To understand the need for change, let’s review the history of the advertising industry.
The business was started in the 1800’s when the publisher of a farm journal realized tractor manufacturers, seed companies, and the like couldn’t get reach all the farmers themselves but they could reach them by placing ads in his publication. So, he spread the word, became an “agent”, and the first “agency” was born.
For the next hundred years the business didn’t change much. Agencies represented newspapers which were not too much different from farm journals. In the 1920s agencies started representing radio stations. The technology might have seen change — aural instead of visual — but the concept was the same.
In the 1950s, agencies added television. Now they were selling a medium that consumers saw and heard, but it was still the same concept. And, of course, billboards, magazines, and direct mail were added. But the business did not change substantially until the 1990s when — BOOM!! — the Internet became important. What the Internet did — and what nobody realized in the early 1990s — was that it democratized media. Thanks to Internet access almost everybody had the opportunity to reach consumers. And online vehicles (like this blog for example) could reach huge groups of people without ever paying a penny to a magazine, newspaper or TV station.
Of course, the reason for marketing hasn’t needed to change despite all the new technologies. If you don’t actively sell things, people aren’t going to buy them. Because if you already run your business well and constantly improve everything you can improve, then one of the few places to build real value in your company is to build your brand. Done properly, branding can become the least expensive way to generate more revenue and make your business more valuable.
So why haven’t most advertising agencies figured out this change? Because they still have the words advertising and agency in their name.
Advertising agencies continue to run their businesses the same way their predecessors did more than one hundred years ago.
It’s like the newspaper business. The problem with the newspaper business is they have the word paper in their name. And so most newspapers thought they had to print their information on paper. And they’ve paid the price in diminished circulation in the wake of emerging TV and Internet news sources.
But if newspapers realized that what people want to buy is news, not paper, they would change their business model to brand and sell what they do so well and what people want to buy.
But companies — like people — don’t like to change. And worse, they don’t like to be told to change. Do you? What is it you’re not doing — or not changing — even though you see the writing on the wall?
I know this isn’t the first time you’ve thought of this, but maybe it’s the kick in the pants you need to finally change. Here’s how.