Sharpe Partners: Interactive Agency NY

There can be little doubt that traditional advertising agencies are struggling to lessen the Web’s impact on their business. Yet, despite their best efforts they continue to see their budgets re-allocated to Web programs managed by new “interactive” competitors. Equally troubling are Clients’ demands that “they figure it out” with no increase in fee. Man-hours are lost to stringing together “banner buys” and adding 8 point type URLs to once-pristine print ads.

Could it be the Agencies focus on the wrong things when they look at the Web? Maybe they are trying too hard to force the Web fit into their structures instead of creating new models better suited to the needs of a now rapidly and radically evolving marketing landscape.

The Top 3 Agency Web Questions

1. When will Web advertising be as measurable as print and TV advertising?
   Before P&G’s FAST Summit agencies had been driving sites to provide quantifiable data on their site visitors. Discrepancies between the various third party services, as well as between the sites and advertisers, generated confusion and more importantly mistrust. But, as services such as NetRatings (recently merged with Nielsen) began to deliver complex measurement models that were roughly analogous to ABC Reports and Nielsen, it became apparent that though the Web may have a mass audience, individual sites could not as efficiently deliver the millions of eyeballs offered up by a 30 minute television program. Bad news as click-through rates tumbled to below 1.5% and media planners sought confirmation that their “banner buy” would DELIVER.

   It may be just more difficult for planners to effectively buy the Web. They may need to re-think what they are buying: impressions, click-throughs or some yet unidentified measurement of involvement. And they will certainly need to spend more time buying it.

2. When can we run commercials on the Web?
   For an advertising Agency the Holy Grail of Web advertising is real (full screen, full speed) video, or the ability to migrate their television commercials to the Web.
   Even now many sites offer the option to download commercials, both TV and radio, with a fair number of visitors (20%-30%) taking advantage of this option.
   The commercial on-site goal is born out of a real belief in the power of well-made commercials to build Brands, awareness and less clearly sales, and of course the need to return commercials to their rightful place in Client’s hearts and get those software coders out of there.
3. Do we build an in-house competency or partner with an Interactive Agency?
   Can an Agency continue to do business as usual as long as they bring someone along who gets this Web thing? The partner route limits the financial risk, but gives up control, the in-house option raises the need for investment. The partner route is also based on the assumption that the Web problem can be framed solely in production terms, not as a media issue, which it clearly is. Few agencies who do partner, will give up control of the media budgets. Even more problematic is dividing up the Client relationship. Who is on top and who has the energy to stay there?

Three Questions Agencies Need To Ask

1. How will the Web impact our revenue models, particularly media?
   What will the role of the Agency be in a media environment that shifts from the buying and selling of “units” to the management of complex sponsorship transactions.
   How do you shift operationally from numerical calculation to relationship management.
   More difficult still what happens when this model extends over to another home appliance, the TV.
   Can media plans move from straight horizontal lines to vertical steps that show has messages interlock across media all leading the customer to sale?
2. What will our product be when the Web can do what TV does and TV can do…?
   Can Agencies limit themselves to traditional broadcast commercials and print?.
   If 26% of households with computers have their TV and computer on simultaneously (Nielsen) how do you get consumers’ attention, emotion, and motivate them to buy.
   Commercials are the sexiest of all Agency products. A great commercial can define an Agency’s identity.
   Imagining a future where they are fundamentally different, not just today’s :30 with a small icon added as a Web link, should be a project in every creative department on Madison Avenue.
3. What kind of Agency is needed to meet our Client’s marketing objectives BOTH offline and online?
   As the difference between the on and offline consumer melts how will agencies meet their Client’s needs.
   What are the objectives of Communication Programs? Send them to the Web site (like the window of every Gap)?
   Agencies must translate their expertise in marketing, understanding and motivating the consumer into interlocking media plans.
   They must learn to manage the consumer-Brand relationships in real time, not just prime time.

They must learn to ask the right questions, before they can hope to find the right answers.

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