRevolution is
all about.

People think its all about technology.

However, the word is "Accountability."

The online businesses that are reaping the highest rewards follow one very
simple formula that is at the heart of the eRevolution.

They want to know how many visitors are visiting their websites and from
that amount how many are becoming customers.

This is referred to as their conversion rate. All prosperous online
businesses live, eat and breathe their conversion rates.

All floundering businesses are unaware of this simple yardstick.

Speed is Where the World is Going....if you know your conversion rates
you'll enjoy the ride a lot more.


Traditional ad agencies are seriously intimidated by the "accountability" that the infrastructure imposes upon them. These same ad agencies have ben selling crappy media to clients for agents and can continue to do so because those "promotions" never had a yardstick for measurement.

Smart corporations will bypass the old agency model when they understand that "accountability" is what the eRevolution is all about.

Links:

• http://www.haraldanderson.com

posted February 29, 2008

Your question is very easy to answer. Most agencies will NEVER understand the value of social media and social marketing. Why? A few reasons, but a few main factors. Number one, it's not SAFE for agencies to recommend to their clients. If an account executive has to explain viral marketing to a client and get's a blank stare in return, how strongly will that AE push the client to develop a social marketing campaign? Secondly, how do agencies CHARGE their clients for this type of service? What's the economic model? There may be some production money, but no "media buying", planning, placing, etc. This takes away major revenue streams from the agency, therefore reducing revenues. In addition, what metrics would agencies use to quantify the success of a campaign? You see where this is going?

Now that's not to say that some agencies are extremely good at getting clients to not only buy in to new media opportunities, but like anything else, it will take some time. In our case, we want to stay ahead of the curve, but in the auto industry, we are the exception rather than the rule. And quite frankly, I like it that way.

In terms of educating corporate brands, showing the value by selling product or gaining market share speaks volumes. Most major brands are like sheep. They like to go where everyone else goes, and they think there is safety in numbers. If you really want to make an impact, you just need to get to the right people. The old saying is that you should never take a "no" from someone in the organization who can't give you a "yes".

Keep looking for someone high enough in the company who can say yes, give them a simple "value" proposition, where you save them money, increase their revenues, or grow market share, and if you provide them with a turnkey solution, you may be in business.

Good luck.

G.

posted February 29, 2008

Hire smaller independent agencies - they usually try harder

Links:

• http://open4net.netpr.pl/

posted February 29, 2008

I think there are several answers to this question.
First being fragmentation. It is the universe size vs. the reach number. You cannot quantify it, therefore large agencies and or clients hesitate to use it. Many agencies and clients have become nothing more than bean counters, therefore, the ability to creatively reach the target is hard for them to deal with.
Second, be it the marketing manager or the account executive does not want to allocate funding from the annual or quarterly budget to this effort and not succeed.
I suppose these two answers are intergrated but like anything "new" no one wants to be the one to fail.
Fran

posted March 1, 2008

A really good question, and some really nice answers which I agree mostly with. Another aspect of the situation is that though a lot of people get their information and media online today (in the past those people were mostly the "web savvy" but now that isn't so much), there is still a very vast population of people out there that still get it from television and other mediums like the newspaper, some magazines etc... I'm thinking as long as there are people paying attention to a certain medium, there will always be ads to look at or to hear (radio stations still sell ads, though that market is fizzing out these days, it is still around).

So the day getting information and media from the web becomes a majority thing for everyone, is the day the older, more traditional companies and organizations can find more sense in taking social media and marketing seriously. Right now is an interesting and big transitional stage in marketing that has only happened a few times in the past.

Take pictures. = )

-Hrag

posted March 1, 2008

LEARN | SHARE | ADAPT

The key points to get into that arena and traditional agencies aren't there.

Corporate brands needs to understand that the "Best Practices" book is not enough to get into social media. If they want to be the leader they have to take some risks beyond TV, print and radio.

Media is irrelevant from a creative POV so they have all the tools and expertise to be really successful.

posted March 1, 2008

Here is a white paper that discusses ways consumer companies can start social network marketing.

http://www.octanecorp.com/portals/5/whitepaper/socialmarketingconsumer.pdf

I would assume that many agencies are looking into it and will get active, especially when dollars start going to companies that specialize in Social Network marketing.

posted March 1, 2008

It probably has to do with age more than other factors. The authority over budget allocation resides in agency/company leadership that doesn't really understand social networking. These individuals are older and have trouble perceiving exactly what it is that the youth in their organizations are explaining to them. The senior decision makers are smart and generally have been the ones who brought in the younger Internet and mobile specialists to assist them; however, can't "feel" the impact new communication models and new technologies are actually having.

posted March 1, 2008

Marketers (like the rest of us) are pragmatic beasts. As the evidence mounts that their customers are spending more time online, and more of that time amid conversational media -- all at the expense of time spent with offline media -- they will get religion. And the more us new-media types can improve the metrics that show value beyond clicks (especially the interconnectedness of advertising, PR and search equity), the faster we'll all get there together.

