The Problem with Ad Agencies

3 minute read

I admit that I am no friend of advertising agencies, I just do not understand how they make so much money for basically copying other peoples ideas. However I do understand a place for these companies in a world full of corporate laziness.

Yesterday in the Fairfax’s Boss Magazine (an excellent addition to the Financial Review) I read with dred an article on where companies spend their marketing budgets.

The article was called the “Tipping Point”, a name which Malcolm Gladwell (Author of the Best Selling book The Tipping Point) has made famous and is now used by just about everyone trying to sell just about anything.

The feature article pointed to Print as the most popular form of advertising from sources surveyed (they do not tell you their sources and no surprise from a predominantly print company), events came in at number two followed by broadcast advertising.

In my humble Broadcast advertising is far and away the best form of advertising but is simply out of cost reach for 90% of the business community. This will change in the future when TV advertising will be able to be targeted at particular suburbs through digital TV (or as soon as someone works out how to do it)

Why is it that when you speak to the majority of ad agencies they always push you to Print and TV advertising?

Well there are three reasons and they are all connected. The first reason is that ad agencies already know how to make money out of you in relation to traditional advertising and have relatively good experience in these mediums. They simply think, create and schedule. The second reason is the majority of ad agencies do not understand the Internet and how to make the most of its power. Thirdly they have no idea how to make their money and run, because the Internet is continually evolving and needs constant attention.

The article has so many holes in it, I could go on for hours, but what I want all agencies to come away with from this short message, is that you need to ask questions of your ad agencies, if they do not understand your market (which more and more is the Internet) then best move on to someone who does (or move is in house).

Ad Agencies have a place in advertising, but it should be a place set by you, do not let them dictate terms. It is clear from this article that they still live in the old world and that a new breed of ad agencies needs to be born, one with experience in all mediums.

It is also time for newspapers to understand that every year their market is shrinking and if you read my article on the ACCC’s Chairman Graeme Samuel, you will see that the majority of young people 18-34 do not read newspapers at all.

They are your future market and it is time to start formulating strategies on making money from them.

So my latest Dumb and Dumber award goes to advertising agencies across Australia that are Internet clueless!

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