12037: Anti-Social Sentiments.

“Traditional advertising is dying,” proclaimed pathetic pap published at Digiday. The bearer of bad news was Inside Social CEO Brewster Stanislaw, who heralded the arrival of social. Any traditional advertising practitioners who bothered reading the column likely let out a collective “Bwahahahaha!” Now, most professionals don’t know Brewster Stanislaw from Punky Brewster—and Punky probably has more credibility. Plus, Inside Social wouldn’t ordinarily warrant a mention on even AgencySpy (and ironically, the deadly dull company website could benefit from some traditional advertising tactics). But given Digiday’s penchant for hating all things related to traditional advertising, Stanislaw was awarded a soapbox. Too bad Stanislaw’s perspective reads like a bad PowerPoint presentation. Hell, it was probably excerpted from the PowerPoint slides of his firm’s capabilities deck. In the end, Stanislaw’s post begs the question, “How come a social guru is clueless about engaging audiences online?”

Traditional advertising is dying (and that’s just fine)

By Brewster Stanislaw

Brewster Stanislaw is the CEO of Inside Social.

Advertising is more alive today than it’s ever been. But traditional advertising is dying a slow, painful and very public death.

And the reason is simple: Consumers want, and expect, to be heard.

Unfortunately, traditional advertising doesn’t permit a two-way relationship, because it’s based on the premise of broadcast: the one-to-many paradigm. This means that the advertiser can only make an impression or get attention — in print, radio, television, and even some forms of digital — by talking to (or at) the consumer.

The consumer can’t communicate back, and that’s why traditional advertising is dying.

Enter social. Now, consumers and advertisers can engage and share in an interesting, interactive conversation that makes bi-directionality possible. In this way, social is digital word-of-mouth at scale –- and, after all, consumers trust word-of-mouth above all other marketing media.

Brands can now rely on their loyal customers, who are effectively brand advocates, to determine the messaging that works best organically in the social space. If a tweet resonates with fans, a brand can then use its marketing dollars to facilitate this organic sharing among consumers and amplify it in order to drive sales. Audi’s #wantanr8 campaign is a good case in point here: Customers are incentivized to share the hashtag in order to win a drive.

Unobtrusive native advertising, which seamlessly follows the form and function of the user experience it’s placed in, is far more effective than traditional advertising in facilitating this interaction, because consumers hate being marketed to, and because they want advertising that blends with the content and experiences they’re consuming.

And, when it appears in a social context, native advertising is especially powerful, giving brands the best chance for sincere two-way consumer communication, which is critical for sales conversion today.

Social is particularly effective for two reasons. First, brands can leverage existing organic content to create sponsored native ads. And, second, they can create and distribute content that mimics what has worked organically.

There’s a set of challenges here, though.

First and foremost, brands need to start thinking like consumers and understanding how their customers are sharing and consuming content.

Traditional advertising creation requires talented marketers, artists, designers and copywriters sitting in offices and using their intelligence and skill to anticipate what will resonate with the target customer group. But now with social, advertisers can leverage existing and ongoing conversations among their audience, find what’s effective, and repackage the work so it’s fully branded. Regardless, though, the creative process starts with the customer, rather than ending with it.

The key here, however, is that brands must see themselves as publishers in order to succeed with this strategy. And, if brands think of themselves as publishers instead of advertisers, they must start to create content optimized for conversation -– not content optimized for broadcast.

GE gets it, as evidenced by its content portal, with on-brand stories about investing in Africa and closing the STEM gender gap. Coca-Cola’s homepage also looks like an editorial hub, with stories about “underrated” college football towns and a tour of old drive-through movie theaters.

Because consumer word-of-mouth is the most powerful way to drive sales, and social is the embodiment of this process, brands should focus on facilitating the creation of these vital conversations. This is exactly what Sephora is doing with its active community boards. But to be really successful, brands must also fully understand the potential of amplification — identifying the organic content that is proving effective and increasing its distribution.

One way to do this is by finding all user-generated content and pushing it via social channels (both owned and paid), as well as showcasing it on other digital properties. In other words, driving word-of-mouth in a branded, packaged and holistic way so that it has the reach a brand needs.