Links:

• http://chasnote.com/2008/03/01/american-express-invests-in-search-equity/

posted March 1, 2008

A couple of things about the Social Media / Social Marketing. It is...

1. Accountable - The ROI is easily measurable

2. Targeted - You know who are targeting and how they behave

3. Viral - The close knit nature helps the message travel light years in seconds

Now let us look at the traditional agencies vis-a-vis these three parameters...

Accountable - The moment a client starts counting the number of leads generated or the conversion rate he would say no to many TV and Print media channels (most of our clients have already started doing this) [When I say "no" it is for the traditional way of advertising. Not to be construed as a "no" to the channel as a whole]. Therefore there is a bit of inertia that a traditional agency would have to break before accepting the ground realities and relook their strategies towards big billings.

Targeted - We all know how long we have taken even to look at a "Dear Mr..." (personalization or focused communication) from the general SEC A, B 25 year old male we have been used to. Now the shift is even faster due to the fragmentation of media and the shrinking attention span. We are currently living in the SEM economy which has created a sense of urgency in clients and agencies alike to address this targeting and relevance question.

Viral - Traditionally the viral effect (WOM etc...) has played an important role in marketing campaigns, the only thing is that nobody defined what viral is those days and therefore some traditional agencies still put the creative awards they could win before the viral multiplier effect for the brand. Now, with most of the clients getting ROI savvy the traditional agencies either need to make amends now or perish.

To sum up, the traditional agencies would understand the value once they see their bottom line (ROI) shrink in the coming years.

posted March 2, 2008

Gavenraj -

Thanks for asking this question, this is an important subject. I see two important items that we need to consider here:

1) Let's follow our own advice. I think we all agree that media fragmentation means that a one-size fits all approach will no longer work for our advertising partners, and the reality is, it won't work for us either. We need to recognize that "social media" is a relatively broad term whose definition typically encompasses everything from social photo-sharing sites to blogs to professional networks, each bringing it's own very unique value proposition and set of challenges. Let's do what we ask our advertising partners to do and consider how each component of social media works for different types of businesses, and rather than take a one-size-fits all approaches to the space let's all work on understanding how each piece fits into the bigger picture.

2) Let's learn from the past. Back in the early-to-mid nineties, many of us in this space were asking ourselves the same question on a related topic: how do we convince traditional marketers that online marketing is a viable channel? In our haste to find an answer, we quickly latched on to the poor measure of click-thru rates, and it took years of work and lots of research (which was actually a very positive outcome) to help our marketing partners realize the value that lived beyond that metric. Let's continue to counsel our marketing partners on the importance of spending time understanding social media and investing in programs that will help them learn about the space, but let's not collectively rush to a poorly-considered value proposition that may help us with short-term gains but cripple us over the long term.

I will say I'm glad I'm in a space that has so many smart people thinking through how to understand and communicate the value of what will certainly be a critical marketing strategy for many businesses.

Cheers,
Steve

posted March 2, 2008

The agency is not the problem...it is the people within the agency that are the issue... Frankly, I think Harald Anderson (below, about six answers prior to my response) is spot-on. Social networking sites, and strategies that embrace viral, event-based an/or guerilla marketing, are different ways to achieve one simple outcome: engagement. If buying a billboard works, great. If buying an ad on the Super Bowl engages your marketplace (well, probably not, but let's say it could) then terrific. Who are you seeking to engage, and how do you fire them up emotionally?
Traditional agency processes work, to a point. They can certainly be measured. The uber-contemporary approaches may also deliver measurable results (question: do those purveyors of uncharted marketing design know their own metrics?). As newer thoughts on the topic are refined, and the expense:benefit becomes more precise, you will see these techniques gain acceptance on a broader scale. By then, however, there will be nano-technology that has already supplanted the digital age...
That is the beauty of evolution...

posted March 2, 2008

I believe that Anthony Martinez rightly points out that the oppty is in the fragmentation, not in cobbling together mass-like audiences from it without context.

Niche publishers need a campaign strategy in a box and an api to the creative assets so we can integrate commercial messaging meaningfully.

