August 2016

The story goes that a man had a serious brain tumor. His life was in danger. He roamed the land looking for the best brain surgeon to cure him. After a lengthy search, he found just the kind of specialist he had been seeking. The surgeon was highly respected. He had a great reputation. And, he had good news. He told the man that the solution was a simple cut. He had done it successfully many times before. The man was delighted.

Then he asked the surgeon what his fee would be. Without blinking an eye, the surgeon replied $100,000. Taken aback, the man questioned how such a simple cut could cost so much. The surgeon replied that cut itself only cost $10,000. However, knowing where to make that cut would cost $90,000.

…and how does this relate to advertising and marketing you may ask?

Well, each week we read about advertisers who have made price a principal factor in the selection of its advertising agency. Sometimes the client’s purchasing department is involved. Sometimes not. Sometimes search consultants are involved. Sometimes not. But the underlying issue is the same. Reduce the costs of agency service. And, find the lowest bidder.

Clearly, value should be a critical factor. But do clients in fact buy “brain surgery” on the cheap?

When you really think about it, advertising is all about the consumer’s brain. Marketers want consumers to behave in ways that are beneficial to them. Those behaviors are driven by perceptions; perceptions that reside in the consumer’s brain. The purpose of advertising, and other forms of market communications, is to change (or maintain) those mental perceptions about the client’s brand. No matter what you call it, advertising’s job is to work on the consumer’s brain. And, to do so in a way that enhances the life of the consumer, while providing economic benefit to the marketer.

Messages that modify the consumer’s mental perceptions skillfully can alter behaviors in ways that are stunningly successful for the marketer. Doing so poorly can have equally disastrous results. When you look at advertising this way, it has a surprising amount in common with medical brain surgery.

So one must ask what business advertising agencies in.

When thoughtful agency leaders are asked this question, the answer is usually something like this, “We are in the idea business. We create and communicate ideas that change consumer perceptions and behaviors in ways that enhance their lives and benefit our clients.”

That’s a good and true answer.

Advertising Agencies have been creating ideas that change consumer perceptions and behaviors since the beginning of the agency business. All the great agencies were built on this premise. All the industry giants were driven by this. This is why intelligent clients hire agencies - for these powerful ideas. Ideas that move the client’s customers. Ideas that ring the client’s cash registers. Ideas that the clients are not able to create for themselves.

Ideas are at the core of what agencies are all about.

Unfortunately, not enough agency people answer the question this way. Frequently they will say, “We create and place ads and TV commercials for our clients.” That may be an accurate answer, but it is not a good one. It is far too limiting. It misses the grand purpose of advertising and its societal and economic benefits. It addresses the stuff that agencies do. The things they make. But, it does not recognize the marketplace outcomes that clients expect. And, worst of all, it plays right into the price shopper’s hands - because stuff like ads and TV spots are easy to put a price tag on. The cost of creating stuff can be easily calculated. How many hours? By whom? What are the production techniques? What are industry standards? What are the trends?

Pricing stuff is all very nice and tidy. And, there is always someone willing to make stuff for a little bit less.

While ideas that successfully deliver market outcomes have quite a different value proposition. Their economic value rests in the business benefit they drive to the marketer. What it costs to create the idea is immaterial. And, the value to the marketer is not immediate. It accrues over time. Thus, ideas are much more difficult to price.

This has led the price shopping marketer to a false and terribly dangerous assumption that the value of ideas is directly related to the hours it takes to create them. That an idea is a commodity. This is a patently stupid notion.

Ideas have their own lives. They don’t happen on the timeclock. Everyone knows that great ideas sometimes come quickly - even instantly. Other ideas can take a more difficult course. They can take countless hours of excruciatingly hard work, stress and frustration to reach the same kind of outcome. Ideas come how they want to come, when they want to come.

Having said that, great ideas are more likely to come, and usually do so more quickly, to highly skilled talent organized in a manner that inspires and celebrates innovation. This spirit of freedom to create is the secret of great agencies. The fundamental truth is that the value of an idea is in the outcomes it delivers. Not in how many hours it took to create it.

The basic truth is that intelligent marketers hire agencies for ideas that will change consumer behavior. It’s as simple as that. Sure marketers need stuff. They need ads. They need commercials. They need websites. They need brochures. All kinds of other stuff. But the smart ones know that anybody can make stuff. They also know that only the exceptional can generate ideas that move their consumers. And, that is what they really need.

What do you think? We’d love some feedback.

Joe Bouch
CEO, 78Madison

78Madison is an Orlando based full-service marketing communications firm. If you are in the area, we’d love for you to visit our advertising agency offices in Altamonte Springs, Florida.