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Why every single digital agency in the world is a failure

Digital media allow you to do the most astounding things.  Engagament, measurability, personalisation, virality, blah-de-blah-de-blah. And many digital agencies all over the world have done wonderful things in all these areas.

But there is one glorious property of the digital age which no brand has ever exploited. Which suggests there is something wrong with the way digital agencies approach problems - or perhaps the way they are used. Or paid. Or something.

My colleague Candace Kuss at OgilvyInteractive recently Twittered the question "Why didn't a mobile brand invent Twitter? And why didn't Kodak invent flickr?" Funnily enough Russell Davies had made exactly the same point a few weeks before.

The marvellous digital property of which I speak is this: it is possible online to create something of enduring and self-sustaining value which attracts and maintains an audience without requiring that media money be constantly shovelled in its direction.

Sales promotion people use the phrase "self liquidating" of any promotion which financially washes its own face (because the £3.95 cost of the cuddly Charmin bear, say, covers all the client's costs). The internet makes possible something you might call self-liquidating brand building. The maintenance of brand saliency under its own momentum. (Google, eBay, etc, do rather a good job of this, being among the world's most valuable brands while spending minimal sums on bought media.)

And it's here that our record has been less impressive. I would love to be corrected here, but I cannot think of a single case where a brand has created something of lasting value online (I obviously exclude the more obvious transactional mechanisms here - online check-in, Tesco.com, etc) which had more than a flash-in-the-pan entertainment value.

Not a single Facebook application has been created by a brand - at least not yet.... and as far as I know no major brand has created a widget or a gadget. The greatest ever mobile application  was never supported by a brand - and seems to have disappeared - while millions have been spent by those same brands creating silly handset games or whatever.

So what's with the ephemerality thing? Is it that we focus too much on attracting audiences through entertainment and too little through creating utility? Are we still trapped by a campaign mentality "and, for my next trick, this brand will....".  Or is there some other problem?

Any suggestions welcome.....

All Comments

  May 31, 2007

Well, Kodak didn't invent flickr because it could not concieve of a world where people would not want to to print their photos. It didn't realise that people would want to do that plus so much more - writing on them, sharing them instantly, having their creativity and photographic ability rewarded by status in the community... flickr was originally intended to be a gaming site, and it shows - community above all else is the driver. Wider than that, brands are rarely good at creating communities - or at least communities that they are happy to leave alone to get on with developing in their own happy way, and if brand consistency suffers on the way, so be it. The other issue is, I think, one of mindset. Things like flickr, facebook were deisgned and built as means to solve problems, rather than campaigns. Brands and agencies could do something similar, but it means having to think more like product development agencies.

  May 31, 2007

Rory, there are loads of examples. Off the top of my head: Nike+ (you know, the site that won black pencil at the D&ADs). And even in the Facebook context, there's Red Bull Roshambull you really must read my blog more....

  June 1, 2007

I think these two are good examples. But as a proportion of the billions spent each year on online advertising, the amount spent creating enduring value is still far too small. I also think too much effort is spent trying to earn attention through entertainment rather than utility, simply because entertainment is the dominant mode (usually for good reason) in traditional advertising. Yet entertainment in excess supply online - what secures repeated attention is more often utility or purpose. And I do read your blog!

  June 1, 2007

We did a photo upload site for SonyEricsson in December 2003 for the first decent camera phone- the T610. This was 4 months before Flickr launched. At the time we said - you should open this up to everyone - you could own onlie photo storage. The problem is of course that this required levels of investment, time, commitment that no marketing client (let alone a digital marketing client) had or indeed has now. We need a radical shift in the way clients and their businesses operate if we are to push some of these bigger digital ideas forward otherwise they simply become another post-it on the wall of 'we could have done that'. It's not through lack of trying I assure you!

  June 1, 2007

Quote "I cannot think of a single case where a brand has created something of lasting value online" emm....itunes?!! Apple Mac?! It may not have profiles and the typical traits of community sites like facebook or myspace but it is, in essence, the coolest of the cool online music community. It doesn't need its community members to chat to each other and pat each other on the back - I constantly see people listening to their ipods in the gym, on trains, on the street and there is this silent nod - an acknowledgement between this super cool community - almost like telepathy. I tunes is the best brand promotion for Mac on the planet. And for the record - Yes I have a Mac - but no, I don't have an ipod - I'm a Sony girl at heart but I have observed this behaviour and it is as bonding as brand loyalty can be.

  June 1, 2007

Quote "I cannot think of a single case where a brand has created something of lasting value online" emm....itunes?!! Apple Mac?! It may not have profiles and the typical traits of community sites like facebook or myspace but it is, in essence, the coolest of the cool online music community. It doesn't need its community members to chat to each other and pat each other on the back - I constantly see people listening to their ipods in the gym, on trains, on the street and there is this silent nod - an acknowledgement between this super cool community - almost like telepathy. I tunes is the best brand promotion for Mac on the planet. And for the record - Yes I have a Mac - but no, I don't have an ipod - I'm a Sony girl at heart but I have observed this behaviour and it is as bonding as brand loyalty can be.

  June 1, 2007

Rory - to be fair - there aren't loads of examples - Overnight, I've been unable to think of anything other than the 2 I mention above. And certainly none for the UK. James makes a good point tho - how do limited marketing budgets compete against millions in VC funding?