The rise of the network is really just the old agency structure crumbling as they fill that gap -- and gobble 2x or 3x of the traditional 15% of spend model. Media and distribution costs have declined rapidly but good ideas and execution are at a premium.

Links:

• http://gawker.com/advertising

posted March 3, 2008

The problem is that traditional agencies are sometimes reactive in their approach and many times resistent to change.

They've gone decades as print/tv/radio "experts" and just recently grasped the concept of "oh, yes mr. client, we can build your website and market it too." They've been forced to face the elephant in the room - that being the World Wide Web.

Throw social media into the mix and now these agencies are scratching their heads saying "what kind of media?"

This will be another aspect of an agency business that they will eventually tackle, but unfortunately, not until they are asked to.

posted March 3, 2008

Hey G- I go through this all the time with clients, and agencies in particular, and the one thing that they both seem to understand are statistics. I tailor every presentation/pitch to the client's needs and pull up specific stats that help explain and "justify" the need to move towards Social Media and WOM. There are so many great resources on the Web (WOMMA, for one is excellent, Forrester Research also) to pull from.

Educating the corporate heads will help to get the concept trickled down to the rest of the executive chain of command-for they won't move unless they know their bosses will approve it. Change is scary for many of them- and the fear of the unknown is something they shy away from often. Show them, teach them, but most of all, educate them-in the same way they we as Web 2.0 marketers learned about the technology and it's positive effects on change, relationships, and networking. For those in the music/entertainment world- read Seth Grodin's blog from a few days ago...it's brilliant. Best-

Greg Lee
Imagine Nation
Los Angeles

posted March 4, 2008

After the first hugely successful campaign using social media. Also, prior to any company investing significant resources for such a campaign, the mediums for delivery must be accepted by a larger cross section of the populous. The opportunities of social media and marketing carry the stigma of niche markets.

posted March 4, 2008

Hi Raj,

I think traditional agencies are not sitting on their hands on this issue. Social media and the push towards it is being asked for by all clients no matter what their size. You would have to be in a coma to not at least be engaging your client/agency in the discussion. Just like the arrival of TV, Direct, Sales Promotion, and Internet, social media will be digested by smart people, whether inside the company, or like yourself, outside the company and sourced back into the firm.

Providing integrated solutions to clients is the life blood of traditional agencies, and this is even more true today as they fight to find a differentiator against boutiques of one discipline or another. Getting into the social media debate is critical for their survival, as it is just another opportunity to deliver, and importantly receive, content for their brands/clients.

In short I do not think the value of social media is lost on the good traditional agencies.

Regards,

Don Norris

posted March 5, 2008

I'm sad to see all the ad agency bashers out there thinking folks in the ad community only recommend solutions that involve a 15% media commission. Last I checked, the majority of media buying is now done by mega media buying firms, and most good agencies are on retainers or get paid for the creative (when they used to give it away for free.) So the notion that agencies only recommend ideas that fill their coffers is far from accurate.

To address your question, one should review the BrandWeek article that reported a survey of 60 marketers from France, UK and US that traditional agencies "don't get it." 60 marketers? From 3 countries. On 2 continents. oh really? Is this truly a reliable sample? Is this enough to say it is a global problem?

As for what would it take to have traditional agencies understand the value... me thinks they do. Didn't you receive a career builder monkey e-mail? Don't you have a Emerald Nuts Robert Goulet cell phone ring tone? Haven't you seen the Allstate Lifehouse "From Where You Are" single on YouTube?

More and more agencies are trying to get their clients to embrace social media. But contrary to your article, the majority of the resistance really comes from the client side.

What will it take to change this? It takes courage on the client side to try a new media channel and be willing to fail. It takes patience (time) on the client side to allow the efforts to find and reach its audience. It takes a budget to create original content, change and add to it as necessary - plus, expenses to (uh-oh, here comes the traditional media approach) promote these executions.

Ad agencies have a history of being the innovators in new media. It was ad agencies that created "soap operas" (sponsored by laundry detergent companies). It was ad agencies that created radio variety show hours (sponsored by cigarettes, car and gasoline companies). Ad agencies will think out of the box when asked to. On most occasions, they don't it even if you don't. But despite all the recommendations, the guy who holds the purse strings is the one in control.

The biggest obstacle is being able to track the ROI - return on investment. Since most companies are pressured to show immediate returns to investors, most are unwilling to gamble on unproven technology.

It will probably take one risk-taking company who hits a home-run in this media to get others to take notice and try. Then, maybe, other companies will try to create original work for this new media instead of adapting current campaigns into this space.

