Monday, July 12, 2010

The Future of Advertising

by John Winsor

The traditional advertising model is broken, argues John Winsor of new-model agency Victors & Spoils. It's time for the old guard to wake up

"The question for creative agencies is whether they can wake up, react to what's going on, engage the crowd, and make themselves a part of the new reality."

I posed this teaser in a article published just over a year ago. At the time, the question was purely rhetorical. But in the ensuing conversations it quickly became obvious that the answer was a resounding "NO."

Realizing this inspired me to quit my job as executive director of strategy and product innovation at the advertising agency Crispin, Porter + Bogusky to co-found Victors & Spoils, an advertising agency based on crowdsourcing principles. Now I find myself at the center of the debate about the future of advertising, design, and marketing—even the future of work itself.

Seven months in, we've had the opportunity to work on everything from TV and radio to brand strategy, including digital and social media, product design, service design, and graphic design. We've done projects with clients including Dish Network (DISH), General Mills (GIS), and Virgin, with confidential clients in financial services, quick-service restaurants, and packaged consumer goods. As we continue to explore uncharted territory, we're learning every day. Here are some of the most important insights we've gleaned to date:

The Model Is Broken

Advertising is all about relationships, and at the heart of the client/agency relationship is trust. That trust has been eroded by a lack of transparency and, often, resistance to change. Over the past few months, I've spent a lot of time with the chief marketing officers of Fortune 500 companies. The theme is consistent. They tell me stories of being charged $10,000 per second of video editing for clips to go on YouTube, $1,000 for a single foamcore presentation board, and $25,000 for event banners; an unwillingness to collaborate; and myriad indirect charges for parties and travel.

Somewhere along the way, the big-agency business became a lifestyle. But clients, who want the best creative work, don't want to pay for it anymore. And they're figuring out that they don't have to. Smart agencies need to adapt their business models and fast, or they won't have the opportunity to rebuild these relationships.

The World's Your Creative Department

The old system of agencies employing a few creative teams to come up with agenda-setting ideas simply doesn't make sense in a digital era where ideas can and should come from anywhere. Digital tools can be used to tap into the wider world of creativity, and can do so with a lean infrastructure. It's a win for the client, who gets access to a diversity of ideas. It's a win for creative talent, who aren't bound to work on the particular accounts held by their agency.

Pick the Right Crowd

Mass collaboration, co-creation, and crowdsourcing are becoming increasingly important vehicles for clients looking to engage the voices of consumers with brands. At last count there were more than 100 crowdsourcing platforms available for some kind of design or marketing work. Picking the right one is key. There are many factors to consider, from who is in a particular crowd to how talent is paid or how intellectual property is handled. Many times success will come from breaking a project into smaller pieces and tapping different crowds for the various different elements. In general, it seems it's best to combine small private crowds (these days known as "expertsourcing"), where everyone working on the project signs a nondisclosure agreement, with bigger, more public crowds (crowdsourcing) to generate more ideas.

Stay Involved

In any management role, the key is to be actively involved. It's even more critical when directing a digitally distributed workforce. These days, people no longer have to move to the right city or work for the right company to participate. They can work where they want, with whom they want, and how they want. When harnessing the crowd for creative work, every participant deserves feedback and direction. That's easier said than done. But it's a big reason people get involved—and managing both expectations and rewards is the only way to see this type of business into the long term.

Help Clients Face the Challenge of Innovation

Clients need solutions that allow their brands to engage with their consumers and that get the results they need to move their marketing strategy forward. However, crowdsourcing platforms have proven unruly for many clients. In a recent corporate identity project we ran, we received 3,300 designs. The number of possible solutions created and the effort to keep things on strategy for a brand can be overwhelming. Curation and creative direction is the key to helping clients innovate.

A year after first asking the question above, the answer is still "No." Too many agencies still are not making themselves an integral part of the new reality. As the world becomes more digitally connected, we should celebrate the fact that marketing and advertising ideas are coming from everywhere. For me, it's inspiring to see the radical evolution of an industry and watch individuals take control of a once-closed society made up of Mad Men. The new world can be scary for people who still work in the old model. We get that. Change is scary. But it's also a reality.

John Winsor is author of Spark: Be more Innovative through Co-Creation and Beyond the Brand: Why Engaging the Right Customers is Essential to Winning in Business. The former executive director of strategy and product innovation at Crispin, Porter & Bogusky, he co-founded Victors & Spoils in 2009.
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