The best part of this is that advertising will actually benefit the consumer –- which is unprecedented in the history of marketing –- because suddenly the marketing isn’t marketing at all; it’s engagement with desired, organic content.

That clearly spells the death of traditional advertising.

10797: Adman Versus Geek Is Tired.

High Wide & Handsome Co-founder and CCO Mike Wolfsohn provided a general counterpoint to the advertising agency cluelessness routinely displayed by Brian Morrissey at Digiday. The piece is actually much longer than it needed to be. “Morrissey is an ignorant douche bag” would have sufficed. To be clear, most advertising agencies—especially BDAs—could definitely benefit from renovations. On the flip side, the average digital shop is no less in need of overhauling. Of course, Digiday’s core audience probably did not agree with and/or even comprehend Wolfsohn’s perspective. It was like a Tea Party zealot making the keynote address at the Democratic National Convention or President Barack Obama appearing before a Tea Party rally. The first comment—as overwritten as Wolfsohn’s editorial—featured the standard “fundamental-shift-in-consumer-behaviors” angle. Each side of the traditional advertising versus digital conflict insists on hammering the other guy’s wrongness while promoting its own rightness. Is it impossible to show mutual appreciation for the basic beauties of both art forms? Instead, like the political battles between conservatives and liberals that have led to unyielding and non-collaborative partisanship, the spectacle continues in increasingly annoying fashion. And Brian Morrissey is starting to bear an uncanny resemblance to Clint Eastwood.

10388: Digital Dimes Versus Advertising Dollars.

Advertising Age reported on a 4A’s study showing digital agency executives make far less money than traditional advertising creatives. Wow, did someone pay to conduct the study? It’s a safe bet that the researchers received more loot than digital agency executives. Digital has positioned itself as a below-the-line discipline, adopting the direct marketing business model. That is, the work gets done fast and cheap. And if stuff can’t be done in-house, it gets outsourced to even cheaper vendors—sometimes to vendors in developing countries. So no one should be the least bit surprised by the research results. Plus, any digital executives depressed to learn of the study can take solace in knowing they are still paid more than minorities in the field.

Survey Finds Digital Agency Execs Paid Less Than Creatives

Digital May Be Advertising’s Future, but Traditional Creatives Bill Nearly Double as Much

By Rupal Parekh

A senior digital executive at a New York-based shop bills clients an average of around $350 an hour. Senior creatives on the traditional side of Madison Avenue can bill nearly twice as much.

In other words, for all the fretting over a digital talent gap in adland, many digital and social-media positions, mobile developers or technologists earn far less than their old-school counterparts.

That’s a key takeaway from a 109-page report published by 4A’s last week that reflects 2011 hourly rates billed by agencies. The survey—which updates information contained in the first labor-billing study it conducted three years ago—collected data positions including account management, creative, analytics, digital, media services and talent management. It then spliced and diced the data by agency size and geography.

When this study was initially published back in 2009, it sparked a furor in the industry, with many agency executives saying that the published benchmarks were the equivalent of a “suggested retail price” established by the agencies, and asked that published rates not be confused with rates actually paid by clients. Many, fearing a backlash from clients who were already slashing fees during the recession, also pointed out at the time that the hourly billing rate data was “fully-loaded,” including overhead and other costs rather than reflecting what employees were paid.

Roth Associates founder Dick Roth, who says about 40% of his business now is focused on compensation consulting for marketers and agencies, thinks that while the 4A’s labor-billing survey is helpful insight for clients looking to get a sense of agencies’ expectations, the data should be taken with a grain of salt. “It’s what the agencies would like to charge and it doesn’t represent marketplace pricing, which is what people should benchmark themselves against.”

The 4A’s maintains that while there’s been a wealth of efforts to move agency compensation toward newer models such as value-based arrangements, fees for service based on agency labor are still the predominant payment method. The trade group says that many of their members feel that sharing the hourly billing rates can help with compensation discussions by establishing benchmarks. Indeed, more shops volunteered to participate this time around.

This survey represents hourly rates billed by 251 agencies, vs. 230 in 2009. The agencies that participated include global agency networks, such as Ogilvy, BBDO, Grey, JWT, Y&R, McCann and Leo Burnett as well as shops such as 72andSunny, CP&B, BBH, Mullen and the Martin Agency. There was also a smattering of big digital shops, media agencies and PR shops in the mix, including: SapientNitro, 360i, VML, Carat, Initiative, Mediacom, Maxus Cohn & Wolfe, Hill & Knowlton.

