The reading level for this article is All Levels

Give ‘em the Finger

(aka "Why advertising is becoming obsolete")

By: Hadji Williams

 

What’s wrong with marketing? Hold up your hand, either one&ldots; Go ‘head, hold up your hand—I’ll wait&ldots; Now think of your hand as the marketplace. Look at your fingers—they’re products in the marketplace. Now answer these questions: Which finger do you use to point? Which finger do you use to flip someone off? Without thinking I bet you said the index finger and the middle finger, respectively. Why? Because those are the tasks we’ve all been conditioned to identify those fingers with. Whether we like those fingers or not is secondary. What matters most is that those fingers have a place, an identity—a brand. And that, my friends, is marketing.

Executionally speaking, marketing is baseball—even all-stars only hit around .330. For every successful catchphrase-inducing, sales-spiking marketing campaign, there’s 20 that fail, plus another 5 or 6 more that not only fail but get someone fired. For every successful product or brand, hundreds more fall off. Why? Because consumers are just people and sometimes people are straight up flaky. Consequently, great marketing is like great hitting or great comedy—it’s mostly timing; the rest is art, educated guesses, and who’s guesses and art you’re willing to ride with. And anyone who claims otherwise is just hustling you.

Basically, ad agencies and marketing firms are glorified salesmen and middlemen—they make theirs off of markups and commissions. If you check ADWEEK, Advertising Age, BRANDWEEK, etc. accounts are listed by "billings" or how much clients spend on media each year. When an agency takes on a client, they usually handle creative, media placement, consumer research, etc. For doing so, they mark everything up, especially the media placement—usually by about 17.5 percent, give or take. Why 17.5? I dunno. Maybe it’s the most agencies think they can get away with before anyone asks questions. Besides, it’s been that way since the early 1900s when Mr. J. Walter Thompson sold ad space in newspapers and designed the ads for clients as a freebie.

Now say Client X wants Agency Y develop a TV spot. Well, once Client X settles on one of Agency Y’s TV ideas, the agency bids everything out—hires the director/production company, does casting, media, etc. Along the way Client X is getting invoices: A seventeen percent (or more) mark-up here, a seventeen percent (or more) stick there&ldots; Before you know it, a $100,000 spot (which was probably only $90K) tops out at $120K; $140K if the client ain’t careful. And because there’s so many people marking stuff up along the way, no matter who the client talks to, somebody’s lying to them about actual costs. And since clients can’t do this stuff themselves, they stay getting fleeced.

 

Now here’s the funny part:

 

The one thing agencies should actually bill for, the one thing clients can’t do themselves is creative—the ideas. The brilliant tagline. The great commercial. The iconic logo. Agencies make so much money hustling clients on markups that they basically throw the creative in for free. Creatives like myself develop brand building ideas—lexicon-changing catchphrases, pop culture changing moments, imagery that gives a faceless corporation a personality people can relate to&ldots; And for our troubles? We get an annual salary, maybe a little bit of change per day or per project as freelancers. Creatives don’t get a cut of the markups or a percentage of sales. We don’t even get to keep our work—we sign contracts making the agency/client the sole owners of the ideas we develop. Why? Because it’s a hustle; and in a hustle you’re either a hustler or you get hustled.

All clients and agencies have one thing in common: as businesses they only understand one thing: Formulas. And because every client is different, and every idea should vary by need, budget, audience, etc. there’s no formula for determining the true value of marketing ideas and creative concepts. I mean, how do you bill "Just do it"? How do you bill "Where’s the Beef?" How do you bill "Jared, the Subway guy"? In other words: How do you bill clients for tailor-made disposable intellectual property, which is all advertising and marketing really is?
I say the solution’s simple: Like athletes and actors, creatives should be free agents and negotiate contracts for their services based on their track record, portfolio and potential, then get whatever the market bares. Specifically, a creative type would get a fat fee upfront for time and energy spent on developing creative ideas plus some type of usage royalty, licensing fee and/or a cut of the client’s sales over a specified time frame. Or better yet, since building a brand is literally about adding equity to a company, creatives who produce top work should get stock options. After all, in most all cases, a company’s brand image is just as important to its success as the product/services it actually provides.

But it’ll never happen. Why? One: Because it’s a fundamental paradigm shift, and unless they’re responsible for it, change scares the snot out of most every businessperson. Most agencies are bloated and over-sized and couldn’t afford to run business that way. Two: Just like every kid thinks they can rap, every brand manager, AE, CEO, etc. thinks they can write a great tagline, a hot commercial or a cool logo. In fact, many clients have convinced themselves that the only reason they have an ad agency is because they don’t have time to do the heavy lifting of creative development and media buys internally.

But the ad game’s biggest enemy is corporate denial. Most agencies can’t accept the fact that building brands and advertising aren’t the same thing.
Sometimes the best way to reach a consumer isn’t a print ad or a commercial. Sometimes it’s a sponsorship or a product placement. Sometimes it’s an emcee name-checking your brand in a song. Maybe it’s an internet promotion or a 2-way campaign. Sometimes it’s a little bit of all these things; sometimes it’s none of ‘em. But whatever the solution, ad agencies will only admit this much: "if it ain’t advertising, we probably can’t bill for it; and if we can’t bill for it, it’s competition, a threat to our bottom line and the client doesn’t need to know about it." (After all, they’re called "advertising agencies" and not "branding agencies" for a reason.)

Still, most marketers work hard to do right by clients. But the revenue must flow, The Beast must stay fed. So at some point the artificial markups and blown budgets come. And as they come, the markups get passed on the client who then passes them onto you, the consumer. Now if everything works out and the consumer bites, then everyone’s coffee gets cream. But if it doesn’t you simply take the L while the clients, accountants, comptrollers, and CFOs duke it out with the IRS and shareholders.

Meanwhile, it’s back to the drawing board.

 

 

 

As a copywriter and brand consultant, Hadji Williams is a 15-year industry veteran. He’s also author of KNOCK THE HUSTLE: How to save Your Job and Your Life from Corporate America. (www.knockthehustle.com, coming Winter 2006.) Email him at: author@knockthehustle.com.

This Business article was written by Hadji Williams on 8/28/2006

A Chicago native, Hadji J.S. Williams is also a 15-year vet of the ad world and adward winning copywriter. He’s helped build brands for: Aleve, Cingular Wireless, Coca-Cola, Ford Motors, Mercedes Benz, Radio Shack, SBC, and the William Wrigley Co., just to name a few. He’s also the author of KNOCK THE HUSTLE: How to save your job and your life from Corporate America.