Hitviews Pro: The Four S's: Scared, Scared, Scared, Scared. Why Ad Agencies Have Nothing to Fear - Walter Sabo - MediaBizBloggers

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Last week at the Ad Club New York breakfast, many ad agency executives spoke about the future of their business. They all used the same word: SCARED. They are scared.

Why they are scared about the future and their business model is a mystery. Ad Agencies have nothing to fear.

Here are the four reasons they have nothing to be scared of: (The 4 S's, like the 4-A's).

1. Social says you're good. The director of Sales for Facebook was at the breakfast and he said, "We like the agency model." There, the future of social media says there is nothing to worry about.

2. Sacks of Money. All the media and production dollars still go through agencies. That's because clients trust you, respect you and are comfortable with you. No new transactional intermediary has a prayer in hell of replacing 100+ years of trust that has been secured by the Ad Agency industry.

While brands and PR firms may try experiment budgets to test new products, the big bucks remain in your media department computers. But you need to add a few more lines and invest in some additional formulas and you need to do it two years ago.

The new lines should be:
Social Medial
Online Video
Online Radio

The formulas used for buying those viable mediums must not be silly CPMs or meaningless Cost per clicks. When you trot out those formulas of antiquity it hurts your credibility as futurists. Those formulas do not encompass engagement, response notes, response videos, or "likes."

If you, correctly, demand engagement from your media buys then you must have a formula in place to reward that engagement. Establish the formulas, c'mon, spend a few bucks for real math and real research and then put those formulas in your computer.

3. Stunning Creative. But it doesn't have to be from you. It could be from the kid down the block who can make a video online and win more viewers tonight – TONIGHT – than you can buy on cable. There is no reason that your "shop" (how quaint, Mr. Draper) can't be the creative hot shop. You just don't have to create all of it in house.

But you can be the gatekeeper. Yes, you bring in outside vendors for many things such as film production. But you could establish a creative market place for everything. A bazaar of hot ideas all flowing through your agency and you may not have to have one of those creators on payroll. If you do that, then mean it. Welcome all vendors all the time. Charge for the work of establishing a creative market place.

Speaking of charging... STOP the hourly, % of creative and % of media. Clients hate that and don't trust it. Never trusted it, trust me. Charge a flat monthly fee that's established a year ahead.

Get off the pony. For some reason, "award winning" creative started to have great cache. That was a tragedy. It meant that your creative team became focused on making slicker and slicker :30's and thought less and less of selling product. FORBID entry of any of your agency's work to any awards competition.

4. Sell Stuff. Having sat through many agency "reviews" it was always surprising that none of the pitches ever showed a slide titled, "Increase in Sales." They just showed, "Awards won." The role of the ad agency will continue to be vital, important and essential to major brands if it is focused on the "sell stuff" slide.

That means, again, the metrics measures have to change. "Post clearance" reports, "audience metrics" and "Intent to buy studies" tell you virtually nothing. All purchases are 90% emotion based. The metrics of emotion are what you want your lab to master and offer clients. The first agency to do that will be the agency of the future.

Walter Sabo is the Founder and Creator of the business concept. He is an experienced leader of new organizations and is currently CEO of Hitviews. Walter can be reached at walter@hitviews.com.

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