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Tuesday 24 February 2009

Twitter (and Social Media) Are Redefining Agencies

There's a lot of buzz about Twitter at the moment. The Twitter discussion has also intersected with the ongoing focus on the changing role of advertising and media agencies. So are agencies really getting it? This great article from Phil Johnson at Advertising Age really focuses in on how the rapidly changing digital media landscape is fundamentally changing agencies.

Will Twitter Disrupt Your Business ... or Enhance It?
How Social Media Tools Can Complement What You Do
Posted by Phil Johnson on 02.23.09,

There's a great business book called The Innovator's Dilemma, by Clayton Christensen. The basic idea is that every once in a while a technology comes along that disrupts the established order. It's cheaper and better than the current technologies and will eventually topple the established market leaders. Think hard drives, computers, and semiconductors. The dilemma for established companies is that to succeed in the face of a disruptive technology, they will have to let go of the products and business models that made them successful so that they can start to develop the next generation of innovative products. They may even have to move away from their current business before customers are ready to adopt the new technology.

Today, agencies face their own disruptive technology in the form of Web 2.0 tools and social media. To pick one specific example, social networks such as Twitter can improve on a host of agency functions and often at a fraction of the cost. To be clear, Twitter won't displace all the functions of a marketing agency. Companies will continue to need brand identities, lead-generation programs and creative ideas that connect with people emotionally. Twitter, however, can serve as a marketing platform that allows companies to build brands, manage customer relationships, and share content. It's simple, it's powerful and it's inexpensive.

Does it have the potential to redefine the value and purpose of the modern marketing agency?

Here are just a few of the places where you can start to see Twitter and other social networks overturn the established order:

They make it easier and faster to monitor what customers think about your product and company. Tip: Use the Twitter search feature to see what people think about a client's brand.

Twitter gives you the ability to move beyond targeted messages to real conversations. One-to-one marketing celebrated the ability to tailor a message or an offer to an individual. Twitter lets you actually interact with people.

Through social networks, brand identity has broken free of the agency-driven campaign. Companies such as Zappos and Amazon have built their brands through the principles of community with very limited advertising.

We're well beyond arguing whether these changes are real. You can see the evidence stack up every day in The New York Times and BusinessWeek. Fox News profiled Ford's head of social media, Scott Monty. There's not enough time in the day to read about the new-business applications for Twitter on Twitter and related blogs. If you're going to try, Pistachio is a great place to start, as is Web Strategy by Jeremiah.

The big question is how should agencies respond to Twitter as a disruptive technology? Do you give up short-term revenue from traditional marketing services that may be obsolete in several years, so that you can reinvent your business model? Do you hang on to your current business model as long as possible and run the risk of falling behind?

I bet that most of us believe that we can create a hybrid model where we continue to practice traditional marketing and introduce select social-media components to our programs. Personally, I don't think that goes far enough. While we're taking half steps, new breeds of social-media agencies such as The Advance Guard are springing up to capitalize on disruptive technologies. My bet is that advertising agencies, even those with strong digital capabilities, will have to find a way to put social media at the core of their business model, because in time it will displace many of the marketing tools we use today.

The bright light for agencies is that they can use this time of transition to make their organizations a proof-of-concept for social networks. They should be able to demonstrate how they have developed their own brand on Twitter and other prominent platforms like Flickr, YouTube and SlideShare. That they have created multiple touch-points for sharing content. That they have built a network that connects all their important audiences. And that they are accessible and open to honest conversation with all the people who want to engage.

When this happens, one side benefit is that agencies will be more transparent to each other. Already I'm engaged in conversations with competitors on Twitter that I might not otherwise have had. Much of the content that we want to share with our clients and prospects is also accessible to our competition. I can tell you that the sky has not fallen. If anything, it has made us work a little harder to keep company with some of the great agencies that we admire.

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