Is Advertising Art? Yes and No. Thoughts on 2017.

Here are some thoughts about the business of advertising that I will explore in 2017. A key one for me is thinking about the value-oriented question: “is advertising art” or is “advertising science” and how the recent move to data-love effects what you are selling to your agency’s current and future clients.

What I Think We I Will Be Talking About This Year

Is advertising art or science? Well, it used to be very much art. Today, it has become, in my estimation, too scientific. I find that it is getting harder to find the big advertising ideas (name five from 2016). You know, the ideas that resonate, hit the emotions, get talked about. These big, brand-building, sales-generating “ideas” seem to be lost in a world of ever-evolving tech / digital platforms and data mining.

Sure, this could simply be ‘good-old-days ad veteran speak’. But, no… While I grew up on mega-buck TV shoots, I also moved into the digital world in 1996 (founding NJ.com then ActiveBuddy) and ran a ‘digital’ agency in Oregon –  so, I’m not too-stuck-on-good-old-days after all. I just miss the time when people stood around the company water fountain and talked about advertising.

Today… we are simply not spending enough time thinking about the BIG ideas that drive humans to pay attention and to act (to give a shit) and then to want to do the action you, as a marketer, want them to do. We spend too much time talking about the technology and targeting that puts boring ad ideas in front of people. Boring.

Does the technology work? Facebook advertising fibbing / bullshit – again and again (the BIG 2016 story). And then there is ad fraud. Billions? Wasted? Clients have woken up. This should be interesting.

Workload will load up. More and more advertising platforms will lead to more and more agency staff work. You are in a tough position… more work and clients that want to take a bite out of your profits. Plus, employee burn out.

The business of advertising sucks (Part I). I talk with dozens of agencies. Most, even shops up to 200 people (I won’t even get into the networks) are barely making it. Why? Well, most do not really know what business they are in. They like making ‘ads’ and using the latest ad tech. But, they do not know how to make money. Most, the vast majority of agencies, do not even have a business plan that spells out the path to success. Please, start with a plan. And, given the pace of change, review the plan every year.

Ultimate bottomline: Most agencies do not have a marketing plan.

ADHD. In addition to not having a business plan, many agencies do not run a consistent marketing program. Many (most agencies) do not run their sales plan with any consistency. They: Start – Stop – Start – Stop. They clearly have some form of attention deficit problem. Agency leaders have to treat business development like they treat an agency client. Do not take your eyes off the new business ball.

The business of advertising sucks (Part II.)  I was blessed during the first half of my advertising career. We got paid well by the 15% commission system. This ended for me about 1989 when a new CMO at my Northwest Airlines client wanted to reduce that to 8%. Get this, this cut took us from $9 million in revenue and $3 million in profits to about $4.5 million in revenue. All of a sudden we were operating at a loss – if we did not cut back on our service. We didn’t and it didn’t matter because, of course, the new CMO wanted to hand the account to another (read: his) new agency. OK, it’s 2016 and you guys are now charging by the hour. I witnessed this problem at my Oregon agency. The problem? Not so much that we got paid less. But… the problem of getting paid by labor hours for creative services. The value my agency provided clients far exceeded the hourly rates we could provide in an industry that had become based on low costs. There was always another agency that would work for a lower hourly rate.

Ready? Sell your agency? Sorry, most owners will never be able to sell their agency. Ever.

Why? Most agency owners are not building a business for sale. That means that they do not have a product or service that someone else will want and want to pay big bucks for. You can build a valuable agency. But, you have to make the goal of building value part of your plan. A part of your business plan. To get there, figure out what kind of agencies are getting bought (most sales are local) and have the type of agency that another wants to buy.

Process equals success. Having a clear, well-managed agency process is critical. Agencies have to find as many repeatable systems as possible. Otherwise, you are doomed to the world of over-work and low-margins. Read this: Advertising Agency Process and Profitability. It is long. It is based on how my agency built a system for profitability. An agency I was able to sell.

There is much more. But, I have to go now. Adios and —– Feilz Ano Nuevo!!!

OK, Back To The Art Of Advertising

One more thought. You are in the advertising industry. This means that you have to connect with hearts and minds in order to cause the action you seek. This means that a form of art is involved.

Sure you have to use advertising technology to get the word out (that’s all that overwhelming stuff in the Lumascape at the left). But, you will not get the results you want until you spend some time making advertising art that connects, inspires and informs.

Soooooo, as a New Year’s gift, I give you a very brief definition of art. Think of this Richard Serra video the next time you crawl into the ad tech wormhole. Who is Richard Serra? From Gagosian, his dealer…

“Richard Serra is one of the most significant artists of his generation. He has produced large-scale, site-specific sculptures for architectural, urban, and landscape settings spanning the globe, from Iceland to New Zealand.”

Richard Serra – Why Make Art?