  June 1, 2007

An interesting piece by Peter Merholz at Core 77 puts into perspective the focus that brands like Flickr have on the experience they give their users, part of the reason for their utility. http://www.core77.com/reactor/06.07_merholz.asp

  June 1, 2007

Obviously it depends on what you are trying to sell, for some products like Kodak and mobile phones the internet is the perfect medium to create utility as it a medium for sharing and connecting. But if you are selling a car then it is a different proposition, the utility is how good the actual car is, the advertising is getting people in it to realise this. (which still can be interesting and not have a utility aspect to it other than entertainment) The danger for me comes when we see one brand do something and we all want to follow, like when Nike + came out you could see all the creatives thinking we need to do something like that! The answer is no you need to do the right thing for your product. If its selling flash floor cleaner it may not be appropriate to design the next Last.fm if you are sony flogging walkmans it probably is. Creatives, (i am not absolving myself here) spend to long chasing the latest trends. Utility isn't a trend it is one element of solid creative strategic thinking, but it being described like a trend and will create some meaningless work because of it.

  June 1, 2007

Whilst they are competitors of ours, (I canot believe I am writing this), Anomoly NYC part own IP in many projects and a large % of those (as would be expected) are on-line. When large agencies are freed from the contraints that they have upon them to develop genuinely marketing neutral ideas to grow business (i.e. never!) orsmaller independent agencies can get paid for developing these ideas (soon!) this will happen even more. Anyhow, take of the lens of "adland' please, this is happening all over the wider industry (Innovatio agencies) but of course 'ad agencies' or 'digtial' agencies are not doing it becasue the revenue from implementing search and abnners and 'keep it ticking over' approach of big groups domaintes. There are plenty of examples (see above). Have a good weekend all. What we need is a genuinely marketing neutral approach (free of bias or output) to clients business and the flexibility to execute only what will grow the business, thereby ncreasing efficiency and quality. Watch this space!

  June 2, 2007

I think it's first a client's problem. Digital agencies mainly deal with marketing or communication manager not with product manager or CEO. Then, it's a problem of culture, generaly our clients are conservatives, they are not taking risks and agencies prefer advice the client in a way they'd like to hear it. Somehow I think it will never change if the culture and the way agencies are paid stay the same

  June 3, 2007

Agree Vincent.

  June 7, 2007

Exactly. It's not about advertising. Apple have done it with iTunes though. And Orange (and M1 in Singapore) have a neat pay per view mobile home-video service. But that's about it. To paraphrase Howard Gossage, "People don't click on ads they click on what they're interested in."

  June 7, 2007

It's because these are products not messages. iTunes is not a marketing campaign - it's a music shop, SeeMeTV is not a marketing campaign it's a site about interesting videos, and Nike+ is - at best - a marginal case. They're products people like so much they talk about them, and products with a viral mechanic built in. Oh, and becuase ad agencies are too busy fannying around in Flash, of course :-)

  June 10, 2007

I think you made the point Tom. "It's because these are products not messages." Do you think digital products can be built by digital agencies? If yes who are they? Today my feeling is that most of great digital products are built either by the client itself or management consulting firm (accenture, sapient...) Which digital agencies, for you, are the most focus on building digital products not messages? Vincent http://www.thomevincent.com/blog

  June 11, 2007

Apropos the last two comments - exactly. I feel you should be aiming the gun at clients, who have lost the nerve to innovate in product, who are happy with me-too products with no differentation excepting brand/emotional layering, who prefer to watch and then buy innovators at a huge premium. Where are the innovation labs, the skunkworks, the crazy inventors at companies? The people who understand the impact of digital? Where are the risk takers at CEO lor board evel who bet on more than 3% compound growth to their shareholders? Where are the remuneration schemes that keep innovators/inventors at clients? Digital Agencies are only as good as the briefs they are given. We can't expect them to make utopia if they are only given sand and a spade by "clients".

  June 13, 2007

In my experience, agency folk do have the talent and regularly come up with some brilliant big ideas but they often go nowhere for all the reasons people have suggested. Perhaps one of the agency groups like WPP should introduce a VC fund which could be used to incubate these orphan ideas (the scary ones the client won't buy 'cause they want a campaign). Or if this was a step to far - an annual competition for agencies to submit their 'big non communication ideas' with the winner being championed by WPP and sold in to the big brands at the highest level. Or assist in a new start-up? I've come across some brilliant ex-agency people who left to start their own businesses - giving a home for this talent may help keep these people and you never know, it might even help change clients' perception of what agencies can do for them...

  June 18, 2007

NO! the groups will kill them with a lens of execution, group P&L and their own brand of 'culture'!

  July 11, 2008

what is advertising? If the building block of value creation is solving a problem - then utility taken to its extreme can become can make things confusing. good examples in blogospehere -  really good microsoft tech blogs (believe it or not ;) ). is that an advert? i can't tell anymore.

  November 18, 2008

Many clients are too scared to fully immerse themselves in the digital landscape, this is slowly starting to change. Whilst this is happening then there will be some clients who will stand out amongst the others as brilliant case studies - being the risk takers and being the innovators. I think the traditional type clients need to get excited rather than scared.

  December 3, 2008

The right answer is: let's give ourselves time.

There are a few examples already, but we have to wait until we get clients to buy into the idea of long-term engagement, rather than spikes allowed for by campaign.

I think all good digital agencies are currently working on some of these digital products (I know we are), we just need a little patience.

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