Culture Shock on Madison Avenue

    April 19, 2007

Last week’s announcement that the Interpublic Group acquired Reprise Media set off a round of self-congratulatory praise up and down Madison Avenue.  It was as though they stopped hitting the snooze button and finally addressed the importance of search in any advertising campaign.  But take a close look beyond the buzzwords like “integration” and “broad marcom mix,” because the acquisitions and partnerships merely put a pretty face on some of the deep, troubling issues at play.

There is a long-standing, creative tradition on Madison Avenue whose roots run deep.  These are agencies that have thrived on the big idea.  They brought us the famous “1984” ad for Apple and the Aflac duck.   

Although there is room for creativity in search and other online advertising, it’s pretty much standing room only.  There are no big ideas, there is no Aflac duck or “1984” ad among the 100 characters in your text ad on Google, Yahoo, or MSN.  The creativity in search and online advertising is limited, and based on results, not ideas. 

This clash of cultures will inevitably drive a fissure between the creative teams and the search teams on the new, “online-friendly” Madison Avenue.  Indeed, this conflict is highlighted in a recent article by MediaPost, which quotes several insiders from large agencies decrying the disdain with which the creative side views search.  In a perfect world, the creative tradition on Madison Avenue would give way and form a new tradition driven by a synergistic view between creativity and statistical analysis.   

However, in the real world, don’t expect the creative teams to allow their tradition to be uprooted overnight.  The far more likely outcome will be a tug of war between the search folks and the creative folks.  The executives will tell them to play nice, and they’ll promptly go about the business of competing for internal resources and trying to one-up each other.  It’s pretty clear who’s going to win that competition, at least for now.  The creative folks are responsible for the lion’s share of the agency’s revenue and image, so expect to see search and online media marginalized in the “broad marcom mix.” 

Compare this scenario to an independent, search-driven advertising agency.  Such a company should have a tradition of using creative to drive traffic, and using results to inform creative.  For example, a smart search firm will buy keywords and ramp up online marketing efforts around TV, print, and outdoor efforts.  They will test and implement copy and landing pages that drive the most clicks and conversions. 

If the holding companies acquire technologies, but can’t get over their culture shock, we may see a shift in the entire ad agency marketplace.  Massive holding companies, billed as one stop marketing solutions, will give way to a series of smaller, nimbler, more dynamic firms.  The simple fact is that the world of marketing is changing at an incredible rate, to the point where clients need to almost constantly review and tweak their strategy.  The holding companies haven’t demonstrated the ability to adapt very quickly.  Instead, they tend to diminish the importance of new marketing platforms, then acquire the capability later.

The problem with this approach is, by the time the holding companies finally acquire these new marketing platforms, the early adopters already have the advantage.  We may very well be headed for a marketing world where CMOs are jacks of all trades who constantly rethink strategies.  They will outsource the different pieces of their marketing mix to a variety of small, nimble players, or hire internal experts.  The CMOs themselves will be responsible for the integration aspect of their marketing, and the holding company model will simply disappear.