Home
The Future Isn’t What It Used to Be
By Mike Carlton

Generals always prepare for the last war
Consumers are not being led. They, collectively, are the leaders.

Back and Forth

It was 1864. The American Civil War had been dragging on for almost four years. The carnage kept mounting. With no end in sight.

The generals of both sides, but especially Robert E. Lee of the South, staged brilliant battles. Sometimes the South won. Sometimes the North won. And after each battle both armies withdrew to rebuild their strength. Only to fight each other again later. With more death and more destruction.

West Point Doctrine

Most of the generals on both sides were graduates of The United States Military Academy at West Point. Thus both sides followed the established doctrine they had learned together many years earlier.

Doctrines that were well executed. Often textbook perfect. But just weren’t winning the war. And so the ugly conflict dragged on.

An Improbable Choice

Then, almost in despair, President Lincoln tapped an unlikely officer, Ulysses S. Grant, to head the Northern forces. While Grant was also from West Point, he had ranked well down in his class. The best students considered him to be mediocre and lackluster. Somehow out of place.

Grant was not part of the military elite. He was thought to be crude and unsophisticated. And that he drank too much. He was generally shunned by the officer corps “in crowd.”

After West Point he dropped out of the army to try a couple of civilian pursuits. None were successful. It looked like his life was becoming a series of failures. So when the war started he joined the Northern Army.

The Last War

There is an old saying that generals always prepare for the last war. And it appeared that most of the Southern and Northern generals were doing just that. With disappointing results.

Grant was different. While he fully grasped traditional military doctrine he also understood that it was based on the last war. Not the current one.

He called upon his intuition, which he lubricated with good bourbon, and developed a new, and highly effective strategic approach. He realized that just winning battles was not enough. In this new environment the focus must be on winning the war.

So rather than breaking off contact after each battle, which was the old doctrine, he never let up on Lee. Grant maintained unrelenting pressure on his adversary. Never giving Lee’s army time to recuperate. The results were dramatic.

From that point on it was only a matter of months until Lee surrendered his exhausted army at Appomattox Court House. The war was over.

The Meaning of Appomattox

The lesson was simple. All the other generals were fighting using doctrines from the last war. They were looking backward. And it wasn’t working. Grant realized that the current war was different. And strategies needed to be different, too.

Grant was not so anchored in the past that he could not envision a different future. He was looking forward. He had the courage and intuition to discover a better way.

What War Are You Preparing For?

It seems that many of today’s advertising agency leaders are not unlike those Civil War generals. It looks like they are preparing their agencies for the last economic recovery. Not accepting that the next recovery may be quite different.

The agency business has a rich tradition. And a history of successful doctrines. The prevailing business model has been around for a long time. It reached full flower of maturity in the golden years of the 1960s and 1970s.

Yet there is widespread agreement that it is a business model that is rapidly losing its relevance in today’s marketplace. Bob Garfield calls it Apocalypse Now. And a growing chorus of other seers lament the shifting sands the agency business has been built on. Times are uncertain. And trying.

A Seismic Shift

Time Magazine says that our society is undergoing a seismic shift. Like two giant tectonic plates grinding together in reshaping the very ground we stand on.

They say it is the sort of thing that only happens very infrequently – like maybe once in a lifetime. And all this seems to be validated by the sudden collapse of venerable corporations and financial institutions and the personal angst each of us feels as we try to make sense of the turmoil around us.

Clearly we are at a point in time when things will never be quite the same again for our industry. The accepted business model rules for advertising agencies are in question. The only thing for sure is that the future will not be like the past.

The Good Old Days

Yet with all the evidence around us many agency leaders look like those Civil War generals. Looking back to find guidance. Knowing intellectually that the environment has irrevocably changed. And is calling for new thinking. New solutions. But are held captive by deeply ingrained doctrines of the past.

If so, it’s time to get over it. And move on. The good old days will never come back. That chapter is closed forever. But that doesn’t mean that the future is all grim. Contrary to pessimistic voices, it can be exceedingly bright indeed.

The important thing is to realize that we can no longer predict the future based on the realities of the past.

That won’t work any more. The future just isn’t what it used to be. It will be different. And we will need to discover what those differences will be and how to turn them to our advantage.

Uncharted Waters

Recently Mike Duke the new CEO of Walmart was interviewed by NBC on how the recession is impacting Walmart’s 140 million customers. The information he shared is fascinating.

Duke went into considerable detail about the dramatic buying pattern shifts they are seeing. What consumers are buying. And when. And what they are not buying. The most striking thing is that the emerging consumer buying patterns for this recession are different from those in the past.

Historical notions are being discarded. Behavioral patterns for Walmart customers (who represent almost half of the US population) are moving in ways never witnessed before. And Walmart is watching their customers closely and rapidly adapting their business strategies and tactics to those new behaviors.

Walmart is clearly in tune, on a minute by minute basis, with the changing behaviors of their customers. They are looking ahead, not behind.

Perhaps that is why Walmart is doing so well in this record-breaking downturn.

Finding Their Own Way

The good news is that through the economic turmoil, the spirit and independence of the consumer is alive and well. Each individual is working his own way through the uncertainty and making what he believes are the right decisions for himself. Consumers are not being led. They, collectively, are the leaders.

The decisions they are making now are deeply rooted in their belief on what the future may hold. And not so much on what their past experience was.

For marketers the implications of this are huge.

Predictability

Much of contemporary marketing, and the advertising that supports it, is based on historic consumer behavior. We knew how they behaved in the past. We knew what stimulus would bring what response. This was accepted fact. A lot of what marketers did was based on tried and true beliefs.