Companies like TNS can probably help with the tracking - but the biggest challenge is cost per acquisition. As much as print media is fractured, the internet is even more so. If you could be to reach the influencers and early adopters, it would be worth your money. But if we knew how to do this already, we wouldn't be having this conversation.

Me thinks traditional agencies DO understand the value of social media. The day clients like FedEx and Suzuki put out request for proposals for this assignment is the day they'll see solutions that go beyond the norm.

Links:

• http://www.brandweek.com/bw/news/recent_display.jsp?vnu_content_id=10037175...

posted March 5, 2008

Some great points, and in sum, I think you've already answered your own question in pointing out that this is an "intelligence" type of execution.

Quite simply, social marketing has not yet figured out its own economics or accountability, two things traditional agencies and their respective clientele must be able to control and profit from.

That said, if agencies and brands learned the landscape and became "influencers" themselves, they could incorporate their newly knowledge and experience into their outreach strategies. The agencies could get paid for this intellectual capital, and brands could eventually monetize their digital offerings (after, of course, brand awareness was built up over social networks). They would also need to learn how the technology components work together and understand open source dynamics -- these days, if you can own or build the platforms, you can create gateways to attract eyeballs.

The irony in all of this is that agencies and brands alike seem to think this is purely a young person's game. Just look at the demos that are the most active new user groups online -- at-home moms and men 40+ -- and you'll realize that these are all moving targets that need to be spoken to and connected with at all times and in all places.

So, when agencies and brands realize that demographics are based more on interest categories than they are age or economics, then social marketing will finally show its true value.

posted March 6, 2008

I have worked for several agencies, one look at my bio will bear that out, more than not, resisted employing emerging communication tactics.

One of the biggest reasons why they will NEVER adopt these practices is due to the fact that they cannot charge their 1.765% mark-up like they do on traditional media outlets.

There's no money in social networking for traditional agencies, (although the client would flat out reap the rewards of increased brand awareness and revenue).

The best and foremost traditional agency that crossed the tipping point is Crispin, Porter Bogusky. Burger King, Volkswagen, and many other clients have gained from their relationship with these cats.

In fact, one of their largest departments in the New Media Department - in fact, that department is larger than most creative departments in traditional agencies.

Nope, not until believers like us, (benefit of the doubt), go to the client side and replace the nonbelievers who sit in the marketing director's seat, and demand their to utilize these social networking tactics traditional agencies will never change.

Frank is not a paid spokesperson for Crispin, Porter Bogusky and has no affiliation with them. Although would love to work for them. In the Boulder, Colorado office. In the creative department. As a writer or something.

posted March 7, 2008

Such a great question.
This really reminds me of the Geoffrey Moore book Crossing the Chasm dealing with the whole model of moving from the early adopter market to early majority. The final phase of the bell curve is the "Laggard". Moore indicates that more often than not, this group actually works to BLOCK involvement (development, purchase, adoption) in the "new model" for themselves or their clients. Given that model, would you then classify the traditional marketing companies as the Laggards? With the bell curve, this group tends to not be the vast majority of users, but in this situation, they definitely qualify as some of the most influential. So would that indicate that the first response to your question "when the new digital media firms acquire them" is actually a distinct possibility (regardless of the tongue-in-cheek manner of the posting;)?

Could it have been the inability of the dinosaurs to adapt that killed them off, or was it really due to smoking cigarettes behind the barn...

Anyone want to offer the traditional media firms a light?

posted March 7, 2008

I recorded a podcast entitled "Total Dollarized Production" which may lend some ideas of how marketers and agencies can self equip themselves to better measure and communicate the contribution and value of not just social media/marketing but also other types of online marketing.

For many this podcast may seem sophomoric but to some it may help provide a new (or old) way of thinking about the notion of communicating ROI.

Links:

• http://www.miechiels.com/podcasts/podcast-tdp.asp

posted March 7, 2008

Social media goes against the grain of everything that traditional marketers have been taught. This paradigm shift of marketing should really be taught at the university level now. At SES in Chicago I heard a fabulous keynote address from a professor at Northwestern that feels the same way.
The problem is that marketing has traditionally been a 1 way conversation. Marketers do some research and deliver campaigns based on what the demographic supposedly wants and then sit back to watch the profits (hopefully) pour in.
Social media takes the 1 way conversation and opens it up. Until marketers are able to listen to the demographic and adjust their campaign as necessary it will never work.
I work for a digoital agency that actually white labels our services for traditional firms. We do this so that the traditional guys can seem on point with the array of services they provide while not damaging the integrity of the relationship that have with established clientele. It's been a good relationship so far.

Links:

• http://www.poplabs.com

posted March 7, 2008