The last few years we’ve seen a growing interest on “design” and “design thinking” although we don’t see MBA school rushing to teach using “design thinking” application in business problem solving. Design influence has not only infiltrate B-schools, it has attracted the interest of ad agencies and branding agencies. It is a marketer’s dream to have products that do not require advertising, the balance of form and function itself that consumers recognize instantly, that's will never happen of it does it is rare. Even Apple needs to advertise so adverting is not going away. Except it's very nature has changed. Marketing, in the form of logos, packaging, advertising, and the ever-broadening fuzzy activities known as branding, has attained the status of necessary evil to build brands.
We’re seeing some branding agencies (and adv agencies) are trying to get into products, some are doing a more decent jobs than others. There are some ex-agency creative folks carrying the banner of Corporate Social Responsibility consultants and all they can think of is the obvious. I think branding firm and even ad firm (with a few exceptions) are not right for the job, the same reasons why you won’t hire your lawyer to fix your customer service problems or your accountants to fix your technology problems. Mark Read (WPP corporate) reminded me that some 20 years back ad agency (Bates) helped De Beers to come up with many of the innovation. They pretty much invented the ritual and came up with phrase 'a diamond is forever' and that people have used diamond engagement rings ever since. But when the last time we’ve seen an innovation came from an agency?
Can adv agencies design great products and/or experiences? You would think so? Over the years they have narrowed their skills (rather than broadening) and their core capabilities were reduced to doing the following three things 1/ finding a unique way to positioning a products within its category 2/adjustments of minutia to affect the consumers’ perception of the brand 3/ maximize repetitive exposure and extend reach. Innovation is not a core capability. Deep customer insight is not a core capability (over reliance of traditional research is the problem). Customer engagement is not a core capability (although they refer customer engagement as engaging through a 30sec TVC). It makes you wonder whether a new breed innovation companies will eventually settle into the realm of new product innovation and brand / communication innovation or even push into the space to deliver business model innovation.
The next big issue is “authenticity”? Today this word carries extra meanings thanks to the Internet. This is not something one can “buy” with big ad dollars. This is truly how brand differentiates and is strongly associated with trust, not just brands but also on a corporate level. Adv agencies (including interactive and direct mkt agencies) fundamentally operate differently and are not really good candidates for innovation and design explorations.
Next year will be a particular difficult year for agencies, WPP is making smart moves to buy Taylor Nelson Sofres for £1.1 billion ($1.95 billion), in a deal that will reduce WPP's reliance on advertising revenue ahead of an expected serious downturn. WPP is the best managed companies among all holding companies and Sir Martin Sorrell has been talking for more than a years about steering his company away from the volatile ad market into research and other marketing fields with more predictable profits. This is the first big move. And a smart one.
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