Best practice was to use historic data about consumer behavior as a foundation for forward looking programs. That approach just made common sense.

But if the magnitude of the economic turmoil has triggered significant strategic shifts in consumer behavior does that approach make as much sense as it used to? Probably not!

What We Don’t Know

No one knows just where the consumer is headed. And they in fact don’t know themselves. They are picking their way through the economic mess. And where they come out is yet to be determined.

But we do know that they will find their own solution. And that the smartest marketers will be those most sensitive and most responsive to changing consumer behaviors.

And the best way to know what those behaviors will be is to get close to consumers and to step up observation of them.

As an aside, at this point in time, observing consumers trumps asking consumers. None of us knows what we don’t know. And they don’t know just where things will all shake out. So they certainly can’t be reliable predictors.

Essentially, consumers have embarked on a lifestyle-changing journey. Smart marketers will be closely tagging along for the ride.

Is This an Agency Opportunity?

Certainly the shifts in consumer behavior argue strongly for marketers to revisit long-held brand positioning views. And communications strategy thinking.

From the industry’s very beginning, agencies have been instrumental in providing marketers with strategic brand leadership. Yet today, it appears that many marketers view agencies primarily as providers of communications stuff.

And making stuff is how most agencies get paid.

If agencies, as stuff providers, have drifted away from their strategic leadership role with clients, perhaps this is a good time to take a step back and review some enduring agency basics, and their application to opportunities ahead.

Agencies have some very fundamental strengths:

1. Agencies usually have the ability to empathize with the consumer’s economic and psychic interests better than other service providers.

2. Agencies also have a keen appreciation for branding and what the brand experience means for the consumer and how that relates to the marketer.

3. Agencies have (or have had) strong, enduring relationships with marketers.

4. Agencies can be good aggregators of diverse crafts and tools – if they understand the appropriate application of those disciplines.

5. Agencies have the most diverse talent base among all the marketing service providers.

These are very powerful, and rather exclusive, strengths. They go to the core of how to most effectively build lasting connections with the consumer. And the consumer’s behavioral patterns.

While creating and placing advertising is an important component of many solutions, it is exactly that – just a component.

With all the uncertainty about future consumer behavior, agencies have the opportunity of moving back to the position they traditionally enjoyed; that of being the custodian of the client’s customer’s brand perceptions and behaviors.

How?

Here are some thoughts you might consider:

Get Even Closer to the Consumer
Now, more than ever, understanding evolving consumer thinking and behavior is crucial. For without it the chances for on-target communications aren’t good. In fact, right now many marketers may be basing forward looking decisions on past consumer perceptions and behaviors, which are now outdated.

The current climate calls for increased observation of just how consumers are adapting their behaviors toward client products. These shifts can be dramatic or quite subtle. Yet understanding them is vital.

This calls for rethinking how the agency’s planning capabilities are deployed.

Too often, planners are kind of an ivory tower afterthought. When in this new paradigm, they should be at the forefront of the entire agency’s effort. Serious rethinking of using this powerful asset is in order. For when the agency has a clear map of the consumer’s evolving psyche and her various mental receptors, then the rest becomes much easier.

Master the Other Crafts
This is the toughest part. In this new environment the way in which the consumer is reached and engaged is just as important as the marketer’s message. This requires not only understanding new media but developing confident fluency in all of them.

Yet many agencies treat new media only superficially while paying most attention to the traditional cash cow of print and broadcast.

Before the agency can guide the harmonious aggregation of various tools and crafts, it must understand each of their capabilities and deliverables.

Now this is easier said than done. It will take time and money to become credibly proficient in these new crafts. It will take new people from these various disciplines. It will take true mind-expansion of traditional agency craft experts.

And most of all, it will take dedicated and committed leadership.

Holistic Ideas Only
Great ideas that only work in 30 second spots or colorful ads are not enough. The ideas that will drive the success of forward looking agencies must be able to work using all kinds of tools, and in all kinds of venues. They must be truly media agnostic. Anything less is a sham.

This means nurturing the understandings within agency talent that permit idea development that transcends traditional advertising, and speaks broadly to the consumer through all of their available receptors.

Orchestrate the Outcome
With the variety of ways available to touch today’s consumer, no one – not even the biggest holding companies – have the skills to do all the things necessary. Other providers with specialized expertise are needed. Collegial, collaborative leadership of the solution team is required.

Someone has to orchestrate bringing all of this together. And remember, it is something that only the most sophisticated marketers have much skill in.

Examine Your Business Model
Today, most agencies make their serious money from TV spots and print ads.

Becoming a true strategist of the client’s brand and guiding the collaborative process of diverse outside talent is out on the periphery of many agencies current business model. And, if they do act as the brand leader, work in that area usually represents only a small portion of their total revenue.

Today’s most commonly used agency business model rewards the production of stuff, not strategic leadership. TV spots and other traditional work as the economic backbone of the agency business will just not work much longer. What McKinsey called the “Golden Age” is over.

A big idea for a multi-dimensional solution has great value to the marketer. Yet there is no standard way of directly rewarding an agency for this value.

Thus, new business models must be created. Business models that reward the agency for the economic value of changing consumer behaviors.

Another Grant

Clutching onto agency doctrines of the past is the road to nowhere.

Perhaps it is time to follow Grant’s example. To kick back, possibly with some good bourbon, and put your intuition seriously to work. Synchronize your thoughts and your agency with the interests of the consumer. And then courageously envision what isn’t yet but just might be.

Who knows, you may discover a new and better way to lead your agency successfully into a different, exciting and highly rewarding future.


© Carlton Associates Inc.

Web: www.CarltonAssociatesInc.com
Site by Elliance