Are ad agencies becoming commoditised?

A fascinating debate took place on Twitter last night, initiated and facilitated by the team at Adlip, on the subject of whether "agency services have become mere commodities".

It was short, sweet and full of as much insight as one can get across in 140 characters. (Read the full #Adlip Talk Twitter TL here)

The general answer, was "no, well, maybe, but.." It was an industry view, and missing the voice of the one person who really can answer: the marketer him or her self.

Of course there is no Yes or No answer to this question. Frankly, a lot depends on the agency's abilities and on the marketer's skills. But the question that does have a simple answer is "has the business changed"? Yes it has. There are a myriad options available to marketers - but that in itself is not necessarily a good thing for them.

What is happening, especially given South Africa's small market, is that each agency wants to capture as much of the pie as possible, so that many agencies are trying to do all things for all people.

But if we all do the same thing, we do become commodities, and it does become a case of "well, I can get exactly the same thing from those guys, for cheaper. Cool."

Agencies spend their days crafting strategic positioning for clients, marking competitive territory and helping clients defend it. When it comes to their own, they are the cobblers kids with no shoes!

There is even a comic book on it! 

There is no marked differentiation among the major players. The ones that do have a differentiated spot soon begin looking over at the others and wanting to be more like them. The reason that there is commoditisation is that the clients perceive all agencies to look the same, and do the same.

From Auditing Your Agency's Business Model - see below

To makes sense of it all, I came across this slide show by the hugely insightful Tim William, on how to really decide what your agency is and does, for whom, in which channels. It's called Auditing Your Agency's Business Model. Take a moment to read it, and even better, take a moment to run through the exercises and charts with your Exco.

Then - make a stand that creates a differentiated, desirable, defensible (and profitable) positioning in the market. Stick to it. And better yet, communicate it and deliver it. Commoditisation gone.

Applying brand building to Agency Brands

I read this article (see link) on how important it is to actually tell people what you're good at in order to enhance your career. I posted this on Adtherapy's Facebook page:
"there are two poles in the ad industry - those who engage in massive self congratulation and actually believe their own PR, and those that hide their enormous talent under a bushel. Why are Ad Agencies so bad at positioning their own brand? Watch the Washington Post experiment here and start telling people what you're good at :)".

The article reveals on experiment done by the Washington Post, where a world renowned violinist played on a million dollar violin outside a subway station in Washington. No-one really noticed.

On to something that puzzles me: the lack of ability of ad/communication agencies to brand themselves. They all know what a brand is, and how to bring it to life for their clients. Why choose these ridiculous names, for starters? Twelve founders surnames linked together, some of them dead?

But more than that - I posed this question to some of the top marketers in SA, and to Tony Koenderman of FinWeek:
"if I asked you to give me one positioning sentence for each of the well known agencies, could you do it? You know, like 'Levy's = jeans'; 'Virgin is the Champion of the Underdog'; 'Allan Grey is patience'?".

They (and I) could clearly position about 5 agencies. And we know the industry WELL.

AdCracker says positioning is "that one thing; that one descriptive sentence or slogan or image the brand is known for". It is of course your brand's "unique value proposition" in strat-lingo.

Agencies know this. They do it all day for their clients. But only 5 with a clearly defined brand?

So, if a marketer is in the market and wants to appoint a new agency, how do they know who to talk to? Do they have to rely on a pitch consultant? Do we need someone to help us buy other brands?

Agencies need to brief this job in and take it seriously. I know that the hardest job always is the "in-house ad", because the brief is often vague, because the thinking hasn't been done. The Agencies who have defined their "raison d'etre" (including their personality, their unique (hate that word but it's there on purpose, because there's so litte uniqueness in Agency branding) value proposition, how they differ from the next best agency) benefit from it in more ways than one.

Apart from getting noticed, the most important benefit is that they get like-minded clients, so the relationship has a good chance of being a successful partnerhsip. How can a Client choose a like-minded, culturally suited Agency if the Agency hasn't figured out what they stand for yet?