In the 2012 survey, data were gathered for several new titles linked to digital advertising or content, including director-content management, creative technologist, mobile web developer, rich media developer, digital-analytics manager or blogger. At their highest, each of those roles command hourly rates shy of traditional creatives, such as $355 for a head of content to less than $200 an hour for a mobile-web developer.

While the disparity between New York-based creatives and those in the parts of the country is still huge—Madison Ave. pays the most—the hourly billing figure has fallen to $637 an hour in 2011 from $751 an hour in 2008. Meanwhile, the average amount chief creatives in other parts of the country bill is on the rise. In the East or in the South it went up to $361 an hour in 2011 from $319 an hour in 2008; up to $487 in the West in 2011 vs. $461 in 2008 and just above flat in the central part of the country, to $422 an hour average compared to $420 in 2008.

Account managers’ hourly billing rates are seeing slight upticks, too, and senior account execs can also command more than many digital roles. A director of account services in New York bills an average of $461 an hour compared with $453 in 2008.

Adland’s tendency to charge more for senior traditional creative talent than digital talent isn’t isolated to the agency world. Jerry Bernhart, a recruiter in digital and direct marketing who runs his own firm in Minnesota, said he’s also seeing it on the marketing side.

Another factor in digital talent commanding less is their ability to be associated with well-known work. “It’s about identifiable product. A senior traditional creative person can say, “I did the Apple commercials’ or “Where’s the Beef?’” Mr. Roth said. “It’s like being an Academy Award movie winner; it’s more recognizable.”

“Try to think of the person who handled a digital campaign—and you’d be a bit more hard-pressed,” said Mr. Bernhart. “Eventually there will be superstars and real home-run hitters who distinguish themselves. … Recruiters and a lot of folks at agencies know talented digital people, but [clients might not] because they haven’t become marquee names. But it’ll be cool when that happens, because we’ll know the industry has evolved.”

5339: New Views From The Kids’ Table.

The column above was published in the latest issue of Advertising Age, as well as the Small Agency Diary at AdAge.com.

Nancy Kramer, founder and CEO of Resource Interactive in Columbus, Ohio, makes the standard pitch for “below-the-line” enterprises to receive professional respect from the traditional advertising agencies and clients too. Kramer’s frustrations are shared by anyone who has ever had to bow behind the majority rulers—a familiar spot for minority shops. Yet it’s unlikely her viewpoint will inspire change. In addition to the traditional ad agencies’ iron grip on budgetary and political control, the clients still diss the smaller partners. As Kramer reveals, even the digital shops rate second-class citizenship, despite the exploding importance of interactive marketing.

However, this essay will not rehash the same gripes. Rather, the goal is to present a few observations on the state of the union. Or the disunion.

There was a time when the traditional ad agencies were in command. Or at least they created the illusion of wielding the main power. But through the years, things have dramatically altered.

The “below-the-line” shops continued to develop in their respective areas of expertise. Additionally, because most of these shops were already staffed with multitasking workers wearing multiple hats, the troops were better equipped to respond to the industry’s total downsizing.

It’s been quite different with the traditional ad agencies. The bloated, old school inhabitants kept farming out the heavy lifting to vendors or in-house studio grunts. Hell, the art directors rarely mounted their own layouts onto foamcore. The big agency employees failed to speed up in the accelerated arena. Plus, they appear to be moving backwards in regards to awareness of popular culture and technological advancements.

Now “below-the-line” partners are witnessing a new sight from the kids’ table. It’s like watching an elderly, drunken uncle show up for the family gathering. The traditionalists stumble, stammer and unveil concepts that are hackneyed garbage—often barfing all over everyone in attendance. It’s embarrassing to be a spectator. These guys aren’t ignoring the smaller partners for sinister reasons. They simply don’t have their shit together. Period.

Back in the day, the traditional ad agencies’ arrogance was a pain in the ass to accept. But assuming a totem pole position under today’s Otis Campbell and Foster Brooks is downright insulting.